‘Team Transitory’ Was Wrong on Inflation

Alan Blinder’s revisionist history doesn’t wash

Letters to The WSJ.

"Alan Blinder argues that “Team Transitory Had a Point About Inflation” (op-ed, July 20). He’s right that supply-side factors made inflation worse than it otherwise would have been. But he’s wrong that these factors were the primary cause of price hikes.

First, aggregate demand (total nominal spending) is clearly elevated from its prepandemic trend. This can be explained only by some combination of stimulative fiscal and monetary policies.

Second, if supply problems caused inflation, we should now experience outright deflation. Bottlenecks have eased; many prices are falling. Yet all we’re getting is slower inflation.

Third, Mr. Blinder overstates the importance of the Ukraine war. Consumer price inflation started rising more than a year before Vladimir Putin’s invasion. Further, volatile food and energy prices can’t explain why core inflation remains elevated.

Mr. Blinder concludes with a not-really mea culpa: He “overestimated the capabilities of competitive capitalism . . . to alleviate the bottlenecks.” Actually, inflation shows that markets are working the way they’re supposed to. Rising prices are a signal that goods are increasingly scarce relative to money. It isn’t the thermometer’s fault it’s hot outside.

Prof. Alexander William Salter

Rawls College of Business, Texas Tech

Lubbock, Texas" 

"Mr. Blinder ends on a positive note, suggesting that the recent significant reduction in the inflation rate has been accomplished “without any appreciable slack in the economy.” While the professor may not consider real earnings to be part of “slack,” I suspect most households would. Data from the St. Louis Federal Reserve Bank show median weekly real earnings fell 9% in the two years from Spring 2020 to Spring 2022. In the past year only 1.7% of that loss has been recovered. At this pace, it will take four more years for real earnings to recover to their Spring 2020 level. The “appreciable slack” households will continue to feel is in their standard of living.

Em. Prof. Michael L. Walden

North Carolina State University

Raleigh, N.C."

America’s Choice: Immigration or Bust

By 2040 the U.S. could have six million fewer working-age people

WSJ editorial. 

"The U.S. has a people problem. The birth rate has been sliding for years, and it’s about to translate into a shrinking labor force. By 2040, according to a study out this week, America could have more than six million fewer working-age people than in 2022. The only way to counter the domestic trend is by attracting workers from abroad.

“The working-age U.S. population has peaked absent additional immigration,” writes Madeline Zavodny, in a forthcoming paper from the National Foundation for American Policy. “New international migrants are the only potential source of growth in the U.S. working-age population over the remainder of the next two decades.” Ms. Zavodny is an economics professor at the University of North Florida, and her analysis is based on data from the Census Bureau and Bureau of Labor Statistics.

At a time when some Americans view foreign workers as cheap competition, she offers a prescription for growth and vigor. In particular she notes that, although foreign-born workers accounted for nearly half the gain in U.S. employment from January 2021 through May 2023, “employment among prime-aged U.S.-born workers also soared during this period.”

Unemployment has been historically low, she adds, and difficulty of finding good workers will increase if the pool of working-age people shrinks.

The domestic trend lines aren’t good, for two big reasons. The declining birthrate is one. The other is Baby Boomers are both living longer and aging out of the work force. Anyone who imagines that a shrinking population is pleasant should spend some time in Japan and Italy. As these countries are finding, decline means fewer people to produce goods and services, as well as less innovation. Even China’s Communists now admit that owing to their pursuit of a one- child policy, they now face, as Milton Friedman predicted, a huge worker shortage that will challenge economic growth.

So far the U.S. has been able to compensate via immigration, which was “the sole source of growth in the U.S. working-age population in 2021 and 2022,” Ms. Zavodny says. But this isn’t guaranteed. She suggests a future of competition among countries hit by the double whammy of a declining birth rate and aging society. Canada recently rolled out a new work permit to lure away foreigners in the U.S. on high-skill H-1B visas. The target of 10,000 applicants was met in two days.

Amid Donald Trump’s talk about a wall and Joe Biden’s chaos at the southern border, it’s hard to imagine any solutions from Congress before 2025. But Ms. Zavodny identifies labor-force trends that will have damaging consequences if they aren’t addressed. Someone needs to make the case that admitting foreign workers is good for Americans."

The Biden Administration’s Assault on Free Speech

Emails paint a picture of a White House running roughshod over First Amendment protections

By Philip Hamburger and Jenin Younes. Mr. Hamburger teaches at Columbia and is CEO of the New Civil Liberties Alliance, which represents plaintiffs in Missouri v. Biden and Changizi v. HHS. Ms. Younes led the litigation in those cases for NCLA and more recently served as senior special counsel on the Weaponization Subcommittee. Excerpts:

"government officials pressured social-media companies to censor posts unfavorable to the Biden administration. The White House has denied this, insisting that companies like Meta and Twitter adopted content-moderation policies on their own. But internal documents newly released by the House Judiciary Select Subcommittee on Weaponization of the Federal Government prove that government pressure led Meta to go beyond what it otherwise would have in censoring user speech."

"the White House strong-armed platforms into more censorship than they considered justified—prompting the judge to declare that the administration had made “arguably the most massive attack against free speech in United States’ history.” The new documents go further, showing that the administration drove much of Meta’s censorship. 

In April 2021, Facebook (now Meta) executive Nick Clegg wrote to the company’s leaders, Mark Zuckerberg and Sheryl Sandberg: “We are facing continued pressure from external stakeholders, including the White House and the press, to remove more COVID-19 vaccine discouraging content” (emphasis in original). Mr. Clegg recounted a conversation he had with Andy Slavitt, then White House senior adviser for the Covid response. Mr. Clegg wrote that Mr. Slavitt was “outraged” that Facebook hadn’t taken down a meme, which joked that 10 years from now trial-lawyer commercials would be soliciting the vaccinated to seek damages. When Mr. Clegg protested that the administration was making “a significant incursion into traditional boundaries of free expression,” Mr. Slavitt (according to Mr. Clegg) dismissed such First Amendment concerns on the ground that the objectionable meme “inhibits confidence in Covid vaccines.” This prompted Mr. Clegg to comment to his colleagues that “given what is at stake here,” the company should “regroup to take stock of where we are in our relations with the WH, and our internal methods too.”

Meta acquiesced to the administration’s pressure. An internal Aug. 2, 2021, email from a Facebook employee on the Trust and Safety Team noted: “Leadership asked Misinfo Policy and a couple of teams on Product Policy to brainstorm some additional policy levers we can pull to be more aggressive against Covid and vaccine misinformation. This is stemming from the continued criticism of our approach from the US administration and a desire to kick the tires further internally on creative options.”"

"the company increased its censorship under administration pressure. After discussing “our response to the Surgeon General on COVID-19 misinformation,” another employee on the Trust and Safety team wrote, “we agreed to further explore four discreet policy options for reducing the prevalence of COVID-19 misinformation on our platforms.” Those policies targeted 12 individuals known as the “Disinformation Dozen” and were implemented on the platform shortly after the Aug. 2 email, resulting in removal of these accounts and many others.

At the government’s behest, Facebook also adopted a policy of removing posts discussing the lab-leak theory."

"Supreme Court doctrine makes clear that government can’t constitutionally evade the amendment by working through private companies."

"If the appellate courts fail to recognize the spurious nature of the government’s position, the First Amendment might as well be a dead letter."

"Our government has established a vast system of censorship. By keeping it largely secret, it has been able to exert unconstitutional control over medical, scientific and political speech, suppressing debate over questions of great public importance."

Facebook Bowed to White House Pressure, Removed Covid Posts

Internal Meta emails say pressure from Washington was behind a decision to take down posts attributing pandemic to man-made virus

By Ryan Tracy of The WSJ. Excerpts:

"Facebook removed content related to Covid-19 in response to pressure from the Biden administration, including posts claiming the virus was man-made, according to internal company communications viewed by The Wall Street Journal.

The emails show Facebook executives discussing how they managed users’ posts about the origins of a pandemic that the administration was seeking to control. “Can someone quickly remind me why we were removing—rather than demoting/labeling—claims that Covid is man made,” asked Nick Clegg, the company’s president of global affairs, in a July 2021 email to colleagues. 

“We were under pressure from the administration and others to do more,” responded a Facebook vice president in charge of content policy, speaking of the Biden administration. “We shouldn’t have done it.”"

"The emails viewed by the Journal, which haven’t been previously reported, date to the spring and summer of 2021, when the White House was mounting a nationwide push for Americans to get vaccinated for Covid-19. Part of that push included a public and private campaign to get Facebook to more aggressively police vaccine-related content.

Administration officials had come to believe that many Americans were hesitant to get vaccines because of false information they saw on Facebook. “They’re killing people,” President Biden said that July. 

The tongue-lashing caused Facebook to re-evaluate its policies about Covid-19 content—discussions that involved high-level company officials including Clegg and then-Chief Operating Officer Sheryl Sandberg, the emails viewed by the Journal show. 

Following the president’s “killing people” comment, the Facebook vice president circulated a memo assessing the difference between Facebook’s content policies and the Biden administration’s demands—some of which the company appeared ready to push back on. 

“There is likely a significant gap between what the WH would like us to remove and what we are comfortable removing,” the Facebook vice president said.   

As one example, the executive listed the White House’s desire that the company take action against humorous or satirical content that suggested the vaccines aren’t safe. 

“The WH has previously indicated that it thinks humor should be removed if it is premised on the vaccine having side effects, so we expect it would similarly want to see humor about vaccine hesitancy removed,” the vice president wrote."

"In some of the emails, Facebook executives expressed concern that removing posts in which Americans expressed hesitation about getting vaccinated could actually make them less likely to get a shot.

“There may be risk of pushing them further toward hesitancy by suppressing their speech and making them feel marginalized by large institutions,” said one draft memo to Facebook leadership, included in an April 2021 email. Removing such posts could also fuel conspiracy theories about a coverup related to the safety of vaccines, the draft memo said. 

At the same time, Facebook officials appeared to feel pressure to address the White House’s concerns. As Clegg prepared to meet the U.S. surgeon general about vaccine misinformation in late July 2021, he emailed colleagues: “My sense is that our current course—in effect explaining ourselves more fully, but not shifting on where we draw the lines…is a recipe for protracted and increasing acrimony.” 

“Given the bigger fish we have to fry with the Administration—data flows etc—that doesn’t seem a great place for us to be, so grateful for any further creative thinking on how we can be responsive to their concerns,” he said.  

Facebook at the time was hoping to facilitate an agreement between U.S. and European officials allowing user data to flow across the Atlantic in compliance with privacy laws.  

By August 2021, Facebook executives were emailing each other about new planned changes to their Covid content policies. One change increased the punishments faced by users who ran afoul of content policies and had accounts on both Facebook and Instagram, another social-media platform owned by Meta, the emails show. 

For example, the company had previously removed the Instagram account of Robert F. Kennedy Jr., a vaccine skeptic now turned presidential candidate. But his Facebook account hadn’t faced the same punishment because it hadn’t posted the same content, the emails show.  

Under the new policy, Kennedy’s Facebook account wouldn’t be recommended to other users, a Facebook executive explained in an August email describing how the company was following up on the Biden administration’s requests."

Economic Liberty and Prosperity on Indian Reservations

From Dan Mitchell.

"The federal government screws up some big things (Social Security, health care, higher education, etc).

This video shows it also screws up on targeted issues.

The clear message is that the federal government has very bad policies that are hurting Native Americans.

It’s almost as if the system is designed to benefit bureaucrats rather than recipients (a very common problem with federal programs, unfortunately).

But not every problem is caused by Washington.

Here’s a chart from some new research by Thomas Stratmann of George Mason University. He created an index measuring the extent to which various reservations promote or hinder economic liberty.

As you can see, more economic liberty is correlated with higher levels of household income.

And here are some brief excerpts from his study.

This paper proposes a Reservation Economic Freedom Index for over 80 Indian reservations. …I document a positive association between reservations with a higher Reservation Economic Freedom Index and the prosperity of Indians, measured by the median Indian household income residing on reservations. Establishing an association between economic freedom and economic prosperity is a significant finding. …The REFI consists of components representing market freedoms and institutions that the academic economics and political science literature suggests hold promise to generate economic prosperity. …Also of interest for future research is an analysis of the effect of economic freedom on other socio-economic measures of well-being, such as poverty rates, income inequality, employment, financial investments on the reservation, and the likelihood of migration in or out of the reservation.

All things considered, I assume Washington’s policies do the most damage.

But it does not help when various tribes add to the burden of government.

P.S. The analysis of economic policy on Indian reservations is somewhat akin to the analysis of economic policy in nations that are part of the European Union. In both cases, there is not full control of economic policy (in the case of the E.U., nations have no control over trade policy and most of them have no control over monetary policy). But just like various Indian reservations can make things better or worse with the policies they control, various E.U. nations can make things better or worse with the policies they control (think Sweden vs Greece).

P.P.S. Washington’s policies are bad for Native Americans, but don’t hold your breath expecting the clowns in Washington to make things better."

Policymakers Won’t Cool It on Protectionism

By Gabriella Beaumont‐​Smith and Levi Latoz of Cato.

"A bipartisan group of Senators led by Senator Tammy Baldwin (D‑WI) introduced the Country‐​of‐​Origin Labeling (COOL) Online Act on May 3, 2023. Built on the pretext that American consumers want to purchase more “Made in America” goods, the proposed bill mandates that imported products “to be introduced, sold, advertised, or offered for sale in commerce on an internet website” are clearly and conspicuously marked with the country‐​of‐​origin. While this proposal may seem benign, this legislation will burden U.S. businesses, and ultimately consumers.

COOL laws are not new. Retailers are required to notify customers with country‐​of‐​origin labeling for certain foods. Supporters of this type of labeling argue that it helps inform consumers and falsely asserts that people are willing to pay more for this information. In reality, these laws are burdensome for producers and consumers. For example, the U.S. Department of Agriculture estimated that mandatory country‐​of‐​origin labeling for beef and pork products would cost over $9 billion over 10 years, and U.S. consumers’ purchasing power in the 10^th year would fall by $212 million. The COOL Online Act applies to a much broader range of goods than beef and pork products, so the imposed costs of this law would be much greater.

Further, COOL is a well understood non‐​tariff barrier and protectionist scheme. This bill likely would violate World Trade Organization (WTO) rules on non‐​tariff barriers, as it is not simple, transparent, or predictable, and would likely have restricting, distorting, or disruptive effects on trade. In 2015, the WTO affirmed Canada’s claims that U.S. COOL requirements violated WTO rules, resulting in $1 billion in retaliatory tariffs.

E‑commerce platforms host millions of small businesses and independent sellers whose products are sourced from all over the world, making it more difficult to ascertain origin. Requiring these platforms to track and comply with country‐​of‐​origin labeling for millions of products threatens to raise the cost experienced by both businesses and consumers. Information about origin can more easily be included by retailers or sellers in their product descriptions and advertisements on the platform. In fact, since 2021, Amazon has required sellers to provide country‐​of‐​origin information.

Determining the country of origin is an extremely complex issue and is reliant on clear definitions traditionally established in trade laws enforced by the United States Customs and Border Protection (CBP). However, enforcement of the proposed COOL Online Act would be a far more complicated process, particularly as the bill proposes providing broad discretion to the Federal Trade Commission (FTC). While the bill includes a memorandum of understanding provision between CBP and the FTC, inserting the FTC at all seems unnecessary and likely to cause confusion in the implementation and enforcement of the law, if passed.

COOL Online risks shrinking the impact that e‑commerce platforms can have in supporting the growth of businesses that use their services, ultimately harming U.S. workers, business owners, and consumers. This policy not only threatens to significantly raise the costs for businesses utilizing e‑commerce platforms, just as it raised costs for producers, packers, and retailers for certain food products subject to mandatory COOL, but also potentially leaves U.S. businesses vulnerable to retaliatory tariffs imposed by trading partners.

As this bill is considered, it raises the question whether such labeling actually promotes the best interest of American businesses and consumers. While some Americans may prefer buying American‐​made products and some say they are willing to pay a premium of approximately 11 cents for “Made in America” products, origin is not important to everyone. If consumers truly demand origin labeling, businesses will be incentivized to provide it in a bid to increase sales. There is no good reason for Congress to intervene and impose costs on businesses for information that can be provided as consumers, not policymakers, demand."

The Anti-Money Laundering Fraud

From Alex Tabarrok.

"Anti-money laundering laws are hugely expensive and largely ineffective at their stated purpose.

Necessarily applying a broad brush, the current anti-money laundering policy prescription helps authorities intercept about $3 billion of an estimated $3 trillion in criminal funds generated annually (0.1 percent success rate), and costs banks and other businesses more than $300 billion in compliance costs, more than a hundred times the amounts recovered from criminals.

… If authorities recover around $3 billion per annum from criminals, whilst imposing compliance costs of $300 billion and penalizing businesses another $8 billion a year, it is reasonable to ask if the real target of anti-money laundering laws is legitimate enterprises rather than criminal enterprises.

That’s Ronald Pol from a new paper, Anti-money laundering: The world’s least effective policy experiment? Together, we can fix it.

I would add two elements. The anti-money laundering laws are also injurious to innovation in areas like cryptocurrency where privacy is a goal and there is no bank to fine or from which to demand paperwork. These laws are also a injurious to liberty as they essentially require banks to spy on their customers and report to the government and they are inconsistent with constitutional principles. The key AML laws really only date from the 1990s and should be scrapped rather than “fixed “(which I think is Pol being sly as he never suggests any real solutions.)"

Industrial Policy Isn't About Jobs

By Veronique de Rugy.

"One of the most common refrains from politicians of both parties who want to justify their new programs or higher spending is that it will create jobs. Then there are those who argue that the goal of industrial policy is the creation of “good jobs.” I wish they would stop so we could have a conversation about what industrial policy is about and whether it is the best way to achieve whatever goal it is supposed to achieve.

With that in mind, I thought these comments from Noah Smith and Larry Summers were interesting.

During a Good Fellows podcast a few months ago, Larry Summers made a comment  that is worth keeping in mind (The whole discussion is very good and worth listening to).

Look, I think this is something we need to think very hard about. I believe that the best generals are the ones who hate wars most, and I believe the best industrial policy experts are the ones who hate it most. The problem is that the only people who talk about industrial policy are the ones who love it and are looking for a reason to do it. Anyone who can […] talk for five minutes about why we need industrial strategy or resilience without saying the words “it will create US jobs” I have substantial time for but whenever it comes with a whole set of talk about US jobs then it becomes much more problematic.

What Summers is getting at is that industrial policy should be about using the government to achieve what arguably can’t be achieved through market forces. National security is one of those things. But national security will be best promoted if the goal is, well, national security. It will not be effectively promoted if it is used as a Trojan horse for achieving goals – such as job creation – other than national security. As soon as you start talking about job creation, you get distracted from what you claim you are trying to achieve.

Noah Smith also suggests that the first goal of industrial policy isn’t and shouldn’t be job creation. He writes that industrial policy’s goal is climate strategy in the case of the Inflation Reduction Act,  and national security (among other things) in the case of the Chips Act. He also believes that that industrial policy as implemented in these two bills could and will lead to a manufacturing boom. However, he explains that even if the manufacturing boom happens, we should not expect a job boom too. Here’s Smith:

So far, the critics of industrial policy tend to spend a lot of their time rebutting the notion that we can bring back the golden age of widespread “good jobs” in factories….

And they’re right. Industrial policy will not turn us back into a nation of factory workers. Every country in the world, including China, sees its share of manufacturing employment fall as it becomes rich — both because consumers start demanding more services as they get richer, and because rich countries can only stay competitive in manufacturing by using lots of automation.

If we do manage to engineer a manufacturing boom, most of the actual production work will be done by robots, because we are a rich country with very high labor costs and lots of abundant capital and technology. Automated manufacturing is what we specialize in, not labor-intensive manufacturing. The latter is for countries like India and Tanzania. America needs to build with robots

This is an important point overlooked by industrial policy fangirls on the right and the left. I would add another point. Industrial policy is meant to reallocate resources in different directions than what profit-motivated actors and market forces would achieve (translation in practice: produce less output using more resources). That doesn’t add up with the belief that “incentivizing” those who invest their money to do something they wouldn’t do without specially created government privileges (such as protective tariffs, tax credits, loans and subsidies) somehow will end up creating growth and jobs.

Smith does correctly note that industrial policy could create some particular jobs in the subsidized industries. As he explains, labor is needed to build factories, which when operating require workers. That said, we should also account for the fact that subsidies given to some industries necessarily shift resources – capital and labor – away from other, nonsubsidized industries. For instance, Dean Baker once explained the unfairness of the ExIm Bank noting—“by diverting capital to the winners picked by the Ex‐​Im Bank, we are raising the price of capital for other firms.” If I believed that the government has a way to identify profitable ventures better than market actors, I could buy that on net we would be better off. But I don’t harbor such a belief.

I have to say, though, that I am more skeptical than Smith that industrial policy will create a sustainable manufacturing boom. In part it is because the government forced reallocation of resources once again means producing less output using more resources. Either the government incentives are incentivizing companies to do something they believed wasn’t in their interest before or the government payouts are going to companies to do things they would have done anyway. Neither is the best use of resources. I have found those two things to be true, no matter what government favoritism programs I have studied in the past.

Talking about companies now getting subsidies for something they would have done absent the subsidies, I found this interesting. In a recent paper by Réka Juhász, Nathan Lane, Emily Oehlsen, and Verónica Pérez found that industrial policy “is highly correlated with an industry’s revealed comparative advantage.” Translation: The market discovers ‘winners,’ and then politicians encourage them to expand inefficiently and – more and more – also saddles these firms with politically fashionable strings such as childcare and Buy American requirements.

Free-market advocates recognize that exceptions exist to a policy of free trade or the unhindered functioning of the market. National security is the main one that comes to mind. But it must be a real national-security reason, not a fabricated one like the Trump steel tariffs. We also recognize that if real market failures exist, and persist over time, they could justify government interventions. In this case too we must be clear about what market failure means. It certainly doesn’t mean more than merely that the outcome produced by the market happens to be permanently different than what a few people believe should be the appropriate outcome.

The most important thing, however, is that government interventions that disrupt market allocations almost always means less efficiency (recessions are a different situation). These costs (which include future taxes and distorted capital markets) might be justified if industrial policy is to address a real national-security threat or some other genuine problem that we deem incredibly important. But if so, stop claiming that the goal is job creation."

The new merger guidelines subvert the rule of law

From Alex Tabarrok.

"Gus Hurwitz (a former student) and Geoffrey Manne have an excellent piece in the WSJ discussing the FTCs new merger guidelines. First, what are these guidelines?

Since 1968, Justice and the FTC have issued guidelines to help companies understand when a proposed merger might raise antitrust concerns. The guidelines are a nonbinding public statement that describes how the agencies will approach the enforcement of merger laws. They have been updated from time to time to reflect changes in the law and improved economic understanding about the likely effect mergers will have on competition. They are neither a definitive statement of law nor binding on courts.

Over time the guidelines have nevertheless shaped U.S. courts’ understanding of merger law because past updates have striven to state what the law, as applied by courts, is, and have developed analytical tools faithful to that interpretation.

The new guidelines, however, are very different as they attempt not to summarize the law but to create new policy in the absence of legislation from Congress or rulings by the courts, in other words to subvert the rule of law.

…the proposal states what the agencies’ current leadership wishes the law to be and reflects a desire to change merger law by administrative fiat rather than through successful litigation or an act of Congress. Look at the antitrust agencies’ string of recent losses in major merger cases, including Microsoft’s acquisition of Activision and Meta’s acquisition of Within, to see that their views of antitrust law differ substantially from those of the courts.

Judicial acceptance of prior guidelines was a result of the agencies’ reputation as honest brokers of judicial precedent. The proposed guidelines jeopardize that reputation by selectively interpreting the law, relying on outdated precedents, and disregarding more-recent case law.

…This selective bias toward outdated judicial opinions and economic knowledge isn’t likely to impress the courts. The disconnect will lead to deep skepticism, casting a pall over all arguments (even sound ones) made by the Justice Department and FTC antitrust attorneys. The agencies might discover that it would have been better to go to court without guidelines rather than with a contentious interpretation of the law."

The Real DeSantis Covid Record

Trump and the left are distorting Florida’s superior pandemic performance on public health and limiting harm from lockdowns 

WSJ editorial.

"Progressives want Donald Trump to win the GOP nomination, which explains why they’re distorting Ron DeSantis’s Covid record. The press knows the Florida Governor’s opposition to lockdowns is a political selling point, so in Trumpian fashion they are rewriting history.

Democrats have never forgiven Mr. DeSantis for defying the lockdown consensus and reopening his state in spring 2020. Americans can recall—though would probably rather forget—how the Trump Administration extended its “15 days to slow the spread” again and again.

Mr. DeSantis and some other GOP Governors, notably Brian Kemp in Georgia and South Dakota’s Kristi Noem, broke ranks in early May by easing virus restrictions. Democrats denounced Mr. DeSantis for “letting it rip,” but he reopened the state in phases and took into account the healthcare system’s capacity to treat sick patients.

On May 4 restaurants and retail stores were allowed to open at 25% of capacity. Two weeks later Mr. DeSantis announced that theme parks, including Disney World, could submit plans to reopen as early as June if they could keep patrons safe. In June Mr. DeSantis gradually eased other restrictions.

That summer Covid swept Florida and southern states that had largely dodged a first wave in the spring. But Mr. DeSantis, having examined the data and consulted scientists such as Stanford University’s Jay Bhattacharya, refused to shut down businesses. Instead he focused on protecting the elderly who faced immensely higher risk.

Seniors over the age of 75 years were hundreds of times more likely to die of Covid than young adults. And lockdowns disproportionately harmed young people who were more likely to die of drug overdoses than Covid. The public-health clerisy focused narrowly on virus risks, ignoring the social, economic and psychological damage from lockdowns.

Not least of these was learning loss from school closures, which may never be made up. Mr. DeSantis was among the few Governors to reopen schools for in-person learning in autumn 2020 despite opposition from the teachers’ unions. His reopening mitigated learning loss and helped parents return to work.

Mr. DeSantis’s strategy of focused protection was articulated in the Great Barrington Declaration, which progressives still revile despite its vindication. In 2020 Florida had the tenth lowest age-adjusted Covid death rate in the country, which was nearly 20% lower than California’s despite the Golden State’s prolonged lockdown.

Progressives are implicitly conceding Mr. DeSantis’s strategy of focused protection succeeded by attacking him now for allegedly equivocating on vaccines. The smear is that the Governor at first backed Covid vaccines for seniors, but then declined to mandate the shots. He also didn’t hector young people to get them.

This ignores that many young people already had natural immunity, which is more protective than vaccines. Vaccines can also cause myocarditis in young men, which the Centers for Disease Control and Prevention was slow to acknowledge. It also became clear by summer 2021 that vaccines provided only transitory protection against infection.

News stories attribute Florida’s higher death rate during the summer 2021 Delta wave to Mr. DeSantis’s refusal to embrace vaccine mandates. But they leave out that Florida also suffered a much smaller Covid wave in the previous winter than most states. As we’ve learned, infections build population-level protection that extends many months.

Florida experienced a lower Covid death rate than most states in late 2021 and early 2022. The press likes to cherry-pick data and focus on discrete periods to present Mr. DeSantis as a grim-reaper. But Florida’s overall age-adjusted Covid death rate during the pandemic is 13% lower than the U.S. average and about the same as California’s.

Florida’s vaccination rate among seniors is 94.4%, similar to most Democratic-run states. About 79.6% of Floridians age 18 and over have received two doses, which is higher than most states, including many with Democratic Governors such as Michigan (71.6%), North Carolina (77.1%), and Wisconsin (77.7%).

Progressives and Mr. Trump also won’t concede that Mr. DeSantis’s Covid strategy proved to be an economic boon. Between April 2020 and July 2022, 622,476 people moved to Florida from other states, including families who wanted children in school. Employment in Florida has grown by 7.4% since January 2020 versus 2.5% in California and a 1.2% decline in New York.

The lockdown damage continues, but progressives can’t admit they were wrong. Nor can Mr. Trump. So they are trying to take down Mr. DeSantis for being right."

The Costs of Prevailing Wage: Evidence From State Road Construction Spending

By Dr. Michael J. Hicks.

"In this report, Ball State University economist Michael Hicks examines the impact of prevailing wage laws across the country on the cost per quality-adjusted mile of road construction from 2004 to 2019. He also reviews the impact of these laws on the labor share of road construction costs. Hicks relies on data from the Federal Highway Administration, the Bureau of Economic Analysis and the Bureau of Transportation Statistics.

His research demonstrates that prevailing wage laws increase the cost of road construction by 8.5% to 14.3%, in line with previous Mackinac Center estimates and other scholarship. These results are both economically and statistically significant.

Contents

• Executive Summary
• Introduction
• Modeling Prevailing Wage Legislation Effects
• Literature Review
• Model and Data
• Estimation Results
• Summary and Conclusions
• Endnotes"

Drug Reformation: End Government’s Power to Require Prescriptions

Government‐​imposed prescription requirements violate the rights of individuals to access the medicines they want. Evidence suggests that government‐​imposed prescription requirements make patients less safe, not more.

See By Jeffrey A. Singer and Michael F. Cannon of Cato. Excerpt:

"Executive Summary

U. S. law grants the Food and Drug Administration the power to make consumers get a prescription before purchasing certain drugs. The rationale behind government‐​imposed prescription requirements is consumer safety—that is, the idea that some drugs are too dangerous for consumers to use without physician supervision.

Research shows, however, that government routinely requires prescriptions for drugs that are safe for consumers to use on their own. For years, Food and Drug Administration (FDA) prescription requirements steered consumers away from safer nonsedating antihistamines toward more dangerous sedating antihistamines. More recently and for political reasons, Presidents George W. Bush and Barack Obama collectively blocked access to “Plan B” emergency contraception for more than 12 years. The FDA continues to force consumers to endure unnecessary and costly visits to their doctors before obtaining routine‐​use oral contraceptives and life‐​saving drugs such as naloxone.

Government‐​imposed prescription requirements violate the rights of individuals to access the medicines they want. Vesting this power in government has left Americans with less access to medicines overall—even relative to consumers in other nations where governments also impose prescription requirements. It imposes unnecessary costs that rise during public health crises such as the COVID-19 pandemic. Evidence also suggests that government‐​imposed prescription requirements make patients less safe, not more.

Congress should deny the FDA any power to impose prescription requirements. Doing so would not end prescription requirements. The threat of tort liability would push pharmaceutical manufacturers to require authorization from a physician or other competent medical professional before consumers could purchase unusually dangerous drugs. Even without a statutory requirement, consumers would continue to consult health care professionals before accessing certain drugs when they see the need for expert advice. Drug manufacturers, pharmacies, and their liability insurers could develop innovative means of tailoring drug access to the risks that individual drugs pose.

Denying government the power to require prescriptions would expand drug access by reducing both drug prices and the associated nonprice costs of obtaining needed drugs. The evidence suggests that eliminating government‐​imposed prescription requirements would lead to more‐​judicious use of pharmaceuticals because consumers make more‐​cautious drug decisions when the choice is theirs rather than when government forces them to consult physicians. Denying the FDA this power would help ensure access to beneficial medicines during the COVID-19 pandemic and subsequent public health crises."

Clean Air Act Regulations Make it Harder to Conduct Forest Restoration

 By James Priest of PERC.

"A public comment submitted to the Environmental Protection Agency on its proposal to lower the National Ambient Air Quality Standards for particulate matter.

Main Points

• Prescribed fire is a critical tool for tackling the biggest source of particulate matter—wildfire smoke
• The disparate treatment given wildfire smoke and prescribed fire smoke makes it more difficult to reduce particulate matter pollution
• EPA’s proposal to lower the particulate matter standard without first fixing barriers to prescribed fire could worsen air quality and extend the wildfire crisis

Introduction

While reducing PM2.5 would benefit public health, simply lowering the standard may not translate into actual reductions. The western United States is in the midst of a wildfire crisis that threatens communities, watersheds, forest ecosystems, and air quality, Indeed, smoke from catastrophic wildfires is already the most significant source of PM2.5 and is likely to continue growing.

Lowering the standard will do nothing to address this problem because wildfire smoke is routinely excluded from this standard as an “exceptional event.” It will, however, penalize one of our most effective tools for tackling the wildfire crisis and reducing wildfire smoke—prescribed fire.

Despite being less harmful, the smoke from prescribed fire counts against the standard. PERC urges EPA to address this imbalance before lowering the standard. Doing so is necessary to help federal agencies, states, tribes, and private parties restore “good fire” at the scale needed to fix America’s forests.

READ THE PUBLIC COMMENT"

 

Tin-Foil Logic for Tin-Mill Tariffs

Will Commerce Secretary Gina Raimondo punish all Americans to help Ohio Sen. Sherrod Brown? 

WSJ editorial. Excerpts:

"Cleveland-Cliffs and the USW in January petitioned the Commerce Department and the U.S. International Trade Commission (ITC) to impose duties between 13.5% and 294.3% on imported tin-mill steel from eight countries. They claim foreign manufacturers are “dumping” steel used in canned goods on the U.S. market at less than the “fair value” price.

This is nonsense, and they know it. U.S. can manufacturers rely on imported tin-mill for 62% of their supply owing to a lack of domestic alternatives. Cleveland-Cliffs and U.S. Steel are the only two significant domestic manufacturers, but they can’t produce the high-grade tin-mill that can and food manufacturers require these days.

Rather than invest in specialized tin-mill, U.S. steel manufacturers such as Cleveland-Cliffs have prioritized making steel with higher margins. As a result, domestic tin-mill production capacity is expected to be about 45% lower by the end of this year than in 2017, the year before the Trump Administration’s steel tariffs took effect.

Tin-mill accounts for 2% of Cleveland-Cliffs’s steel sales volume. Were the Administration to slap steep tariffs on imports, domestic production wouldn’t come close to meeting demand. Prices would invariably rise, which would increase Cleveland-Cliffs’s margins. But higher prices would make U.S. can and food manufacturers less competitive."

"new duties would cost up to 39,780 downstream jobs while potentially creating a mere 66 new ones in tin-mill production."

"canned-food prices would increase by 19% to 30%. Canned vegetable prices in the U.S. have risen by nearly 30% since the start of the pandemic owing to higher energy and tin-mill steel prices."

Government has played a role in patients losing their limbs

See They Lost Their Legs. Doctors and Health Care Giants Profited. by Katie Thomas, Jessica Silver-Greenberg and Robert Gebeloff of The NY Times. Excerpts:

"The volume of these vascular procedures has been surging. The use of atherectomies, in particular, has soared — by one measure, more than doubling in the past decade, according to a Times analysis of Medicare payment data.

There are two reasons. First, the government changed how it pays doctors for these procedures. In 2008, Medicare created incentives for doctors to perform all sorts of procedures outside of hospitals, part of an effort to curb medical costs. A few years later, it began paying doctors for outpatient atherectomies, transforming the procedure into a surefire moneymaker. Doctors rushed to capitalize on the opportunity by opening their own outpatient clinics, where by 2021 they were billing $10,000 or more per atherectomy."

"Medicare’s decision to reimburse doctors for procedures performed outside hospitals led to a proliferation of outpatient clinics specializing in everything from orthopedics to dermatology.

The policy also motivated doctors to perform more procedures, in part because private insurers tend to follow the federal agency’s lead. Before, doctors working in a hospital pocketed only a slice of what insurers paid, with the hospital getting the rest to cover overhead costs. Doctors who owned clinics could now collect the entire payment.

A decade ago, there were virtually no clinics to treat peripheral artery disease. Today, there are about 800, according to an industry trade group."

"The turning point came in 2011, when Medicare began paying for outpatient atherectomies. That year, Medicare reimbursed doctors $86 million for the procedures, according to the Times analysis of Medicare data. By 2021, the most recent year for which data is available, the figure was $612 million."

Hottest Days Ever? Don’t Believe It

‘Average global temperature’ is a meaningless measure, and comparisons to 125,000 years ago are preposterous.

By Steve Milloy.

"The global-warming industry has declared that July 3 and 4 were the two hottest days on Earth on record. The reported average global temperature on those days was 62.6 degrees Fahrenheit, supposedly the hottest in 125,000 years. The claimed temperature was derived from the University of Maine’s Climate Reanalyzer, which relies on a mix of satellite temperature data and computer-model guesstimation to calculate estimates of temperature.

One obvious problem with the updated narrative is that there are no satellite data from 125,000 years ago. Calculated estimates of current temperatures can’t be fairly compared with guesses of global temperature from thousands of years ago.

A more likely alternative to the 62.6-degree estimate is something around 57.5 degrees. The latter is an average of actual surface temperature measurements taken around the world and processed on a minute-by-minute basis by a website called temperature.global. The numbers have been steady this year, with no spike in July.

Moreover, the notion of “average global temperature” is meaningless. Average global temperature is a concept invented by and for the global-warming hypothesis. It is more a political concept than a scientific one. The Earth and its atmosphere is large and diverse, and no place is meaningfully average.

Average global temperature also changes on seasonal basis: Temperatures are higher globally during the Northern Hemisphere’s summer because of more sunlight-trapping land. In this case, the Climate Reanalyzer’s estimated temperatures in early July were skewed by a heat wave in the Antarctic, where areas may have warmed some Antarctic temperatures by as much as 43 degrees. This is likely the explanation for the difference between the 62.6-degree and 57.5-degree estimates.

Another problem is that our temperature data are imprecise. It has been estimated that 96% of U.S. temperature stations produce corrupted data. About 92% of them reportedly have a margin of error of a full degree Celsius, or nearly 2 degrees Fahrenheit. The lack of precision of reported temperatures, whether estimated or measured, is not reassuring.

Temperature stations also tend to be limited to populated areas. Much of the Earth’s surface isn’t measured at all. Although the National Oceanic and Atmospheric Administration likes to present global temperatures starting in 1880, regular temperature collection in places such as the north and south poles began much later.

It isn’t plausible to characterize Earth’s warming in a single average number, especially when we don’t really know what that number is today, much less from 125,000 years ago.

Mr. Milloy is a senior legal fellow at the Energy and Environment Legal Institute."

The AI Panic is Insane

Both arrows and cars can get out of hand, and make us go extinct

By Deirdre N. McCloskey.

"Maybe not in Brazil, but in the USA we are going insane about artificial intelligence. Our Congress might act to regulate, which is always a worrying sign of a panic attack.

Artificial intelligence is the ability of a computer with root to do things commonly associated with intelligent beings, such as us. The science fiction is that AI will take us over. Hundreds of technology leaders signed a letter recently declaring that "Mitigating the risk of extinction from AI should be a global priority alongside other societal scale risks such as pandemics and nuclear war."

Such panic is insane.

Doing things commonly associated with intelligent beings, after all, is what human culture has done from top to bottom since the beginning. The philosopher Alfred North Whitehead remarked in 1911 that " Civilization advances by extending the number of important operations which we can perform without thinking of them." Correct.

The bow and arrow, for example, is a "computer with robot" for throwing a little spear called an arrow without thinking much. It takes over part of the aiming that a human would commonly do throwing a spear. The earliest punched-card computers in Belgium for making rugs were computer-controlled robots making it unnecessary for human to think about what color of weft to cast through the warp. All physical tools do jobs commonly associated with humans. The mechanisms for, say, driving are such computers.

You might argue, correctly, that both arrows and cars, though presumably not rugs, can get out of hand, and make us go extinct. But that of course is true for many novelties—say, the atomic bombs that the terrified tech leaders were referring to. Or war ships using wind to make thoughtful rowing unnecessary, and bloody naval war easier.

And think beyond physical tools. Brazilian music, cuisine, economy evolve unpredictably, for better or worse. The Portuguese language is a non-physical tool, of human manufacturer though not of human design. The old humanist joke is, "Do we speak the language... or does the language speak us?"

Language is in fact probably the most dangerous artificial intelligence machine ever. For example, technology leaders can use scary language to drive us insane.

Bring in state regulation of language, eh? No."

Biden’s Short-Sighted New Health Rule

The Administration is taking away cheaper insurance options from consumers to jam everyone into the ObamaCare exchanges.

WSJ editorial.

"Here’s a definition of Bidenomics you won’t hear from the White House: Forcing Americans to buy expensive products they don’t want or need. Behold the President’s plan to limit short-term health insurance plans in order to jam more consumers into the heavily subsidized and regulated ObamaCare exchanges.

The Health and Human Services, Labor and Treasury Departments on Friday proposed rules to roll back the Trump Administration’s expansion of short-term, limited-duration insurance (STLDI) plans. Since 2018 these plans have been available in 12-month increments, and consumers have been able to renew them for up to 36 months.

Short-term plans aren’t required to provide comprehensive benefits, including pediatric services, maternity care and mental health treatment. They are thus much cheaper than the heavily-regulated plans on the ObamaCare exchanges, which must provide 10 “essential” benefits and are restricted in their ability to charge premiums based on age and risk.

These plans are especially attractive to young people whose employers don’t provide coverage. Why would a healthy 26-year-old want to pay for maternity, pediatric and other services he probably won’t use in the near future? Instead, he could use the thousands of dollars in savings from enrolling in short-term plans to repay student loans.

President Biden raps short-term plans as “junk insurance,” but Democrats call anything they want to eliminate “junk.” They don’t like the plans simply because they lure healthy, young people away from the ObamaCare exchanges, which results in older and sicker insurance risk pools that increase premiums and subsidy costs.

The Inflation Reduction Act sweetened ObamaCare’s insurance premium tax credits that are tied to income. As a result, a 60-year-old making just above four times the poverty level ($58,320) has to pay only 8.5% of his income toward his insurance premium while the government picks up the rest. If premiums increase, government is on the hook for more.

But after the Inflation Reduction Act’s enhanced subsidies expire in 2025, consumers will be in for sticker-shock. Hence, the Administration is trying to drive more young, healthy people back into the exchanges by reinstating a four-month cap on short-term plans and prohibiting renewals. Presto: A free market for insurance that competes with the ObamaCare exchanges disappears.

Some states have experimented with restricting short-term plans, but a 2021 study by the Galen Institute found this didn’t reduce full-coverage premiums. For many young people, the ObamaCare plans even with subsidies aren’t worth the cost. So prepare for an increase in the number of uninsured after the rule takes effect.

The Biden rule may also draw a legal challenge. The Cato Institute’s Michael Cannon notes that the proposal conflicts with a 2020 ruling by the D.C. Circuit Court of Appeals that “nothing in [federal law] prevents insurers from renewing expired STLDI policies.” Once again, the Administration is rewriting law by regulatory decree.

As with his backdoor ban on gas-powered cars, President Biden is limiting health insurance choice and competition in the name of protecting consumers from something they want to buy."

Covid Censorship Proved to Be Deadly

Government and social-media companies colluded to stifle dissenters who turned out to be right.

By Bret Swanson. Excerpts:

"Elon Musk’s release of some of Twitter’s internal files revealed that up to 80 Federal Bureau of Investigation agents were embedded with social-media companies. The agents mostly weren’t fighting terrorism but flagging wrongthink by American citizens, including eminent scientists who suggested different paths on Covid policy.

The results of these relationships? Twitter blacklisted Stanford physician and economist Jay Bhattacharya for showing Covid almost exclusively threatened the elderly, severely reducing the visibility of his tweets. When Stanford health policy scholar Scott Atlas began advising the White House, YouTube erased his most prominent video opposing lockdowns. Twitter banned Robert Malone, a pioneer of mRNA vaccine technology, for calling attention to the vaccines’ dangers. YouTube demonetized evolutionary biologist Bret Weinstein, who suggested the virus might be engineered and predicted vaccine-evading variants. And those are only a few examples.

Social-media platforms were powerful tools for full-spectrum censorship, but they didn’t act alone. Medical schools, medical boards, science journals and legacy media sang from the same hymnal.

Legions of doctors stayed quiet after witnessing the demonization of their peers who challenged the Covid orthodoxy. A little censorship leads people to watch what they say. Millions of patients and citizens were deprived of important insights as a result.

Health authorities and TV doctors insisted young people were vulnerable, demanded toddlers wear masks, closed schools, beaches and parks, and were loath to contemplate crucial cost-benefit analysis. The economy? Mental health? Never heard of them.

These “experts” denied the protective effects of recovered immunity, a phenomenon we’ve known about since the Plague of Athens in 430 B.C. They effectively prohibited generic drugs approved by the Food and Drug Administration, such as azithromycin and ivermectin, which low-income nations around the world were deploying successfully. They failed to appreciate the evolutionary dynamics of mass vaccination during a pandemic.

The U.S. government spent $6 trillion to buoy its shuttered economy, and most people got Covid anyway. Worst of all, the lockdowns and mandates resulted in unprecedented bad health outcomes for young and middle-aged people in rich countries.

Excess mortality in most high-income nations was worse in 2021 and 2022 than in 2020, the initial pandemic year. Many poorer nations with less government control seemed to fare better. Sweden, which didn’t have a lockdown, performed better than nearly every other advanced nation.

After navigating 2020 with relative success, young and middle-age healthy people in rich nations began dying in unprecedented numbers in 2021 and 2022. Health authorities haven’t focused enough on this cataclysm of premature death from non-Covid heart attacks, strokes, pulmonary embolisms, kidney failure and cancer."

Harvard study suggests Ibram X. Kendi is wrong about racial progress

By Jack Elbaum of The Washington Examiner.

"The argument that America, and Americans, are irredeemably racist just took a significant blow.

Earlier this year, a working paper from Harvard Business School that was written by three scholars at the University of California, Berkeley, Harvard, and the University of Washington looked into the effect of Yelp making the "race of a set of Black business owners salient to customers" — in other words, labeling certain businesses as "black-owned." 

The results? They found that “this feature substantially increased demand for Black-owned businesses — in the form of more calls to the restaurant, more delivery orders, and — using cell phone data from a different platform — more in person visits to the restaurant.”

This is quite interesting, as I have been reliably informed by some of our leading voices on race that the United States is one of the most racist places in the world. Author of How to Be an Antiracist, Ibram X. Kendi, wrote that in all the research he has done, he has not seen a "singular historical force arriving at a postracial America” (as in, he does not believe there has been any racial progress). Not only that, but all whites are racist, too. As CNN wrote, “If you’re a white person in America, social justice educator [and bestselling author of White Fragility] Robin DiAngelo has a message for you: You’re a racist, pure and simple, and without a lifetime of conscious effort you always will be.” 

But if America was just as stubborn, and Americans were just as rotten to the core, as these supposed thought leaders suggest, then there is no reason to believe businesses would see any boost when the race of its owner was made public. In fact, for their theses to hold up, we would have to observe a significant drop in patronage. The owners of these businesses would be completely opposed to being labeled “black-owned” if they thought it would reduce sales. That this is not the case demonstrates the extent to which we have progressed, contrary to the claims of Kendi.

The point of discussing this study is not to suggest that we ought to expand the use of racial classifications of businesses on apps such as Yelp. Rather, it is solely to point out that the narrative of America as having made no progress over the past 400 years is simply wrong.

We continue to face a number of problems related to race and racism. There is no denying that. But that is by no means the whole story. The fact we have gone from a country with a widespread practice of slavery to one where 94% of people approve of marriages between white and black people is no small thing. For reference, in 1961, only 4% approved of such marriages. No progress? You have to be joking.

The shtick of Kendi, DiAngelo, and their fellow travelers has undoubtedly made them quite rich. But it has taught us very little that is actually valuable about the state of race in America."

Larry Summers says federal government is waging a ‘war on business’ by proposing tougher antitrust rules for acquisitions

By Ana Monteiro of Fortune and Bloomberg. Excerpts:

"Former Treasury Secretary Lawrence Summers warned that the Biden administration’s crackdown on mergers and acquisitions through a sweeping overhaul of rules the government uses to determine whether deals violate competition law “seems almost like a war on business.”

“These guidelines — by moving away from an emphasis on lower prices for consumers to broader abstractions — are a substantial risk,” Summers said on Bloomberg Television’s “Wall Street Week” with David Westin. “I wish that this stepping back and offering merger guidelines had been taken as an opportunity to rationalize the policy.”"

"“Right now, where I think where you’re moving away from low consumer prices as a standard, you’re mostly moving into problematic territory,” said Summers, a Harvard University professor and paid contributor to Bloomberg TV. “There’s been a lot of that in the last several years, and it sure seems like they’re pushing forward harder, rather than backing off.”"

CEI leads coalition opposing crazy regulatory crackdown on dishwashers

By Ben Lieberman.

"The American public remains angry over federal meddling in gas stoves – for good reason, given that not one but two Biden administration regulatory agencies continue to target them. Homeowners should be equally enraged over a host of other foolish assaults on appliances, all being done in the name of addressing climate change. On July 18, CEI submitted a coalition regulatory comment to the Department of Energy (DOE) regarding perhaps the worst of them: the proposed new restrictions on dishwashers.

Dishwashers may already be the single most overregulated appliance (though some would say washing machines deserve that dubious distinction), yet DOE now wants to again ratchet down the allowable levels of energy and water use. Bureaucrats have already done this four times. The proposed rule would be the fifth water restriction.

Previous limits have proven very annoying and inconvenient, most notably by increasing the time it takes to clean a load of dishes from about one hour in pre-standards models to two or more today. In the agency’s own words, “[t]o help compensate for the negative impact on cleaning performance associated with decreasing water use and water temperature, manufacturers will typically increase the cycle time.” The proposed rule would further exacerbate matters.

Cleaning performance has also suffered. Although not as well documented as the increased cycle times, many consumers complain about having to rinse dishes before or after running them in the dishwasher in order to get them sufficiently clean, or running the machine twice. Beyond the extra annoyance, having to rewash dishes undercuts the energy and water-savings rationale behind the rules.

Nor is there much upside to justify the downside of lousier dishwashers. After four rounds of successively more stringent energy and water use limits for dishwashers, there simply isn’t much more to be saved. By the agency’s own analysis, the proposed rule would save consumers $17 over the life of a standard dishwasher, which it estimates at 15.2 years. That works out to $1.12 per year. Against this miniscule benefit is the very real risk of greatly diminished performance and convenience for consumers.

The climate change benefits are even more laughable. According to estimates from Dr. Kevin Dayaratna of the Heritage Foundation, the agency’s estimated reductions in greenhouse gases from the rule would prevent 0.0003°C warming by 2050.

Instead of a making things worse by cranking out another round of restrictions, DOE should be looking for ways to fix the problems with existing dishwasher rules. In 2018, CEI petitioned DOE to do just that, and the Trump DOE granted the petition and began the process of devising a new standard achievable by one-hour dishwashers. Unfortunately, the Biden DOE shut down this effort, but 13 state attorneys general are fighting back by suing the agency in federal court. CEI joined FreedomWorks in submitting an amicus brief documenting both the longer cycle times and the consumer dissatisfaction with them.

Like so many bad regulations these days, the dishwasher rule as well as similar ones for furnaces, refrigerators, washing machines, room air conditioners, and of course stoves, are justified in part by hypothetical climate change benefits. In DOE’s words, micromanaging appliances is needed “to confront the global climate crisis.” Yet homeowners, not the planet, are likely to get hot when they learn what is being done to them."

The unintended consequences of nationalism

By Scott Sumner.

"Today’s Bloomberg has two stories that illustrate the unintended consequences of increasing nationalism in US policymaking.  Both relate to the chip industry, but look at different aspects of the problem.

During the Trump administration, the US cracked down on the immigration of skilled STEM workers from overseas.  Here’s one consequence of that decision:

Taiwan Semiconductor Manufacturing Co. cut its annual outlook for revenue and postponed the start of production at its signature Arizona project to 2025, twin setbacks for a chipmaking linchpin struggling with geopolitical tensions and a deep market slump.

TSMC’s surprise cut in 2023 revenue projections sent a warning to investors that the global electronics slump may persist for some time despite a boom in AI development. And the delay in the US — a consequence of both a lack of skilled American workers and ballooning costs — underscores the difficulties in making chips there despite Washington’s insistence to reduce a global reliance on Asian facilities.

I recently had some problems with my air conditioning system.  The technician told me that the unit is too big, and is trying to force too much air through a relatively narrow duct.  That’s basically the problem with programs combining massive subsidies for chip making with various restrictions on the domestic chip industry.

The Biden administration has enacted protectionist measures aimed at hurting China while boosting our chip industry.  An article by Dave Lee points to some unintended consequences:

One problem with US limits on non-US companies, notes Emily Kilcrease, senior fellow with the Center for a New American Security, is that international businesses now have an incentive to design out US components to avoid being subject to these rules.

Meanwhile, China has begun introducing small disruptions to the market. Citing “relatively serious” national security concerns over Micron, the Boise, Idaho-based memory chip maker, Beijing in May said the company’s components shouldn’t be used within vital infrastructure. Micron said the loss of business represented a “low-double-digit percentage” of overall global revenue. The ban benefits South Korean competitors Samsung and SK Hynix, who also make memory chips.

As a result, US companies may choose to move production elsewhere.  Unfortunately, a country that cuts itself off from the rest of the world can easily end up falling behind:

If they confront their worst-case scenario, in which their sales to China cease altogether, US chip companies could lose $83 billion annually, at a cost of 124,000 jobs, the US Chamber of Commerce estimates. R&D spending would fall by $12 billion per year. This can be mitigated by a diversified supply chain that shifts that business to other regions, but such transitions take time, and would open the door for empowered international competitors to increase their Chinese market share.

They could then use the fruits of that success to plow more resources into creating next-generation cutting-edge chips, weakening US leadership over these vital innovations.

There is also a risk that these actions further hurt the US if they lead China to retaliate by cutting off exports of key “rare earth” metals used in chip manufacture."