Rheumatoid Arthritis Drug Shows Promise in Fighting Covid-19

A new study shows an anti-inflammatory drug can help treat certain severe symptoms of Covid-19, and adds a tool for helping the sickest patients

By Joseph Walker of The WSJ. Excerpt:

"An anti-inflammatory drug can help reduce the risk of death in people hospitalized with Covid-19, a new clinical trial indicates, reviving hopes—and debate—about a medicine that many physicians had abandoned after earlier clinical-trial failures.

A U.K. study of more than 4,000 hospitalized patients showed that people who received the rheumatoid arthritis drug tocilizumab plus steroids had a 20% lower risk of death after 28 days compared with patients who received steroids and standard care only, according to preliminary results posted online this month.

The results haven’t been published yet in a peer-reviewed scientific journal, but U.S. scientists are paying attention to them because of the reputation of the University of Oxford researchers who conducted the study. In June, the same Oxford researchers were the first to prove that the cheap and widely available steroid dexamethasone significantly reduced Covid-19 deaths, a finding that led to the drug becoming a standard treatment for most hospitalized patients.

Researchers say Oxford’s study may have succeeded where others failed because it included a much larger number of patients, whose average age was about 63, and included only patients with high inflammation measured in lab tests and low blood-oxygen. The data could lead to the drugs becoming more widely used, especially if they are included as suggested or recommended treatments in guidelines crafted by influential organizations such as the U.S. National Institutes of Health.

On Monday, the Infectious Diseases Society of America updated its guidelines to suggest the use of tocilizumab in addition to steroids in severe or critically ill patients

“There have been a lot of studies before this one that suggested a possible benefit and others that seemed not quite as compelling,” said Francis Collins, director of the National Institutes of Health. “I think what we were waiting for was a really large scale, well-designed study—and I think we may now have that.”"

Connecticut’s Covid Vaccine Lesson

Gov. Lamont makes a smart decision to base eligibility on age

WSJ editorial.

"‘I’m going to focus on the old business motto, KISS: Keep it simple, stupid.” That’s how Connecticut Gov. Ned Lamont put it Monday in announcing his decision to base Covid-19 vaccine eligibility strictly on age. The more states prioritize social “equity,” the more complicated and inequitable vaccine distribution becomes.

After seniors older than age 65, Connecticut had planned to vaccinate “essential workers” and younger people with underlying health conditions like diabetes. The Centers for Disease Control and Prevention had recommended these groups be prioritized to “mitigate health inequities” and “promote justice.” Younger minorities are more likely to be “essential workers” and have comorbidities.

But as Mr. Lamont explained, “A lot of complications result from states that tried to finely slice the salami and it got very complicated to administer. . . The CDC said grocery and food service workers [get priority]. Then we started getting calls of, ‘I’m not in a grocery [store] but I’m in a convenience store and it’s a convenience store that serves . . . we have doughnuts, we have coffee, we have food.’ How about, ‘I’m a big box store, but I also have food; I think we should all be prioritized as well.’ . . . Those are the type of questions we had. And it was very difficult.”

Or how about people a few pounds short of the public-health definition of obesity? If they ate more doughnuts, could they qualify?

The Democratic Governor is right that complexity is the enemy of speed. It’s also the enemy of equity. Decisions about who is or isn’t an “essential worker” are arbitrary. Many people in their early 60s are retired, including large numbers of public-safety workers.

Minorities have significantly higher Covid death rates than whites, but outcomes differ far more by age than race or underlying conditions. A 58-year-old black retiree is 10 times more likely to die from the virus than a 40-year-old black worker. People of all races develop more health conditions as they age, and their immune systems weaken.

Some social-justice activists are criticizing Mr. Lamont for not caring about “equity,” but it would be unconstitutional to prioritize eligibility based simply on race. It’s fine for governments to set up more inoculation sites in low-income communities to improve vaccine access, but other schemes to make distribution equitable get political and are open to gaming.

Consider California, which created special access codes for vaccine appointments that community groups were supposed to distribute to minorities. The Los Angeles Times reports that affluent whites are widely sharing the codes, taking appointments that were supposed to be reserved for minorities. You can imagine the political uproar. Bravo to Mr. Lamont for thinking of the larger public good, and understanding that simple can be smart."

More Green Blackouts Ahead

Biden’s regulators are ignoring the electrical grid’s vulnerability

WSJ editorial. Excerpt:

"You’d think the Texas blackouts would trigger some soul-searching about the vulnerability of America’s electrical grid. Not in today’s hothouse of climate politics. The Biden Administration is already moving to stop an examination of grid vulnerability to promote unreliable renewable energy sources.

Regulators have been warning for years that the grid is becoming shakier as cheap natural gas and heavily subsidized renewables replace steady coal and nuclear baseload power. “The nation’s power grid will be stressed in ways never before experienced” due to “an unprecedented resource-mix change,” the North American Electric Reliability Corporation (NERC) warned in 2011.

It added: “Environmental regulations are shown to be the number one risk to reliability over the next one to five years.” But the Obama Federal Energy Regulatory Commission(FERC) refused to consider how climate policies would affect reliability. Since 2011 about 90 gigawatts (GW) of coal capacity have shut down, replaced by some 120 GW of wind and solar and 60 GW of gas power capacity.

But renewables don’t generate power around-the-clock as gas, nuclear and coal do. Gas plants depend on just-in-time fuel deliveries, which aren’t reliable in extreme weather. Government-made pipeline bottlenecks constrain deliveries in the Northeast. Liberals also say Texas could have better weathered the Arctic blast if its grid didn’t rely almost entirely on in-state power.

But the Southwest Power Pool, north of Texas, and the Midwest power grid—both of which rely heavily on wind backed by gas—also experienced power outages last week due to surging demand, declining wind production and gas shortages. California relies on gas and imports to back up its solar power. But last summer California couldn’t get enough power from its neighbors amid a heat wave that strained the entire Western grid. Hydropower from the Northwest and coal from Utah couldn’t stop blackouts.

The wind lobby says Texas should have required thermal (nuclear, gas, coal) plants to be weatherized to withstand single-digit temperatures. Perhaps, but wind still performed the worst during the blackout, generating power at 12% of its capacity compared to 76% for nuclear, 39% for coal, and 38% for gas, according to a data analysis by the Center of the American Experiment.

The ice-cold reality is that grid regulators across the U.S. are struggling to keep the power on during extreme weather. They have been able to avoid more blackouts by ordering energy conservation. But Texas shows that conservation isn’t enough, as government mandates make America more reliant on electric power for everything from heating to cars.

Most Texans use electricity for heating. Many pipeline gas compressors are electrified due to federal emissions rules so the blackouts limited gas deliveries to power plants. They also shut down water pumps and treatment centers.

Yet progressives want to make Americans even more dependent on the grid by banning gas hookups in homes and mandating electric cars. This is a recipe for blackouts nationwide as coal and nuclear plants retire because they can’t compete against subsidized renewables. New England’s grid operator in 2018 predicted outages in the winter of 2024-2025 in most cases it analyzed."

Regulations forbid utilities from building energy resiliency

See Texas Power Crisis Points to Wider Dangers by K.R. Sridhar.

"The Texas power crisis demonstrated the fragility of the nation’s electricity infrastructure. Outmoded policies and regulations have disabled the creation of a market for resiliency.

In most states, utilities are regulated monopolies. A Public Utility Commission sets rates based on state laws, many of which allow utilities to charge a premium for renewable electricity. That has induced utilities to install gigawatts of wind and solar capacity.

But there are no such incentives for resiliency. Not only aren’t utilities required to provide more-reliable power; they can’t offer resiliency at a higher price because rates are fixed. It is as if the National Highway Traffic Safety Administration didn’t require air bags or seat belts and forbade automakers to charge a premium if these safety features were provided.

Worse, many states penalize customers who try to implement their own resiliency solutions. In California, essential businesses are forced to pay punitive charges to the utilities if they generate nonintermittent onsite power. PUCs and utilities suggest that these charges ensure that customers pay their “fair share” to fund wildfire mitigation and energy-efficiency programs.

To build a resilient power marketplace, lawmakers and PUCs should create incentives for resiliency, as they encouraged renewable energy. They should authorize higher rates for resilient electricity, so that utilities can make long-delayed infrastructure upgrades.

Upgrading the entire grid will take more than a decade. In the meantime, microgrids can fortify critical infrastructure systems to ensure uninterrupted power. Microgrids are islands of energy resiliency. Using fuel cells, rooftop solar panels and energy storage, they provide power when the grid isn’t available. My company has deployed 89 microgrids, which have protected customers from more than 1,700 power disruptions since 2018. Customers and utilities can purchase these technologies on their own. But to do so, states and municipalities have to remove the penalties for installation and ease permit requirements.

Policy makers should also resist efforts that would further diminish the resiliency of the energy system. Cities such as Oakland and Berkeley, Calif., have banned natural-gas connections to buildings. Advocates lobby for replacing gas with electricity to reduce carbon emissions. But this would create a single point of failure. Without gas pipelines, homes would be without heating, hot water and cooking fuel when the grid fails.

Instead of banning pipelines, authorities should strengthen and upgrade them and focus on using them to distribute lower-carbon fuels. This piping infrastructure could become the backbone of our renewable hydrogen economy. With the right policies, Americans won’t have to worry about being left in the dark when the weather is bad.

Mr. Sridhar is founder, chairman and CEO of Bloom Energy."

How Many Jobs Will the ‘Stimulus’ Kill?

As many as eight million by our estimate, in part by gutting many of Clinton’s successful welfare reforms

By Casey B. Mulligan and Stephen Moore.

"President Biden’s $1.9 trillion Covid-relief package is being sold as an effort to “get America back to work.” It will do the opposite. We estimate that between five million and eight million fewer Americans will be employed over the next six months if the bill passes.

The bill would create one of the largest expansions in government welfare benefits since the birth of the modern welfare state. In combination with December’s $900 billion package, the new bill would expand the safety net to include six months of weekly $400 bonus unemployment benefits on top of the normal weekly benefits, a $3,000-a-child tax credit, an expansion of food stamps and rental assistance, $2,000-a-person checks, and expanded health benefits.The Biden plan is welfare reform in reverse. It would repeal many of the successful work requirements dating to the Clinton era, and it contains only minimal requirements in exchange for its cash payments and other benefits.

There’s more. Unlike wages and salaries earned from work, many of these benefits are tax-free. So the after-tax equivalent of receiving a paycheck versus government benefits is even more tilted against working. There is no 7.65% payroll tax deducted from an unemployment check, as there would be on a paycheck. Unemployment benefits are subject to income taxes in most of the country, but six states don’t count them as taxable income.

In Kansas, a family of four with two unemployed adults who had earned U.S. median wages could get paid, including the Biden add-on package, the after-tax equivalent of more than $135,000 on an annual basis without working an hour. In Massachusetts, where state unemployment benefits are the highest in the nation, the figure is $170,000. This doesn’t include any housing or rental assistance the family may also receive. The Biden package of benefits would exceed the wages and salaries of at least 85% of households.

We support a safety net for people who lose their jobs, but benefits this generous are unfair to those who work full-time but get paid less than those on government assistance. Even in the poorest states, such as Mississippi, a family of four with kids could collect benefits of well more than $100,000 on an annual basis.

Supplemental unemployment-insurance benefits in the range of $400 a week would offer roughly 60% of unemployed workers more money for not working than for returning to their jobs. During the last serious recession, in 2009, the supplemental benefits under the Obama stimulus were $25 a week.

We predicted on these pages that when the original Cares Act passed in early 2020, the added benefit would reduce employment by millions when jobs came back. Sure enough, Labor Department statistics verified that millions of jobs went unfilled last summer even as unemployment was historically high.

What will happen this time around? The combination of benefits are likely to reduce employment by five million to seven million jobs. The $15 minimum wage, if it stays in the bill, would bring the total to more than eight million.

Many Americans will always choose the dignity of work over government handouts. But the Biden benefit package makes going back to work a money-losing proposition. If Mr. Biden and the Democrats want to encourage employment, they should suspend payroll taxes for jobs that pay $100,000 a year or less. This would provide all workers an immediate 7.5% raise and would cut the cost to employers of hiring unemployed workers back by the same percentage. This would cost the government less than $1.9 trillion.

President Biden’s bill will make millions more Americans dependent on checks from the government, not an employer. Could that be the point?"

The Texas Public Utility Commission stopped relying on the deregulated market

See Amid Blackouts, Texas Scrapped Its Power Market and Raised Prices. It Didn’t Work: The Texas Public Utility Commission hoped its move would spur generation. Retail providers say all it did was generate billions in added bills. by Russell Gold and Katherine Blunt of The WSJ. Excerpt:

"Hours into widespread blackouts in Texas last week, the state’s power regulator took an unusual step: It stopped relying on the deregulated market to set electricity prices and did so itself.

The Texas Public Utility Commission said it raised prices to a market cap of $9,000 per megawatt hour during a six-minute emergency meeting Feb. 15, up from recent prices as low as $1,200 a megawatt hour, because the computer that was supposed to help match supply and demand on the power grid wasn’t working properly, and it needed to intervene to relieve a growing crisis.

But the higher prices didn’t result in additional power production, because many generators were dealing with frozen equipment or fuel shortages, and were unable to deliver more megawatts, no matter the price. Some electric-market participants now say the commission’s action turned an energy crisis into a financial catastrophe for many electricity buyers, who were left paying billions of dollars more for the same limited supply of electricity as before."

Bloomberg: Venezuela Turns to Privatization After Being Bankrupted by Socialism

After much pain and suffering, Venezuelan socialist leaders have conceded they cannot effectively run an economy.

By Jon Miltimore of FEE.

"Early in 2007, after winning a second six-year term as president, Hugo Chávez announced his plan to nationalize Venezuela’s largest telecommunications company, CANTV, hinting at wider nationalization plans to come.

“All that was privatized, let it be nationalized,” announced Chávez, who had run under the banner of democratic socialism.

Nearly a decade and a half later, on the brink of mass famine and a growing energy crisis, Venezuela is now moving in the opposite direction.

According to Bloomberg News, Venezuelan president Nicolás Maduro has quietly begun transferring state assets back into the hands of private owners in an effort to reverse the country's economic collapse.

“Saddled with hundreds of failed state companies in an economy barreling over a cliff, the Venezuelan government is abandoning socialist doctrine by offloading key enterprises to private investors, offering profit in exchange for a share of revenue or products,” write Caracas-based journalists Fabiola Zerpa and Nicolle Yapur.

The transfer, which was not announced publicly but was confirmed by “nine people with knowledge of the matter,” reportedly includes dozens of coffee processors, grain silos, and hotels that were confiscated as part of Venezuela's widespread nationalization that began under Chavez.

Venezuela’s Collapse

In some ways, Venezuela's plight is the most unlikely of stories.

In 1950, Venezuela was one of the most prosperous nations in the world. It ranked among the top 10 in GDP per capita and had a labor force with higher productivity than the United States.

Venezuela’s economic growth began to stall in the mid 1970s, however, after it nationalized the petroleum sector, which resulted in a surge of government revenue and public spending. It’s estimated that Venezuela brought in $7.6 billion in 1975 alone from nationalization ($37 billion in 2021 dollars). This led to an unprecedented surge of public spending. John Polga-Hecimovich, a professor of political science at the US Naval Academy, said the Venezuelan government spent more from 1974 to 1979 than in its entire previous history.

Despite the growth in government spending, the political situation remained relatively steady. In the late 70s, University of Michigan political science professor Daniel H. Levine asserted that “Venezuelans have achieved one of the few stable competitive political orders in Latin America.”

However, Venezuela’s flirtation with socialism would eventually turn into a love affair.

In 1998, Venezuelans voted in Chavez, a populist and self-described Marxist. He was re-elected in 2000 (59.8% of the vote) and in 2006 (62.8%), at which point he began to nationalize various sectors of the economy—including agriculture, the steel industry, transportation, and mining—and confiscating more than a thousand companies, farms, and properties.

At the time of Chavez’s death, his socialist policies were heralded by Salon as an “economic miracle”—but in reality the Venezuelan economy was already in a free fall.

By 2014, with the price of oil collapsing, Maduro’s government admitted it was in severe recession and Venezuela was suffering from the highest inflation in the Americas. By January 2016, the country was on the verge of “complete economic collapse.” Not long after, the Venezuelan government abandoned any pretense of being a “democratic” regime.

A 2019 United Nations report concluded that there were “reasonable grounds to believe that” Maduro’s government had used special forces to kill thousands of political opponents in “extrajudicial executions.”

To date, it is believed that more than 5 million Venezuelans have fled the country to escape economic ruin and political oppression.

Privatization to the Rescue?

The collapse of Venezuela, once the most prosperous country in Latin America, is hardly a secret. But Maduro’s pivot toward private enterprise in an attempt to stabilize the collapsing country is a new revelation.

It’s not unprecedented, however.

“This process is similar to the privatization process in Russia in that assets are transferred to private local companies and to investors from countries allied to the government,” Asdrubal Oliveros, head of economic consultancy Ecoanalitica, told Bloomberg.

Rodrigo Agudo, head of the Venezuela Food Network, told the news agency that the regime instituted “a wild capitalism” by ceasing the collection of taxes on certain companies, liberalizing licensing on imports, and convincing military and other connected officials to invest in certain businesses.

Ramon Lobo, a lawmaker with the ruling socialist party and a former finance minister, said the arrangements tend to have time limits (usually less than 10 years) and work much like a concession. Companies are allowed to invest and manage the asset, with the government then taking a percentage.

“We believe this is positive because it is the synchronization of the public sector with the private sector,” said Lobo. “The state acts as a supervisor and receives compensation.”

Economic Fascism Is Not Capitalism

In one sense, the revelation of Venezuela’s privatization push is a clear positive development.

Maduro’s effort to quietly form private-public partnerships, a strategy that began in 2017, reveals the total failure of Venezuela’s command economy. Bloomberg points out, for example, that once-successful food processing plants have been “mostly idle” since being seized by the government, plants that could have been feeding a starving population.

This revelation is both tragic and infuriating, but it’s not surprising. By their very nature, command economies are doomed to fail because they lack the basic incentive and price structures that are present in a market economy.

“It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movements of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement,” the Nobel Laureate economist F.A. Hayek wrote.

Many might be tempted to think that Maduro was just a bad or stupid person. But Ludwig von Mises reminds us that the quest to find the right person to run a command economy is a futile one for this very reason.

“It has not been realized that even exceptionally gifted men of high character cannot solve the problems created by socialist control of industry,” Mises observed.

It seems that after much pain and suffering, even socialist leaders in Venezuela have conceded that they cannot run an economy with enough efficiency to avoid economic ruin. But while returning enterprises to private owners is a step in the right direction, it’s hardly accurate to call Maduro's strategy “capitalism.”

The Maduro government is still using everything from price controls on food to minimum wage hikes to currency manipulation to manage its economy, not to mention selecting which businesses get to participate in its privatization efforts (and who gets to invest). In terms of overall economic freedom, Venezuela ranked 179 out of 180 countries in 2020—one place ahead of North Korea and one behind Cuba.

At best, Venezuela’s current economic system is a form of fascism, which Sheldon Richman once described as “socialism with a capitalist veneer.”

So while applauding Venezuela’s small but important step, we should not lose sight of an observation from Nobel Laureate economist Vernon Smith, who in 2018 noted that prosperity would return almost at once to Venezuela if politicians repealed their harmful policies and unleashed the power of markets."

Obama Adviser Tells MSNBC: COVID Bill is COLOSSAL Waste of Money

By Kyle Drennen of the Media Research Center.

"Appearing on Friday’s Morning Joe, former Obama administration Treasury Department official Steve Rattner proved that the COVID relief bill being pushed by Democrats was a massive boondoggle that could cause inflation and waste huge sums of taxpayer dollars. That revelation came after co-host Joe Scarborough earlier denounced Republicans as “extremists” for opposing the unnecessary spending.

To the chagrin of the MSNBC anchors, Rattner explained: “...as you guys have been talking about yesterday and today, it’s an enormously popular package. I doesn’t make it a good package.” He then compared the ill-advised plan to giving away “$100 bills on street corners,” which he acknowledged “would probably be popular as well.”

A chart appeared on screen showing that the planned $6.1 trillion in COVID relief spending (a total including the $4 trillion already spent combined with the proposed $1.9 trillion in new spending) was many times greater than the $1.8 trillion of government relief doled out during the entire Great Recession a decade ago.

Presenting a second chart, Rattner used the data to show just how wasteful and unnecessary the new COVID bill being pushed by the Biden administration truly was:

So let’s try to put those in perspective with the needs that are out there last time and this time by looking at my next chart, which compares what we did then to what we did now, again, in terms of the need. So on the left, you can see that the first part of the last rescue package was $755 billion....And so this $1.9 trillion is substantially, enormously in excess of what the amount of economic gap that we are trying to make up.

He then warned: “And the result of that can be inflation, it can certainly be money that’s not well spent.”

A puzzled Scarborough interjected: “...you’re saying the red dot represents how much money has been taken out of this economy because of COVID, since COVID, and that we’re more than doubling the amount of money that we’re throwing at the problem than what we need?”

Rattner confirmed that, even noting it was worse: “Ah, yes. That’s actually close to tripling it. Yes, that is exactly the point....we’re throwing almost three times as much money at that problem as the size of the problem.”

In his final chart, Rattner informed the liberal hosts:

...there’s $515 billion of money in here for state and local governments and education....What I’ve put on the left are three different estimates by three different analysts and think tanks as to what the need is. So the American Enterprise Institute, as we know, which is somewhat right-leaning, thinks there’s basically no need. State and local governments have actually done a good bit better during this period than we thought they would. Tax revenues are better than we thought they’d be, especially for states like California, that benefit from these huge run-up in tech stocks. Then you come to Moody’s, which is an un-aligned, nonpartisan group, Moody’s Analytics, and you can see they’ve put the need at $61 billion. And then you come to the Center on Budget and Policy Priorities, which is a very responsible but left-leaning liberal group, and they put the need at $300 billion.

So even if you went with the analysis of the most liberal group of three, the Biden COVID relief package would waste $215 billion on aid for state and local governments as well as education. According to the most objective analysis from Moody’s, the Biden bill would waste a whopping $415 billion on that area alone.

Rattner concluded: “It’s worth noting that we have already spend $360 billion on state and local government aid and education, much of which actually hasn’t made its way all the way out yet....this is an example of where this package could be substantially greater than the need.”

The sharp criticism of the Biden plan from Rattner being allowed on MSNBC would be remarkable by itself, however, it was made more so by the fact that just 30 minutes earlier Scarborough tarred Republicans as “extremists” for opposing the legislation:

So expect the Democrats to come back at this $15 an hour minimum wage. I just think politically it would be smartest to have Republicans do an up or down vote. Have them vote no against that like they voted no against this COVID relief bill that, again, is supported by 75% of Americans. They are the radicals. They are out of step with working class Americans. They are out of step with middle-class Americans. They are out of step with small business owners. They are the ones that are painting themselves into the corner of extremists. And this will only hurt them more with those suburban voters who were flooding away from them.

He also attacked the GOP for objecting to Democratic efforts to force through a $15 minimum wage hike that the Congressional Budget Office has projected would cost 1.4 million jobs.

Interestingly, Scarborough didn’t try to smear a Democrat like Rattner with the same insults.

That earlier anti-GOP tirade was brought to viewers by Subway and Dove. You can fight back by letting these advertisers know what you think of them sponsoring such content."

Market design to accelerate COVID-19 vaccine supply

By multiple authors including Susan Athey, Michael Kremer & Alex Tabarrok.

"Abstract

Build more capacity, and stretch what we already have

Each month, COVID-19 kills hundreds of thousands of people, reduces global gross domestic product (GDP) by hundreds of billions of dollars, and generates large, accumulating losses to human capital by harming education and health (1–4). Achieving widespread immunization 1 month faster would thus save many lives and mitigate short- and long-run economic harm. Although the value of vaccines may seem obvious, government action and investment in vaccines have not been commensurate with the enormous scale of benefits, with many countries not likely to achieve widespread immunization until the end of 2022.

We estimate below that installed capacity for 3 billion annual vaccine courses has a global benefit of $17.4 trillion, over $5800 per course. Investing now in expanding capacity for an additional annual 1 billion courses could accelerate completion of widespread immunization by over 4 months, providing additional global benefits of $576 to $989 per course. This dwarfs prices of $6 to $40 per course seen in deals with vaccine producers, indicating the wide gap between social and commercial incentives. We urge governments and international organizations to contract with vaccine producers to further expand capacity and encourage measures described below to “stretch” existing capacity (such as lower-dose regimens) and efficiently allocate courses (such as a cross-country vaccine exchange).

Our analysis involves two exercises, first estimating the global benefits from vaccine capacity already in place, then estimating the benefits of undertaking additional capacity investment starting now [see the supplementary materials (SM) for all data and methods]. The enormous estimates from both exercises provide a wake-up call relevant for the current pandemic—that it is not too late to invest in more capacity—and future pandemics—that preparations to shorten delays in rolling out vaccines, treatments, and other countermeasures at global scale could prevent enormous harm."

COVID Is Killing The Private Schools for Everyman

By Neal McCluskey of Cato.

"Over that past couple of months, we have seen an uptick in permanent private school closures that are at least partially due to COVID-19 – 9 in the last 60 days, after just 3 in all of September through December – and we are likely to see many more soon, as schools take stock of enrollment numbers for next year and decide if they will be viable. And who do these closing schools tend to serve? Almost certainly “regular,” or even low‐​income, families.

From the outset of our tracking we have published the average tuition of closing schools, which currently sits at $7,032. That strongly indicates that these are not typically schools serving, say, the children of presidents. To put $7,032 in context, we spend more than double that – $15,424 per student – in public schools, and according to Private School Review, the average tuition for private schools is $11,173.

To burrow a bit deeper into the character of closing schools, we took a look at the median family income in the census tract for each school on our tracker. Again, the evidence points to the schools in trouble being those that serve ordinary people, not the rich. The median, median family income for the census tracts of schools on our tracker is $75,117. In 2019, the median family income nationally was $88,149.

The private schools on our list are – or were – typically in lower‐​income communities. They are also typically Roman Catholic. Not surprisingly, as we see on the chart above, which reports average tract median incomes by type of school, Catholic schools tend to skew toward lower‐​income areas. (Note, however, that other than independent schools, we have very few non‐​Catholic institutions on the tracker).

What does this mean for public policy?

First, while it should not be the concern of the federal government to save private schools, the COVID “relief” Washington is contemplating would put them at an even greater competitive disadvantage than they are already in, since they have to charge tuition and public schools are “free.” By our estimates of enacted and potential aid, public schools would receive $3,945 in assistance per‐​pupil, and private schools only about $2,276.

If there is to be more federal aid, it should simply follow students.

At state and local levels we need to expand school choice programs. Currently 26 states have legislation to do that, but the road is always rocky as teacher unions, school board associations, and other establishment interests use their large numbers and easy ability to organize to fight choice. On the flip side, the pandemic has made the need for choice increasingly obvious, even among people who have generally been happy with the public schools.

The private schools we are losing are not rich. They are disproportionately low‐​cost, and in lower‐​income areas. To help them, policymakers do not need to do something extraordinary. They just need to treat the families that want to use them equally."

Some Preliminary Thoughts on the Texas Electricity Meltdown

By Peter Van Doren of Cato.

"Alternating current electricity systems require that demand equals supply in real‐​time. Any supply‐​demand imbalance must be remedied in minutes to avoid collapse of the system that would take weeks to repair. And the Texas system was very close to collapse.

So what went wrong in Texas? The short answer is that demand was about 69,000 megawatts (and estimates of what demand would have been had supply been available were 74,000 MW) while available supply was about 46,000 megawatts. When supply is unexpectedly reduced, the remaining generators must work harder. If demand is not reduced within minutes the remaining generators will fail. The first demand reduction occurs through contract. Large commercial customers pay less in return for giving the system operator (in this case a non‐​profit corporation called the Energy Reliability Council of Texas) the right to terminate their electricity use. When this reduction proved insufficient, ERCOT instituted rolling blackouts to remaining customers who had contracted for normal service. This last resort was instituted with less than 5 minutes from the collapse of the Texas electricity system.

Why was available supply so short? The Texas system has two unique features that many have argued were responsible. The first is the lack of alternating current transmission connections to other states to avoid federal regulation. The result is that Texas is (almost) totally reliant on electric generation located within the state. Because Texas is a large state this is not an obvious defect. The New York and New England grid systems have less than half the peak demand of Texas while the Mid‐​Atlantic and Midwest systems have double and 1.75 times, respectively, the peak demand of Texas.

While I have not yet seen a definitive analysis of the availability of generation reserves in nearby states, interstate connections would have prevented rolling blackouts only if reserves in other states were large enough. Given that nearby states also were cold and had high generation utilization, and the generation shortfall in Texas was so large, interstate connections may not have altered the outcome.

The second unique feature of the Texas electricity system is the absence of governmentally imposed generation capacity requirements. In all states, except Texas, the electricity regulatory agencies require generation capacity to exceed peak demand use (in the previous few years) by an arbitrary administratively determined percentage. Instead, Texas relies only on an auction market in which generators offer power and ERCOT accepts bids until supply equals anticipated demand. The highest price offered that clears the market sets the price for all generators.

At times of peak demand (usually in the summer) prices received by generators can exceed normal prices by a factor of more than 100. These high prices are the sole mechanism Texas uses to induce supply that is only utilized a few weeks a year during the summer peak. The intellectual debate about the adequacy of the Texas system to induce sufficient supply has existed since its inception and many blame the lack of explicit capacity requirements for the Texas meltdown.

What are the comparative results of these two methods of procuring adequate supply? The estimated reserve margin (Table 3) in Texas is the lowest among electricity regions. But this comparison is misleading because the reserves in other regions with explicit excess capacity requirements greatly exceed their own requirements (p. 44). “The three east coast grid operators have set a goal of procuring 13.5% reserve margins, yet the New York, New England, and Pennsylvania‐​New Jersey‐​Maryland system operators each have reserve margins that hover around thirty percent.” The 2020 reserve margin (p. x) in Texas was 12.6%, not that different from the planned reserve capacity of the regions that have explicit capacity markets.

If Texas had explicit capacity requirements, they would have been on the order of 15% rather than more than a third. Capacity markets in other regions have been the subject of much criticism for defects in design that result in excess capacity in the 30 percent range, more than double their intention, so one cannot argue a well‐​designed capacity market would have prevented the blackout because the capacity goals of such systems are much less than the generation loss that occurred in Texas.

So, Texas had available generation capacity of over 83,000 megawatts (Table 3) but only 46,000 was operational. So why was so much Texas supply unavailable? According to a report on a similar winter blackout in 2011, generators were unavailable because of failure to “winterize” their operations. In plain English, the boilers and turbines in Texas are outdoors to avoid having to dissipate the heat during the summer (p. 142). Thus, during infrequent cold snaps, important components freeze and automatically trip sensors that force generating units offline.

Why don’t Texas generators winterize their operations? The 2011 report (pp.179–180) concluded that the costs of winterization (insulation and heat tape) were not large ($50,000 to $500,000), yet generators did not heed the winterization recommendations of the 1989 report following the freeze in that year.

One claim is that the lack of capacity requirements in Texas (and the lower prices that result) serves customers well most of the time with low prices but reduces incentives for generators to invest in precautions against extreme events. But in 2019 in the Pennsylvania New Jersey Maryland region, wholesale electricity prices (p.102) averaged 2.7 cents per kWh and 2.1 cents in the first 9 months of 2020 while in Texas wholesale prices (p.ii) averaged 4.7 cents per kWh in 2019. And retail residential prices in 2019 were 13.12 cents per kWh in Maryland and 11.76 cents per kWh in Texas.

So wholesale prices are actually higher in Texas because of the lack of subsidized capacity, but are the decreased retail residential prices in Texas enough lower to make blackouts a rare but rational cost‐​benefit outcome? ERCOT commissioned an analysis of the value of lost electricity to ERCOT customers in 2013. It concluded (p.66) the value was $6 a kWh for commercial and industrial customers but only 11 cents per kWh for residential, more or less the current retail price they pay.

Some residential customers in Texas (about 29,000) contracted to pay wholesale prices (5 cents per kWh on average) but up to $9 a kWh during the blackout. Those high prices induced 2/3 of generators to winterize, stay operational, and allow those customers to have their electricity. But the negative reaction of the customers and the Governor of Texas (as well as the time‐​inconsistent behavior of the retail provider, which told its customers to switch to fixed‐​rate retail service just before the storm, suggests the limits of exposing residential customers to low prices most of the time and very high prices some of the time in return for uninterrupted electricity.

So the decentralized decisions of more than a third of independent generators in Texas appear to have resulted in inadequate winterization investments. But there is another possibility, the susceptibility of natural gas supply itself to freezing. Water is a byproduct of natural gas production and small amounts of ice can shut down a well in what is termed a “freeze off.” Water from production is also stored at natural gas wells and must be hauled away. Bad weather can stop that. Once water storage capacity is reached, sensors shut down production (p. 9). The analysis of the 2011 cold weather electricity outage (pp. 140–141) concluded that while the majority of generator failures were related to their lack of weatherization efforts, 10 percent of the generator failures and kilowatt‐​hour reductions were the result of natural gas delivery reductions because of freezing water. It is possible that natural gas supply reductions rather than the lack of generator winterization played a larger role this year.

So in my view three questions require answers. First, were generation reserves large enough in neighboring states so that conventional transmission interconnections available elsewhere in the U.S. would have provided sufficient supply to avoid blackouts? Second, why do a third of Texas generators repeatedly fail to winterize their operations while two‐​thirds remain operational during cold snaps given that they all operate under the same system of payments for energy produced? Finally, did natural gas supply failures play a larger role in 2021 than in 2011."

Second doses are boosting people from ~85% to ~95% protected while first timers go from 0% protected to ~85% protected

See A Majority of Doses are Now Second Doses by Alex Tabarrok.

"As of Feb. 18 (last day of full data) we gave out 817,708 second doses and just 702,426 first doses. In other words, a majority of doses are now second doses. As Daniel Bier writes this means that we are boosting some people from ~85% to ~95% protected when we could be vaccinating more first timers and getting them from 0% protected to ~85% protected.

If we followed the British rule and delayed the booster to 12 weeks, we could immediately more than *double* the number of people going from 0% protected to to ~85% protected. More first-doses would be great for the newly protected and more people at ~85% protection would also reduce transmission so there would be fewer new infections and less threat to the non-vaccinated.

The opportunity cost of not delaying the booster is measured in lives lost."

 

The Effect of the Minimum Wage on Employment and Unemployment

By David Henderson.

"In a comment on my blog post about the proposed $15 federal minimum wage, frequent (and careful) commenter KevinDC quotes my statement:

Here’s what they found. The vast majority of studies, 79.3 percent, found that a higher minimum wage led to less employment.

He then comments:

I like the precise wording here by using the term “less employment.” One thing I’ve tried explaining to people is that is possible for increases in the minimum wage to decrease employment without increasing unemployment, because economists are bad at naming things in a way that make intuitive sense to people outside the field. (“Public goods? Obviously that means goods provided by the public sector, right?” “Market failure? That’s whenever I personally don’t like a market outcome, isn’t it?”) So, even in the case where  particular study doesn’t find increased unemployment after a minimum wage hike, that doesn’t actually mean that the increase in the minimum wage didn’t decrease employment.

Well said, Kevin.

I want to add that the CBO study I cited makes this distinction also. Here’s a key paragraph:

Taking those factors into account, CBO projects that, on net, the Raise the Wage Act of 2021 would reduce employment by increasing amounts over the 2021–2025 period. In 2025, when the minimum wage reached $15 per hour, employment would be reduced by 1.4 million workers (or 0.9 percent), according to CBO’s average estimate. In 2021, most workers who would not have a job because of the higher minimum wage would still be looking for work and hence be categorized as unemployed; by 2025, however, half of the 1.4 million people who would be jobless because of the bill would have dropped out of the labor force, CBO estimates. Young, less educated people would account for a disproportionate share of those reductions in employment."

Ivy League Study Warns Biden’s Expensive ‘Stimulus’ Plan Will Hurt Economy in the Long Term

Wharton School analysts concluded that Biden’s proposed spending binge would actually lead to a smaller economy in 2022. Here’s why.

By Brad Polumbo of FEE. Excerpt:

"Scholars at the University of Pennsylvania’s Wharton School of Business analyzed the plan and found that the massive spending splurge—which costs roughly $13,260 per federal taxpayer—would only cause a “slight uptick” in economic growth in 2021. The analysts warned that this minor boost would just be “instant gratification,” and that the skyrocketing government debt caused by the blowout legislation would undermine any gains in the medium-to-long term.

“The existence of the debt saps the rest of the economy,” Wharton analyst Efraim Berkovich said. “When the government is running budget deficits, the money that could have gone to productive investment is redirected.” 

“Effectively, what we’re doing is taking money from [some] people and giving it to other people for consumption purposes,” he continued. “That has value for social safety nets and redistributive benefits, but longer-term, you’re taking away from the capital that we need to grow our economy in the future.”

Biden’s costly plan would explode the national debt. This, per Wharton, would lead to a “crowding out” effect over the coming years as more loan money is taken away from productive business/private sector investments and instead consumed by government debt. 

As a result, the analysts find that workers would see a small decline—not an increase—in their hourly wages by 2022 and a slightly larger decline in their hourly wages by 2040. In 2022, the overall number of hours worked would actually fall due to the plan. 

So, Wharton concludes, Biden’s spending binge would actually lead to a smaller economy in 2022. How’s that for “stimulus?”

And we must also consider the other elements of Biden’s plan that would sabotage the economic recovery, like the inclusion of a federal $15 minimum wage. This partisan provision would eliminate millions of jobs, devastate struggling small businesses, and lead to higher consumer prices."

Former Princeton professor: Black Lives Matter using black people to advance 'cultural Marxist agenda'

By Andrew Mark Miller of The Washington Examiner. Excerpt:

"A former professor at Princeton University denounced the Black Lives Matter movement and the politicians who have supported the increasingly popular group.

“It's part of the cultural Marxist agenda against America, and many of the protesters that are out there, the corporations that are given money, I believe that they are sincere, that they believe that racism in America isn't tolerable, that it hasn't improved, and that black people live their lives in fear,” Carol Swain, a black woman, said about Black Lives Matter on conservative radio host Mark Levin’s Fox News show. “That's a false narrative.”

Swain said that she identified as a Democrat up until 2009 but drifted away from the party, and she criticized members of the Democratic Party for what she said was the party supporting the removal of statues it deems offensive. She accused the party of “using black people to advance a radical agenda that will be destructive to our nation” that will “hurt all of us.”

“It's clear that this whole movement to tear down monuments, I believe it's really focused on dividing the country even further because the monuments are part of our history. If we can't learn from my history, then we're in trouble,” Swain said. “If we start tearing down the monuments, what happens tomorrow when the leaders that we are celebrating today, when those people fall out of favor? It's the wrong path for our nation. It's divisive. It's opportunism. And it's just meant to stir up people that are traditionalist, people that love America, people that are patriotic.”

Swain also took issue with the phrase “Black Lives Matter” and expressed the belief that the organizations raising money using that terminology are serving as fundraising arms for Democratic candidates.

“It's absolutely about power, and if you go to the Black Lives Matter website and you click on the link to donate, that money is going to Democratic candidates. It's not really advancing the cause of black people,” Swain said.

“And I think that it's very problematic that ... because the slogan 'Black Lives Matter' is a true statement, people that want to help blacks, and they are white, they're being shamed. They feel like the only way they can show support is to donate money or to acquiesce or get down on their knees before black people, and that's not going to benefit the black community.”

In response to calls to defund and disband police departments in the wake of George Floyd’s death on May 25, Swain described the idea as "ludicrous" and said it will "hurt black people more than any other group.""

Thomas Sowell: Idea of 'systemic racism' a lie that has 'no meaning' and is reminiscent of Nazi propaganda

By Andrew Mark Miller of The Washington Examiner. 

"Economist Thomas Sowell expressed the belief that the term “systemic racism” has “no meaning” and that it reminds him of Nazi Germany.

“It really has no meaning that can be specified and tested in the way that one tests hypotheses,” he said, adding that the phrase’s currency is reminiscent of Nazi “propaganda tactics” and that people accept the lie after it’s “repeated long enough and loud enough.”

"It does remind me of the propaganda tactics of Joseph Goebbels during the age of the Nazis," Sowell, who is black, told Fox News host Mark Levin on his show, Life, Liberty and Levin, during a Sunday airing. "It's one of many words that I don't think even the people who use it have any clear idea what they're saying. Their purpose served is to have other people cave in."

"They're absolute hypocrites," Levin said about today’s liberal Left. "They claim they want equality for all. They claim that there'll be the withering away of the ... police departments ... and yet every time you look at a Marxist state, it is an authoritarian, top-down, centralized police state."

The subject of the 2020 race came up during the interview, and Sowell, who identified as a liberal in his younger days before becoming a conservative, said that if former Vice President Joe Biden is elected and Democrats control Congress, it “could well be the point of no return for this country.”

The famed economist also discussed his new book on charter schools entitled Charter Schools and Their Enemies, speaking in favor of competition and agreeing with Levin’s belief that minority communities are often the ones that get hurt by opposition to charter schools.

Sowell, 90, was born to a poor family in North Carolina before moving to Harlem, New York, and ultimately earning degrees from Harvard University, Columbia University, and the University of Chicago. 

An author who currently serves as the Rose and Milton Friedman senior fellow on public policy at Stanford University’s Hoover Institution, Sowell has touched on race and perceived racial disparity in several of his books. In his 2004 book, Affirmative Action Around the World: An Empirical Study, he argues that affirmative action is a misguided practice.

“One of the few policies that can be said to harm virtually every group in a different way," he wrote. "Obviously, whites and Asians lose out when you have preferential admission for black students or Hispanic students — but blacks and Hispanics lose out because what typically happens is the students who have all the credentials to succeed in college are admitted to colleges where the standards are so much higher that they fail.”

Sowell has also opined on the issue of racism in America, explaining in 2012 that “racism is not dead, but it is on life support — kept alive by politicians, race hustlers and people who get a sense of superiority by denouncing others as ‘racists.’”

Sowell’s appearance on Levin’s show comes as prominent black voices across the country, including Carol Swain, Marcellus Wiley, Niger Innis, Jason Whitlock, and Leo Terrell, have criticized the Marxist beliefs of Black Lives Matter, which the co-founder of the organization openly admitted."

Texas-Style Blackouts Are the Future

The grid is designed to shut down, and we’re designing it to shut down more often.

By Holman W. Jenkins, Jr. Excerpts:

"In covering this week’s Texas outages, the Economist magazine couldn’t decide whether the world’s “climate crisis” or “America’s infrastructure crisis” was the right headline. The reality is more prosaic. Significant freezing episodes led to blackouts at least seven times from 1983 to 2011. In Texas, politicians, utility executives and citizens have repeatedly been asked by nature: Do you want to winterize your grid against rare winter outages or do you prefer lower rates? Lower rates kept winning, at least till now."

"The conversation people need to have begins elsewhere: Americans want reliability from their grid, yes—and low prices, reduced emissions and no unsightly infrastructure. These wants are in tension.

In Texas, every kind of power source suffered a variety of mechanical malfunctions due to an extraordinary icing episode, with wind power taking the worst hit by percentage. In the Northeast, the perennial challenge is trees that neighbors are reluctant to see cut down. But you only have to dig a quarter-inch into the reliability literature to see that, while weather is always with us, and while “major events” will tend to steal the show, renewable intermittency is the new systematic challenge to grid reliability. Renewables are a puzzle both directly and indirectly because they suck up investible resources that might be used for other purposes."

"Power lines are unwelcome. Solar arrays and wind farms are not everybody’s idea of pretty and so must be located in unpopulated areas. Batteries can’t yet cure an intermittency problem, leaving only conventional plants. Coal is the worst of greenhouse offenders, gas is better and yet still opposed by greens, and forget about nuclear.

Texans had a rough week, say it again, because of an outlier cold snap that its system was designed to handle by shutting down. Temperatures are headed back into the 50s and 60s this weekend. You, me and everyone else live in utility districts where certain emergencies, such as those caused by trees on power lines or wildfires, are also designed to be handled by systems shutting down. We live with this.

But I doubt many people will be phlegmatic when Texas-like rolling blackouts come to the Northeast or New England one of these winters, as they almost did in the 2014 polar vortex. Falling trees won’t be the culprit. The guilty party will be our choice not to invest in pipelines and backup gas plants to support our desired renewables in the face of cold spells a lot more predictable than those that landed on Texas."

The Texas Freeze: Why the Power Grid Failed

By Katherine Blunt and Russell Gold of The WSJ. Excerpts:

"“The premises of that paradigm have changed,” said Bernard McNamee, a former Federal Energy Regulatory Commission member who is now a partner at law firm McGuireWoods LLP. Renewable-energy sources cannot be turned on and off like a power plant, making it harder to ensure sufficient supply at any one time. “That’s why public policy makers and electricity officials need to address some of the shortcomings.”

William Hogan, an energy economist at Harvard University who helped design the Texas market, said this week’s blackouts weren’t indicative of a major design flaw, but rather inevitable imperfections stemming from extraordinary weather challenges.

“I don’t know of any market design that exists anywhere that would have anticipated and have been prepared for something of this scope and scale,” he said."

"In Texas, the system has largely worked during the sweltering summer months, when air conditioners are blasting."

"Within the competitive Texas power market, there is a strong incentive for generators to keep costs down to recoup their investments. The rapid buildout of wind and solar power, which are now among the cheapest sources of electricity, have pushed prices even lower in recent years, making it more difficult for gas and coal plants to compete.

For plant owners, that presents a paradox: Should they add to their capital costs by preparing for severe cold snaps that occur only occasionally, or skip the preparation and risk tripping offline, missing out on high prices and exacerbating a potential supply shortage?

“With everything there is a trade-off,” said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School. “More resilience is potentially more expensive, but electricity is an essential service. These are hard decisions.”

Texas deregulated its power market at a time when policy makers across the country were considering ways to reduce electricity costs by modernizing the utility model. For most of the 20th century, utilities were vertically integrated, controlling every aspect of electricity supply from generation to delivery.

That remains the model through much of the Southeast, where utilities remain responsible for grid reliability. State regulators oversee their investments in power plants and grid improvements and allow them to recoup costs through customers. That has sometimes resulted in cost overruns that drive up the price of electricity.

Other market designs have emerged elsewhere. PJM Interconnection, an electricity market serving 13 states from Virginia to Illinois, runs a “capacity market” meant to ensure enough power is available to meet peak demand three years in the future. It is an insurance policy against uncertainty and extremes. Power producers who promise to show up are paid for that commitment, and penalized if they fail to deliver.

Critics of that model say it is more expensive than others because it pays for power that might never be needed. And PJM has fewer wind and solar farms in its territory than some other markets, making it easier to contract for resources that can fire up on demand. Gas plants can start up on demand, but wind and solar production depends on weather, time of day and storage.

Texas has what is known as an “energy only” market. Producers are paid only for the power they generate. If they were paid to be on standby for all weather conditions, that would encourage investments to ensure they are ready to go, electricity-market veterans say.

Regardless of the model, all power markets face a common challenge: how to prepare for the possibility of extreme events that are statistically unlikely and difficult to predict."

Joaquin Castro Accidentally Makes the Case for 'Price Gouging'

Texas officials' rush to enforce price gouging laws during that state's winter storms will only make residents worse off

By Christian Britschgi of Reason.

"A rare winter storm has left millions of Texans without power, prompting many people to flock to grocery stores for emergency supplies, or to hotels in search of electrified, heated shelter. That surge in demand has prompted predictable, misguided warnings from Texas officials about the dangers of "price gouging" during the state's emergency.

"We can't imagine anything more cruel than taking advantage of people who are suffering right now in this disaster," said Harris County Judge Lina Hidalgo at Wednesday press conference announcing a new initiative whereby residents can report, via text or email, extraordinary price increases to the County Attorney's office.

That same day, San Antonio Mayor Ron Nirenberg and Bexar County Judge Nelson Wolff amended their emergency declaration to remind folks that it is illegal to sell "groceries, restaurant meals, medicine, hotel rooms, or fuel for more than the regular retail price."

The day before, the Texas attorney general's office tweeted information about its own consumer protection hotline where people can report price gouging to state authorities.

Rep. Joaquin Castro (D–Texas) has gotten in on the action too, in a tweet that inadvertently making the case for the "gougers".

"Potential price gouging by energy suppliers, hotels and other businesses is occurring through the state because of scarcity," said Castro when tweeting out a picture of an empty grocery store shelf. "No price gouging at H-E-B but here's just one shelf from earlier today."

That the grocery store he visited had both "fair" prices and empty shelves is no mere coincidence. Texas's price gouging laws effectively mandate this outcome.

When demand surges for a product, but prices are required by law to stay flat or rise only slightly, consumers will quickly buy up whatever they can get their hands on at a cost that doesn't reflect the sudden urgency of their purchase.

Meanwhile, the higher prices that would incentivize market actors to expand the supply of suddenly scarce goods are cut out of the equation, ensuring that shortages will continue as long as emergency levels of demand remain.

This contrasts with what we'd expect to happen in a free market, as the Duke political scientist Mike Munger explained last year to Reason.

"If the price of something goes up and there's a shortage, three great things happen," says Munger. "The first is that consumers buy less. They look at that price and they say, 'You know, somebody else must need this more than I do,' and so they leave some for the person behind them."

Had the H-E-B Castro visited raised its prices to meet market demand, the people who got there before him probably would have bought fewer cans of tuna or rolls of toilet paper, helping to preserve the store's limited supply.

"The second thing is that producers try to find ways to make more," Munger continues. "The third thing is that entrepreneurs try to find ways to make substitutes."

Without the allure of higher prices, out-of-state companies and amateur entrepreneurs help less incentive to ship in bottled water and generators on Texas' ice-covered highways. Price gouging laws require these would-be suppliers to take on extra hassle, risk, and expense to sell their wares at the same price they could get back home.

Markets don't stop working in dire circumstances. Trying to suppress them during an emergency, as Texas officials are doing, is only making the state's residents worse off."