The Soviet men who controlled the country weren’t always so keen on encouraging or even maintaining radical egalitarianism

See The World’s Greatest Feminist Experiment Was Not Where You’d Think: In “Motherland,” the journalist Julia Ioffe charts the Russian campaign to emancipate women — and the country’s failure to live up to that promise by Jennifer Szalai. Excerpt:

"But as “Motherland” also shows, the Soviet men who controlled the country weren’t always so keen on encouraging or even maintaining radical egalitarianism. And when they were intent on so-called equality, it was often to punish women because of their connection to men who happened to run afoul of the Kremlin. In Kazakhstan, the Akmolinsk Camp for Wives of Traitors to the Motherland was just one node in the sprawling network of the Gulag. Children born in captivity were sent to an orphanage where they were sometimes so neglected that they didn’t learn how to speak. One mother compared the sounds such children made to “the muted moans of pigeons.”

Having children, it turned out, would be a consistent obsession of the Soviet regime. Abortion was legalized, then outlawed, then legalized again. Stalin introduced a tax on childlessness. After the demographic disaster of World War II, the new superpower needed an expanding population. Ioffe notes that Stalin’s strategy for development relied mostly on “vast human sacrifice.” Men would make the big political decisions, while women would make more babies: “They would give up their sons for the country, pretend their children were heroes rather than cannon fodder, and when those sons fell in battle, they would have more.”

Alongside this official history, Ioffe traces a private one. One of her great-grandmothers survived a pogrom. Another, the pediatrician, was forced by the secret police to work at a military hospital during World War II. The women in her family would eventually learn that their stellar professional achievements did not mean a break from domestic work.

As the Soviet economy sputtered in the 1970s and ’80s, a dearth of consumer goods also made household tasks infinitely harder. It was impossible to procure disposable diapers or washing machines. (Politburo wives, by stark contrast, had access to special stores filled with otherwise scarce goods at discounted prices.) Women with Ph.D.s and full-time jobs spent their evenings pickling mushrooms and mending clothes. Even basic menstrual products were scarce."

Europe Must Look Inward to Drive Growth, ECB’s Lagarde Says

Its growth model is ‘geared towards a world that is gradually disappearing’

By Paul Hannon of The WSJ. Excerpts:

"Instead of relying on fading external demand, Lagarde said the European Union must quickly lower its internal barriers, which prevent businesses from offering goods and services in other countries without costly efforts to comply with local regulations.

“ECB analysis finds that internal barriers in services and goods markets are equivalent to tariffs of around 100% and 65%, respectively,” Lagarde said." 

"“Reforms such as harmonizing VAT rules or establishing a common consolidated corporate tax base remain stuck because of national vetoes, leaving firms to navigate a maze of fragmented tax regimes,” she said.

Lagarde also advocated for the creation of what are known as “28th regimes”, or legal frameworks that apply across the EU which businesses could choose over national laws."

Parts of Europe at Risk of Downward ‘Spiral’ if Older Voters Stymie Reforms, EBRD Warns

By Paul Hannon of The WSJ. Excerpts:

"the EBRD [European Bank for Reconstruction and Development] concluded that later retirement, higher immigration and the adoption of new technologies to boost productivity could help offset much of the hit to growth from a shrinking working-age population." 

"political support for those measures may be weak in countries where older voters are dominant"

"Fertility rates in most post-Communist countries are below the 2.1 children per woman that would ensure a stable population. In parts of central Europe, the fertility rate is between 1.3 and 1.6 children"

"Fewer workers also mean that the annual growth of gross domestic product per head will be lower on average by 0.4 percentage points through 2050"

"governments should embrace overhauls that increase immigration, extend working lives, restructure pensions and harness technological innovation to boost productivity" 

Is Europe Awakening at Last to Its Economic Peril?

Milder-than-expected regulations, pro-business thinking. Something may be happening in the EU.

By Joseph C. Sternberg. Excerpts:

"on Nov. 13 [the EU] passed a tranche of climate regulations"

"lawmakers greatly reduced the number of European companies that would face onerous new reporting requirements by increasing the company-size thresholds at which the rules kick in."

"the European Commission (the European Union’s bureaucratic arm) proposed a weakening of Europe’s digital regulations. The goal is to make the Continent safe-ish for artificial intelligence—and for American tech companies."

"more permissive approach to regulating new AI technology."

"Ms. von der Leyen and other leaders are starting to demonstrate a capacity for self-reflection and reform"

"The steady productivity convergence with the U.S. that marked the decades after 1945 stopped around 1990 when European output per capita was 80% of America’s. Since then Europe has been drifting backward in relative terms, with per-capita output these days around 70% of the U.S."

"Taxes across the Continent are far too high to be consistent with investment and job creation."

"an impassioned plea for a looser regulatory approach to new technologies, less hostility to successful companies and financial reforms to let Europe funnel more capital toward its own entrepreneurs."

"Mr. Draghi’s warning that if Europe does not deregulate, it will not prosper."

"last year’s Continent-wide election for that body [European Parliament]. The result was a majority for parties of the political right" 

"Europeans will have to abandon the safetyism that created their regulatory morass and the magical thinking that spawned their net-zero climate policies." 

Bans on Artificial Food Dyes are Unjust

By Chris Freiman.

"Artificial food dyes have been garnering a surprising amount of attention over the last few months. The FDA recently banned Red No. 3 due to concerns about the product’s safety. Now a number of states are making a push to prohibit even more artificial food dyes. These bans are defended on the grounds that artificial dyes pose health risks, add nothing of nutritional value, and serve only to make food and drinks more visually appealing. So why not prohibit them? It seems like a ban would be all benefit and no cost.

Let’s assume, at least for the sake of argument, that the above concerns are justified; even so, we shouldn’t ban artificial food dyes. The reason is simple: people have the right to decide for themselves whether they have good reason to accept risks to their own health. Suppose, as some claim, that the bans on artificial dyes would make the relevant products more expensive. For instance, the National Confectioners Association suggests that they “will make food significantly more expensive for, and significantly less accessible to, people in the states that pass them.” Someone should be free to buy and consume riskier food to save money given that people generally have the right to take health risks for financial reasons. Jane is free to quit her desk job to start work on a commercial fishing vessel for a trivial increase in salary even though commercial fishing is a lot riskier than working from an office. Similarly, someone should be free to consume products with artificial dyes to save money if they prioritize savings over safety.

Now, the claim that the artificial dye bans will make food more expensive is contested. So let’s suppose it’s false and prices won’t change at all. Maybe the only reason why these dyes are used is to make food and drinks more aesthetically appealing. Still, people have the right to take risks for purely aesthetic reasons. Imagine you’re at a car dealership choosing between a gray car and a red car. They’re the same price, but the red car has fewer safety features than the gray one. However, you simply prefer red and so you buy the red car. Maybe that’s an unwise choice, but it’s yours to make. Or suppose you’ve got a headache and you’re choosing between two pain relievers. The red pill carries greater risks than the gray pill. But here again, you simply prefer red to gray, and so you opt for the riskier pill. Few would dispute that you should be free to make this choice.

The right to make decisions regarding your own health is grounded in the right of bodily autonomy, which is sometimes summarized as “your body, your choice.” Since it’s your body, you have the right to take risks with it. You can undergo risky surgeries, climb Mount Everest, or simply refuse to take needed medication. Think of it this way: if the Picasso painting is yours, you have the right to play Frisbee with it. This risks harming the painting, but it would be wrong for others to forcibly stop you. Similarly, maybe consuming artificial food dyes is risky and unwise, but you’re taking the risk with your own body. So, it would be wrong for others to forcibly prevent you from consuming them.

Lastly, consider that the state doesn’t ban substances that are far more harmful than artificial food dyes, such as cigarettes. This is strange—it’s analogous to the state making it illegal to stub your toe to ensure that you’re taking care of your health, while at the same time legalizing dueling. If we’re unwilling to ban products that are more harmful than artificial food dyes, we shouldn’t be willing to ban artificial food dyes either."

Your Fridge Is Bigger and Cheaper Today, Thanks to Global Trade and Innovation

By Jeremy Horpedahl.

"In the summer of 2024, a passage from J.D. Vance’s memoir Hillbilly Elegy gained widespread attention on social media platforms, including X/​Twitter. Vance described his refrigerator from the 1980s, asserting that it preserved lettuce for weeks beyond the capabilities of contemporary models.

This was not just an offhanded comment by Vance, as he also said his takeaway from this anecdote is that “economics is fake.” By “fake,” he means that “we became less good at manufacturing in this country, too focused on low cost and not on durability.” While Vance’s comment was in the context of antitrust policy and consumer choice, we can also interpret this within Vance and Trump’s broader policy agenda, which views international trade as, in many cases, a net harm to the US—including, in this case, for consumers (not just the alleged loss of manufacturing jobs). 

As we shall see, major appliances such as refrigerators have gotten both bigger and cheaper, though Vance would claim they are inferior in some other way (not preserving food as long).

It is certainly true that imports of major appliances now account for a significantly larger share of US consumption than they did in the early 1980s. A report from the US International Trade Commission in 1989 (see Table 3–13) shows that in the early 1980s, imports of major household appliances were less than 10 percent of sales (by both volume and value). This began to climb throughout the 1980s, and today, over half of large appliances (which include refrigerators) sold in the US are imported. As we will see, this period of increasing imports of refrigerators and other large appliances has been marked by higher affordability, larger sizes, and greater efficiency.

Affordability: A Dramatic Decline in Real Costs

A fundamental economic principle in assessing “value” is opportunity cost, the labor or resources forgone to acquire a good. Nostalgic accounts often overlook how prohibitively expensive appliances were, both in absolute and relative terms, during the 1980s.

Consider a premium Sears Kenmore side-by-side refrigerator-freezer from 1984, offering 25.7 cubic feet of capacity with in-door water and ice dispensers. Its list price was $1,359.99. Adjusted for inflation to 2024 dollars, this equates to approximately $3,900. Yet inflation alone understates the burden; we must account for prevailing wages to gauge accessibility.

In 1984, the average hourly earnings for production and nonsupervisory workers (representing about 80 percent of the private workforce) stood at roughly $8.32. Acquiring the Kenmore would thus require approximately 163 hours of labor, equivalent to more than three full workweeks.

By contrast, a comparable 2024 model from a major retailer like Home Depot—matching size and features—retailed for $998 in nominal terms in 2024, when I last checked it, a direct reduction without inflation adjustment. With average hourly earnings in 2024 at about $29.85 for the same worker category, the labor investment drops to around 33 hours. In relative terms, refrigerators have become nearly five times more affordable, reflecting efficiencies from global supply chains, automation, and competition.

Interestingly, that fridge has increased in price sharply since 2024, almost certainly in part because of trade policy, and is currently listed at $1,658—even so, it is still much cheaper when measured in time prices, requiring just 53 hours of labor, compared with 163 hours in 1984 (and you can probably find a Black Friday deal on it too).

And while I made an apples-to-apples comparison of fridges in 1984 and 2024, today’s models are generally much bigger. According to the Association of Home Appliance Manufacturers, the average fridge size in 1980 was 19.6 cubic feet, and it had grown over 30 percent to 25.8 cubic feet in 2021—the same size as I used in the comparison. Indeed, in the 1984 Sears catalog, the largest unit offered was 25.7 cubic feet. Today, you can find models that are over 30 cubic feet.

Energy Efficiency: Quantifiable Gains in Operating Costs

Beyond upfront costs, the total cost of ownership includes ongoing expenses, particularly energy use—a factor amplified by refrigerators’ constant operation. Here, the divergence between eras is stark, driven by regulatory standards and engineering innovations.

A typical 1984 Sears model consumed an estimated 1,415 kilowatt-hours (kWh) annually, according to the catalog listing. At the national average residential electricity rate of 8.2 cents per kWh that year, this translated to about $116 in yearly operating costs. Scaled to 2024 rates of approximately 17.6 cents per kWh, the same unit would cost $233—doubling the expense and straining modern budgets.

Contemporary refrigerators, however, have achieved marked efficiency improvements through advanced insulation, variable-speed compressors, and, to some extent, government regulations. A similar 2024 model uses roughly 647 kWh per year—less than half the energy of its predecessor. At current rates, annual costs fall to about $118, yielding savings of over $115 compared to running a vintage unit.

Appliance Longevity: Myth Versus Empirical Evidence

A common rebuttal to modernization critiques is that newer refrigerators fail prematurely, eroding long-term value. While individual experiences vary, aggregate data from the EIA’s Residential Energy Consumption Survey (RECS) challenge this narrative.

The 1990 RECS, the earliest with granular appliance age data, reported that 8.4% of households had a primary refrigerator over 20 years old, with 38.2% exceeding 10 years. By the 2020 RECS, these figures were 5.5% and 35.1%, respectively. These declines in longevity are much more modest than the anecdotes about old fridges in your grandparents’ garages. Hard data from the industry don’t go back to the 1980s, but when the New York Times talked to those who worked in the industry, many said things like “appliances made three or four decades ago lasted only 10 to 15 years [on average].” And, the Times grudgingly acknowledges, some of the small decline in longevity can be blamed on “federal regulations for water and energy efficiency for most frustrations with modern appliances,” which result in substituting cheaper parts. So, perhaps not all of the efficiency gains are driven by consumer demand, but they should still be considered in the overall calculation. And the substitution for cheaper parts could partially be due to another factor: tariffs. As tariffs on metals used in appliances make domestic parts more expensive, some manufacturers may switch to plastic components.

While the longevity of appliances hasn’t increased in recent decades, it has also not fallen dramatically, which is offset by the gains in affordability and efficiency. These three trends are summarized in Figure 1.

 

Reflections and Broader Implications

Vance’s anecdote may resonate with many Americans, but we need to examine the hard data before succumbing to economic nostalgia. Since 1984, median nominal wages have increased by about 250 percent, while quality-adjusted appliance prices have fallen, as shown in Figure 2.

 

The quality-adjusted appliance price index comes from the Bureau of Economic Analysis, though as we have seen earlier in this post, even without quality adjustments, appliances are cheaper in nominal terms. I can’t say whether the quality adjustment takes into account Vance’s claim that his fridge makes lettuce last longer, but given that lettuce and almost all other grocery items are more affordable than they were in the early 1980s, we can safely celebrate the fact that refrigerators are dramatically more affordable today.

When Americans think about their refrigerator and other appliances, they shouldn’t think, “Economics is fake.” Instead, they should recognize that this is one area of their consumption that has become more affordable, thanks to globalization and other competitive forces, whereas housing, healthcare, and education have become less affordable. And while those services are an important part of the typical household budget, the story of increasing affordability for refrigerators is in no way unique for goods produced under a free market economy. Despite claims of economic stagnation since the 1970s, Marian Tupy has shown that finished goods have become increasingly abundant relative to wages since 1971.

While the long-term trends in the affordability of finished goods are favorable for consumers, there is one recent factor pushing in the opposite direction: tariffs. For example, a paper published in the American Economic Review showed that the 2018 tariffs on washing machines increased prices by about 12 percent. And while Figure 2 above showed increasing affordability of appliance prices, if we zoom in on the most recent years, the trends have started shifting in the wrong direction again after the much broader 2025 tariffs were imposed. Figure 3 shows that, after rising in tandem with almost everything else during the pandemic, appliance prices began to fall in 2022 and continued to decline through 2024, but then reversed in 2025. While the increase since March 2025 (before the biggest tariff announcements) has been somewhat small, it would have been much larger if we had expected the pre-2025 trend to continue."

 

Did California's Carbon Cap and Trade Program Increase Toxic Waste?

By Jeffrey Miron.

"Apparently, yes:

In California, recent evidence shows that facilities subject to cap-and-trade have reduced their greenhouse gas emissions by 3–9 percent. Our findings, however, reveal that toxic emissions from facilities subject to cap-and-trade policies were about 26–42 percent higher on average in the five years after the introduction of the program than they would have been otherwise.

Why? Treating toxic waste is a substantial source of greenhouse gas emissions; hence, increasing the cost of greenhouse gas emissions also makes treating toxic waste more expensive. As a result, cap-and-trade has inadvertently prompted firms to strategically cut back on their efforts to treat toxic waste, causing them to release more of it.

These results do not, by themselves, mean the cap and trade program was a mistake; that depends on the magnitude of the harms from carbon emissions versus those from toxic waste.

The example nevertheless illustrates that reducing environmental harms can be difficult; reducing one kind can increase another, since most productive activities generate a range of externalities."

Race and economic well-being in the United States

From Tyler Cowen.

"We construct a measure of consumption-equivalent welfare for Black and White Americans, which incorporates life expectancy, consumption, leisure, and inequality. Based on these factors, welfare for Black Americans was 40 percent of that for White Americans in 1984 and 59 percent by 2022. There has been remarkable progress for Black Americans: The level of their consumption-equivalent welfare increased by a factor of 3.5 over the last 38 years when aggregate consumption per person only doubled. Despite this progress, the welfare gap in 2022 remains disconcertingly large at 41 percent, much larger than the 16 percent gap in consumption per person.

That is from a new article by Jean-Félix Brouillette, Charles I. Jones, and Peter J. Klenow, just published in American Economic Journal: Insights."

It states that black "consumption-equivalent welfare increased by a factor of 3.5 over the last 38 year." It also states that it "40 percent of that for White Americans in 1984." 

So then I will assume that blacks in 1984 had a score of 40 and whites had a score of 100. But it is now (in 2022) 3.5 times higher for blacks. That would give them a score of 140, which is 40% higher than what whites had in 1984. That sounds pretty good because I have never heard anyone say that whites were suffering terribly in 1984. 

 

The Pilgrims’ Real Thanksgiving Lesson

By Benjamin Powell of Texas Tech University.

"Feast and football. That’s what many of us think about at Thanksgiving. Most people identify the origin of the holiday with the Pilgrims’ first bountiful harvest. But few understand how the Pilgrims actually solved their chronic food shortages.

Many people believe that after suffering through a severe winter, the Pilgrims’ food shortages were resolved the following spring when the Native Americans taught them to plant corn and a Thanksgiving celebration resulted. In fact, the pilgrims continued to face chronic food shortages for three years until the harvest of 1623. Bad weather or lack of farming knowledge did not cause the pilgrims’ shortages. Bad economic incentives did.

In 1620 Plymouth Plantation was founded with a system of communal property rights. Food and supplies were held in common and then distributed based on “equality” and “need” as determined by Plantation officials. People received the same rations whether or not they contributed to producing the food, and residents were forbidden from producing their own food. Governor William Bradford, in his 1647 history, Of Plymouth Plantation, wrote that this system “was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort.” The problem was that “young men, that were most able and fit for labour, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense.” Because of the poor incentives, little food was produced.

Faced with potential starvation in the spring of 1623, the colony decided to implement a new economic system. Every family was assigned a private parcel of land. They could then keep all they grew for themselves, but now they alone were responsible for feeding themselves. While not a complete private property system, the move away from communal ownership had dramatic results.

This change, Bradford wrote, “had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been.” Giving people economic incentives changed their behavior. Once the new system of property rights was in place, “the women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability.”

Once the Pilgrims in the Plymouth Plantation abandoned their communal economic system and adopted one with greater individual property rights, they never again faced the starvation and food shortages of the first three years. It was only after allowing greater property rights that they could feast without worrying that famine was just around the corner.

We are direct beneficiaries of the economics lesson the Pilgrims learned in 1623. Today we have a much better developed and well-defined set of property rights. Our economic system offers incentives for us—in the form of prices and profits—to coordinate our individual behavior for the mutual benefit of all; even those we may not personally know.

It is customary in many families to “give thanks to the hands that prepared this feast” during the Thanksgiving dinner blessing. Perhaps we should also be thankful for the millions of other hands that helped get the dinner to the table: the grocer who sold us the turkey, the truck driver who delivered it to the store, and the farmer who raised it all contributed to our Thanksgiving dinner because our economic system rewards them. That’s the real lesson of Thanksgiving. The economic incentives provided by private competitive markets where people are left free to make their own choices make bountiful feasts possible."

The Poverty Line is Not $140,000

By Jeremy Horpedahl.

A recent essay by Michael W. Green makes a very bold claim that the poverty line should not be where it is currently set — about $31,200 for a family of four — but should be much higher. He suggests somewhere around $140,000. The essay was originally posted on his Substack, but has now gone somewhat viral and has been reposted at the Free Press. (Note: that actual poverty threshold for a family of four with two kids is $31,812 — a minor difference from Mr. Green’s figure, so not worth dwelling on much, but this is a constant frustration in his essay: he rarely tells us where his numbers come from.)

I think there are at least three major errors Mr. Green makes in the essay:

1. He drastically underestimates how much income American families have.
2. He drastically overstates how much spending is necessary to support a family, because he uses average spending figures and treats them as minimum amounts.
3. He obsesses over the Official Poverty Measure, since it was originally based on the cost of food in the 1960s, and ignores that Census already has a new poverty measure which takes into account food, shelter, clothing, and utility costs: the Supplement Poverty Measure.

I won’t go into great detail about the Official Poverty Measure, as I would recommend you read Scott Winship on this topic. Needless to say, today the OPM (or some multiple of it) is primarily used today for anti-poverty program qualification, not to actually measure how well families are doing today. If we really bumped the Poverty Line about to $140,000, tons of Americans would now qualify for things like Medicaid, SNAP, and federal housing assistance. Does Mr. Green really want 2/3 of Americans to qualify for these programs? I doubt it. Instead, he seems to be interested in measuring how well-off American families are today. So am I.

Let’s dive into the numbers.

1. Measuring Income

Mr. Green’s essay is about income and spending. He mentions income 26 times in the essay. But he never (so far as I can tell) links to any measure of income. The only hard number he references from any data source is median household income, which he mentions several times as $80,000 (note: again this number isn’t quite right: it was $83,730 in 2024). But median household income probably isn’t the best number for his analysis. Households include people living alone, elderly couples, and various non-family structures. His essay primarily focuses on a “family of four (two earners, two kids),” and we have some measures of income that come more closely to approximating this type of family. And they are all much greater than $80,000.

For example, a very readily available number he could have used is median family income, which was a much higher $105,800 in 2024. But that’s all families, regardless of whether they have kids or how many earners they have. For married couples with children (regardless of number of earners), it is a much higher figure: $132,959 in 2024. For families with two earners, median income is even higher: $142,200 in 2024. I can’t find in the publicly calculated Census tables a number for married-couple-dual-earner families with children, but it would likely be in this ~$140,000 range if not higher.

So already we can see that ~$140,000 is not some mythical number that is unattainable by American families. For the type of family Mr. Green is interested in, half of the families are already at this income level. True, that does mean that half are also below it, but the $80,000 figure he keeps using as a baseline isn’t anywhere near the right number. When he says things like “If one parent stays home, the income drops to $40,000 or $50,000” (from the supposed $80,000 baseline), he is drastically understating the financial situation of a typical family.

Again, Mr. Green: “To reach the median household income of $80,000, most families require two earners.” No. The median income for a male that works full-time in the US was $75,440 in 2024. So many narratives about American decline claim that one male income isn’t enough to get by these days. But remember any time you see that median household income figure, this is basically what the median male earns, not what a dual-income family earns. For the median female working full-time, median income is $61,020. If the median male and female full-time worker are married, they earn $136,460 (just adding those two medians together), once again, right in the range that Mr. Green thinks is necessary to support a family of four.

Mr. Green has understated typical family income by something like 70 percent. Knowing this fact alone would, I think, cause him to reconsider his entire essay. But it’s worse than that: he also overstates the amount of spending required to support a family!

2. Family Spending

Mr. Green uses what he calls “conservative, national-average data” to construct a “Basic Needs budget” for our family of four. He lists spending data for childcare, housing, food, transportation, healthcare, and “other essentials” (undefined, but actually his third largest category), then throws in an income tax estimate, to get to a figure of $136,500 as the Basic Needs budget (he also then just refers to this number as $140,000 throughout most of the rest of the essay).

Again, he lists no sources for any of these numbers. I could probably track most of them down, but that would actually miss the main error he makes: he is using average spending levels as minimum spending levels needed to support a family. But the average spending levels probably represent a lot of spending that is not necessary to support a family, but is merely a reflection of how wealthy we are today!

Take food spending. The essay says the family needs to spend $14,717 on food as a minimum. This number probably comes from the Consumer Expenditure Survey, which shows a family of four spent $14,325 on food in 2023, and maybe adjusted it up by food inflation since then. But that’s how much a family actually spent, which will include, for example, at least some discretionary dining out experiences: groceries are just 60% of this total!

What’s a better number? Thankfully, the USDA puts out regular estimates of the cost of a “thrifty food plan,” and their reference family is two adults with two kids. Perfect for our purposes. Unfortunately, in 2021 the Biden administration increased the cost of this thrifty food plan by about 21% — that is, above the cost of food inflation — so I’m not totally confident in this number anymore. Nonetheless, the figure can be useful: USDA says it is currently $1,002.20 per month, or about $12,000 per year, for our family of four. Prior to the Biden revision, the figure was $687.40 per month in May 2021, which if we adjust for grocery inflation since then comes to $850 per month or about $10,200 per year.

So $10,000-$12,000 per year is probably a better number, rather than almost $15,000 in Green’s essay. You might say this is only a few thousand dollars, but notice he is overstating food costs by 22-47 percent! If all of the costs are being overstated by 1/3 or so, it no longer takes $118,000 of post-tax income to support the family, but closer to $90,000, already putting us well below median family income.

Are all of the costs as overstated as the food costs? I won’t dive into each category. I can’t even begin to dive into the big $22,000 “other essentials” category, because we don’t know what it is! But let’s talk about housing for a moment. He puts that annual housing costs at $23,267, or $1,938 per month. Is it possible to house a family of four for less than that?

Again, clearly it is. First, we can note that median gross rent in the US was $1,487 in 2024. Of course, most Americans aren’t renters, but rent is a useful figure to use because it generally resets annually at market rates (whereas homeowners are somewhat insulated, so averages including long-term homeowners aren’t especially useful), and we don’t need to add in things like property taxes or maintenance. The rent already reflects those. If that number is reasonable, then housing costs have been overstated by 30 percent.

Can a family of four house themselves for under $1,500 per month? Probably not in NYC. Probably not in LA. But if we look in Chicago, the central city of America’s third largest MSA, we see almost 200 homes for rent that are at least 3 bedrooms and under $1,500. If we look in Dallas-Fort Worth (without going to the outer suburbs), America’s fourth largest MSA, we can find there are currently 350 homes for rent under $1,500 with at least 3 bedrooms on Zillow.

Are all of these rentals perfect? No. Is Zillow a comprehensive listing of rentals? Also, no. So the fact that there are currently hundreds of rentals available in two of America’s largest metro areas that could house a four-person family for less than $1,500, clearly the $1,900 figure is too high (if we expand the search filter to $1,900, we get 760 rentals in Chicago and whopping 2,000 rentals in DFW). The housing figure is probably also 30-40% overstated.

Before leaving the discussion of housing prices, I should emphasize that I am not trying to minimize the housing affordability question. As I have written about numerous times in the past, housing has become much less affordable in recent years. But at the same time, we need not overstate how much it costs. You can certainly pay $2,000 per month if you want, but in most of America you could house a family of four for much less than that.

One final cost I will discuss is childcare. I won’t quibble too much with the number he uses, about $16,000 per child per year, other than to say that childcare costs vary significantly by state, and only a handful of states have an average of $16,000 or more. But the most important thing about childcare costs is that these are temporary costs, thank goodness. Most kids will only be in full-time daycare for a maximum of 5 years, so for a 2-child household this is 10 years of full-time daycare costs, or about $160,000 total over the kids’ younger years.

A median-income female makes that much income in just three calendar years. It doesn’t make sense to put $32,773 into the permanent basic needs budget of a 2-child family, since it is a temporary expense. And it’s also wrong to say, as Green does, that the “second earner is working to pay the stranger watching their children so they can go to work and clear $1-2K extra a month.” The median female is making double the cost of daycare — and yes, while she pays taxes, there are also tax credits. And they are only bearing that full cost for 5 full calendar years, compared with a working career of perhaps 40 years of the second earner’s salary. I’m not saying everyone should choose daycare and two earners! But as with housing, Mr. Green is radically overstating the full impact of this choice on the household budget.

3. Other Poverty Thresholds Exist

Finally, Mr. Green seems to take a lot of issue with the Official Poverty Measure. He is certainly not the first person. Again, read Winship’s essay on this topic for more on the history of this measure. But since Mr. Green is not the first to complain about the OPM, it will not surprise you to learn that there are many alternative measures of poverty that have been developed over the years. A very well-known one, also produced by the Census Bureau, and even included in all of the same reports as the OPM is a newer measure called the Supplemental Poverty Measure.

The SPM overcomes most of the criticisms of the OPM. First, it is not merely linked to a historical cost of food. It is based on, and annually updated with, a budget that includes all of the essential spending categories: food, but also housing, clothing, and utilities. True, it does not include healthcare and childcare, but a low-income family will almost certainly qualify for government healthcare, and a low-income family in the range of these thresholds (as we will see) likely has one primary earner (if they are in the middle of the distribution).

Another way that the SPM is better than the OPM is that it has those housing costs vary by geographic area, unlike the OPM which is a single number for the entire nation (technically, Alaska and Hawaii have different thresholds, but they aren’t radically different). This does mean that for the SPM we can not state one single number for the nation, which makes sense! But it is problematic for this kind of essay. Are the SPMs generally close to the OPM of about $32,000 for a family of four? Or closer to Mr. Green’s $140,000?

The answer is they are much closer to the OPM than Mr. Green’s figures. For research purposes, BLS has created a representative national number for a family of four under the SPM: it’s about $40,000 for renters and homeowners with mortgages. Of course, the nice thing about the SPM is that it takes account of different housing costs, so these numbers vary by location. But the highest is in the San Jose MSA, at almost $60,000 for renters. The NYC MSA is $45,000. Chicago is just $40,000. Little Rock, Arkansas, the MSA that I live in, is $35,000. All of these are higher — in some cases much higher — than the national Official Poverty Measure, however none of them are anywhere near $140,000!

Are the SPM thresholds to be believed? Can you really live in San Jose for $60,000 per year? It would be hard, and you would certainly be living in poverty. But I have no doubt you can find some families in that MSA living on that little. It is a challenging financial situation. It is probably exactly what you think of when you hear the word poverty. But it is not impossible.

Minimum wage in San Jose is about $18/hour, so two workers working not quite full time would hit about $60,000. Average rent there is about $3,000, which would be hard to afford on $60K — it’s half of your income! But keep in mind that the average rent is not something that everyone pays. According to the Harvard’s Joint Center for Housing Studies, 45 percent of renters in the San Jose MSA are “cost burdened,” meaning they spent at least 30 percent of their income on housing costs (JCHS says median housing costs for renters, including utilities, are about $2,600 per month). That’s a very high number. But people are doing it right now, and it is probably accurate to describe these folks as living in poverty. However, this is a far cry from $140,000, which even in San Jose would mean less than one-quarter of your pre-tax income is going to housing, well below the “cost burden threshold” and rules-of-thumb about housing budgets.

I’ve gone into a bit of detail on San Jose, but keep in mind this is the most expensive MSA in the country. Even there $140,000 is a decent income, enough to get by. But by drilling too deeply into the most expensive MSA, we miss the forest of the rest of the country: in most of the nation, $140,000 is a very high income, but also an income that can very comfortably support a family. Perhaps not in the early years, when you face those high childcare costs, when you are trying to save for that first home, when you have not yet hit your peak earning years. Yes, life can be hard!

But it’s ridiculous to use $140,000 as a poverty measure. And there is no need to reinvent the poverty wheel: Census has already done so with the SPM, overcoming almost every objection to the OPM. Using the more realistic SPM does increase the poverty rate, from 10.6% all the way up to 12.9% in 2024. But it gets you nowhere near the 2/3 of families that Mr. Green identifies as being in poverty.

Finally, perhaps the SPM isn’t a perfect measure of poverty either! Researchers continue to come up with new methods, as in this 128-page summary report from the Interagency Technical Working Group on
Evaluating Alternative Measures of Poverty from 2021. Perhaps some day we will have an even better measure than the SPM (one of the recommendations from the working group is to account for healthcare costs), but if we do get such as measure it will be based on carefully calculating how much income is needed to support a family, not wildly adding together overinflation national spending averages."

The effects of unemployment benefit duration

What happened to the US labor market after the Emergency Unemployment Compensation Act expired after the Great Recession?

By Tyler Smith of The AEA. 

"In December 2013, when Congress failed to reauthorize the Emergency Unemployment Compensation Act, many prominent economists predicted a substantial decline in employment and labor force participation.  

In a paper in the American Economic Journal: Macroeconomics, authors Marcus Hagedorn, Iourii Manovskii, and Kurt Mitman show, to the contrary, that this abrupt end to unemployment benefits actually led to a surge in employment and labor force growth, especially in states with larger cuts in benefit duration.

The sudden termination of federal support for unemployment benefits and its variation across states provided an ideal natural experiment for understanding the relationship between these benefits and the labor market.

Figure 1 from the authors’ paper shows the reform's impact through two panels tracking employment-to-population ratios and labor force participation rates. The dashed vertical line indicates the expiration of the Emergency Unemployment Compensation Act.

 

The chart displays the difference between states that had high benefits and low benefits before the reform, normalized to zero in the fourth quarter of 2013. Prior to the reform, both panels show a steady downward trend, indicating that high-benefit states experienced persistently deteriorating labor markets relative to low-benefit states.

In 2014, the downward trend abruptly changed direction. Employment in previously high-benefit states surged by 0.008 points relative to low-benefit states within a year, completely reversing the multi-year decline. Labor force participation in generous states also recovered, rising by nearly 0.005 points relative to less generous states. This sharp discontinuity at precisely the moment of the policy change, along with the absence of other major changes in the policy environment, provides strong evidence that the benefit cut drove the employment recovery.

The researchers estimate that a 1 percent reduction in benefit duration increased employment by 0.02 log points after four quarters. Nationally, this translated to 2.5 million additional employed Americans by late 2014, accounting for 75 percent of that year's employment growth.

The findings suggest that while unemployment insurance provides crucial support during economic downturns, extended benefits may delay full recoveries.

♦

“The Impact of Unemployment Benefit Extensions on Employment: The 2014 Employment Miracle?” appears in the October 2025 issue of the American Economic Journal: Macroeconomics."

Feast More, Spend Less: The Most Affordable Thanksgiving in Four Decades

The time price of a Thanksgiving dinner for 10 people has dropped 45.3 percent, from 3.22 hours in 1986 to 1.76 hours today.

By Gale L. Pooley. He is an economics professor at Utah Tech University.

"Summary: Thanksgiving has never been more affordable. Though nominal prices have risen over the decades, nominal wages have risen much faster, meaning today’s workers spend far less time earning their holiday meal than previous generations did. Thanks to innovation, productivity, and economic freedom, abundance has grown even as the population has increased.

---

Since 1986, the American Farm Bureau Federation (AFBF) has conducted an annual price survey of food items found in a typical Thanksgiving Day dinner. The items on this shopping list are intended to feed a group of 10 people, with plenty of leftovers. The list includes a turkey, a pumpkin pie mix, milk, a vegetable tray, bread rolls, pie shells, green peas, fresh cranberries, whipping cream, cubed stuffing, sweet potatoes, and several miscellaneous ingredients.

What has happened to the price of a Thanksgiving Day dinner over the past 39 years? The AFBF reports that in nominal terms, the price rose 92 percent, from $28.74 in 1986 to $55.18 in 2025. However, since we buy things with money but pay for them with time, we should analyze the cost of a Thanksgiving Day dinner using “time prices.” To calculate the time price, we divide the nominal price of the meal by the nominal hourly wage rate. That gives us the number of work hours required to earn enough money to feed 10 guests.

According to the Bureau of Labor Statistics, the blue-collar hourly wage rate has increased 251.2 percent, from $8.92 per hour in 1986 to $31.33 per hour in 2025. Remarkably, hourly wages for entry-level workers have increased even faster—from $4.72 to $18.75 per hour, or 297.2 percent.

Remember that when wages increase faster than prices, time prices decrease. As the figure below shows, the blue-collar time price of a Thanksgiving dinner for 10 people has dropped 45.3 percent, from 3.22 hours in 1986 to 1.76 hours today, the lowest time price on record. Today, an individual blue-collar worker enjoys a Thanksgiving dinner for the “time price” of 10.6 minutes compared with 19.3 minutes in 1986.

 

Given that the time price of a Thanksgiving dinner decreased by 45.3 percent, a blue collar worker now gets 83 percent more dinner for the same time it took him to earn the money to buy one dinner back in 1986.

Upskilling Workers

Most people don’t begin their careers as blue-collar workers and remain there for 40 years. Imagine starting as an entry-level worker in 1986 earning $4.72 per hour. If, over the past four decades, you have upskilled and advanced to the US average wage of $36.53 per hour, your nominal wages would have risen 673.9 percent. A Thanksgiving dinner for 10 that required 6.1 hours of work in 1986 now takes just 1.51 hours. The time price has fallen 75.2 percent. For the time it once took to buy a single Thanksgiving dinner, an upskilling worker can now buy 4.03 dinners. Personal abundance has risen by 303.1 percent. The table below summarizes the changes in prices and wage rates:

 

Population-Level Abundance

To see how food prices relate to population growth, imagine providing a Thanksgiving dinner for every person in the United States. In 1986, with a population of 240 million, feeding the nation at blue-collar wage rates would have required 77.5 million hours of work. By 2025, the population has grown 42.5 percent to 342 million—but over that same period, the time price of Thanksgiving dinners fell by 45.3 percent. As a result of those changes, feeding the entire country in 2025 would require only 60.4 million hours of blue-collar work. That’s 17.1 million fewer hours—a 22.1 percent decrease.

Malthus and Thanos would be confounded. And Paul Ehrlich? One suspects he’d rather not discuss it.

Thanksgiving is a great time to be grateful for the freedom to innovate and for all those who work so hard to transform scarcities into abundances."

How Do You Spell ‘Harvard’? With an Endless Supply of A’s

A new report looks at grade inflation, a problem that is proliferating far beyond the Ivy League

By Jason L. Riley. Excerpts:

"60% of grades given to undergraduates in the 2024-25 academic year were A’s—up from about 25% two decades ago. The median grade-point average at graduation, which was 3.29 in 1985, is now 3.83. Since 2016 the median GPA at Harvard has been an A, even though the number of hours that students say they spend studying has remained relatively unchanged for close to 20 years."

"rampant grade inflation provides a more credible explanation."

"an evaluation system that fails to perform “key functions” and a need to “restore the integrity of our grading.”"

"More students are opting for less-rigorous courses to leave time for extracurricular activities."

"a lenient grading system that effectively makes no distinction between students who have mastered the material and those who haven’t."

[one person] "argued that stricter academic standards would be a threat to students’ mental health."

"A 2023 report from Yale found that nearly 80% of grades given to its undergraduates were A’s or A-minuses."

"between 1990 and 2020, the median college GPA rose by 21.5%."

"Because colleges have lowered admissions standards to take advantage of tuition subsidies and admit as many students as possible, they have a strong incentive to lower standards for grading and for graduation." 

The Jobs Report Is a Peek Through Economic Fog

The September figures show a softening but still resilient economy

WSJ editorial. Excerpts:

"Only 55,000 jobs were gained between May and August, after the latest report’s downward revisions."

"One clear culprit is President Trump’s tariffs, which have raised costs for businesses and reduced international trade. UPS said last month it has cut 48,000 jobs this year as a result of declining package volumes and rising labor costs. The Administration’s immigration raids at workplaces have contributed to labor shortages in some industries. The immigration freeze means fewer workers and consumers."

" the share of small businesses that cite labor quality as their single most important problem has increased over the last year by 18 percentage points in construction and 22 percentage points in transportation." 

Medicaid Insurers Promise Lots of Doctors. Good Luck Seeing One

Many doctors listed in insurer networks treat few or no Medicaid recipients, leaving patients with long waits; ‘Don’t get sick.’

By Christopher Weaver, Anna Wilde Mathews and Tom McGinty of The WSJ. Excerpts:

"Private Medicaid insurers dominate the government healthcare program that covers more than 70 million low-income and disabled Americans. But when Medicaid-plan enrollees need care, they often can’t get appointments with the doctors listed in those insurers’ networks."

"the networks of doctors that insurers listed for their Medicaid members are less robust than they appear. Some doctors are erroneously shown in states or cities where they don’t actually work. Others won’t book appointments for Medicaid patients, who typically are far less lucrative than those with employer coverage. Some medical practices limit slots allotted for Medicaid visits, or simply won’t take new Medicaid patients."

"Centene claimed to have 28 child psychiatrists available to Medicaid patients within 50 miles of McClure’s home, including in nearby St. Louis, in 2023, according to a list the insurer submitted to Illinois officials. Eleven didn’t have a single appointment that year with a Centene Medicaid patient"

"To assess private insurers’ Medicaid networks, the Journal compared the insurers’ lists of providers with records of Medicaid care provided across 22 states in 2023. The analysis found that more than a third of the doctors listed in the networks didn’t treat the insurers’ Medicaid patients that year."

"Medicaid’s annual costs of about $900 billion are borne by state and federal taxpayers."

"More than 70% of Medicaid patients get their coverage through private insurers that contract with states to oversee the benefits."

"The Journal’s analysis showed that, in some states, the networks appeared to contain erroneous listings, such as psychologists, who don’t hold medical-school degrees, being listed as psychiatric doctors. 

In Texas, among the medical professionals that UnitedHealth’s Medicaid plan identified as doctors between 2021 and 2023 were 59 nurse practitioners and 31 physician and anesthesiology assistants"

"Insurers generally pay doctors far more to see a person with employer insurance, and hospitals often argue they need to be paid far higher rates for those with private insurance to make up for the money they lose on Medicaid patients."  

Guns were not necessary for industrialization and whaling did not account for 11% of GDP in 1850

See ‘The Killing Age’ Review: Born in Bullets: The modern world has been transformed by inventions from the electric motor to penicillin. Is the mass-produced gun the most important among them? by Kyle Harper, a professor at the University of Oklahoma. Excerpts: 

"Alas, “The Killing Age” is too marred by error and exaggeration to fulfill its promise. Take the chapter on American whaling. Mr. Crais wants to portray the global whale hunt as a massacre integral to America’s economic modernization (“The U.S. industrial revolution began at sea with killing”). He claims that at “around its height, in 1850, whaling accounted for something like 11% of GDP.” This claim (which features a footnote that does nothing to support the allegation) isn’t only wrong but outlandishly so; it betrays not only a tendency to embellish but a near-total lack of economic understanding: Peak annual production in the whaling industry was roughly $9 million in the early 1850s, when GDP was around $3 billion, so whaling accounted for closer to 0.3% of the economy. Ultimately, the huge numbers adduced to support this and other assertions throughout the book seem intended to shock rather than to support serious causal argumentation."

"the history of whaling on its own disproves the central point of “The Killing Age,” that guns were a sine qua non for the making of the modern world. Before the Norwegian magnate Svend Foyn patented the grenade harpoon in 1870 (which goes unmentioned), the whalers Mr. Crais describes found ways to slaughter uncounted marine giants with ancient technologies—thrown harpoons and lances. He repeatedly invokes counterfactual arguments to insist that without guns there would have been no Industrial Revolution. Nevertheless, despite the absence of gunpowder, mass slaughter proceeded throughout the world’s oceans."

"Mr. Crais argues that fossil-fuel emissions had already begun to force global warming in the 19th century, triggering drought, famine and mass death. This isn’t a universally or even widely accepted position. While it fits his narrative, the overbold assertion does a disservice to serious science, and its lack of nuance gives fuel to those who would say that climate-change discourse is mere ideology."

"The primary contribution of Mr. Crais’s book to a rapidly growing literature is its hyperbole" 

Why CEOs Get Paid So Much

Doug McMillon’s success at Walmart shows the value of corporate leadership

WSJ editorial. Excerpts:

"Mr. McMillon pressed the company to grow its own e-commerce capability, which now competes well with Amazon and the rest. He has also been among business leaders who have integrated AI into its store management and other operations to increase productivity—and profitability. Walmart, which imports a huge share of its products, has managed the Trump tariff shock about as well as any company.

One of the hardest tasks in business is to inherit a giant business and continue to grow. Corporate history is full of once-famous business names that failed to adapt. General Electric is the classic tale of rise and fall, but in retail so are Sears, Kmart and many others. Success in business, unlike in government, is a constant struggle tested in a competitive marketplace.

Mr. McMillon’s efforts have paid off for shareholders and workers. Walmart’s annual revenue has grown on his watch from nearly $486 billion to $681 billion in its latest fiscal year. Walmart’s shares have risen some 310% in his tenure, while the company has increased wages and benefits for Walmart’s 2.1 million employees."

 

The Real Fix for ObamaCare

The problem isn’t the size of the subsidies. It’s their structure. 

By Tony LoSasso and Kosali Simon. Mr. LoSasso is a professor of economics at DePaul University. Ms. Simon is a distinguished professor of economics at Indiana University. Excerpts:

"The Affordable Care Act’s subsidy formula guarantees that people buying health insurance through the marketplaces pay no more than a fixed percentage of income for a benchmark plan. The government pays the rest. This shields buyers from premium increases but ensures that when premiums rise, taxpayers pay more. Insurers face little pressure to compete on price, and government costs grow faster than enrollment."

"In 2015 ObamaCare enrollees who received assistance paid about 36% of their premium out of pocket; by 2023 that share had fallen to 17%."

"average net premiums for subsidized enrollees largely remained flat even as gross premiums rose because taxpayers absorbed the increase."

"A sustainable marketplace would look more like the Federal Employees Health Benefits Program: The government makes a predictable contribution pegged to a lower-cost, benchmark plan; consumers who choose pricier options pay the difference. The system, sometimes called “managed competition,” helps keep public costs in check and rewards insurers that deliver value rather than raise premiums." 

Why Ford Can’t Find Mechanics

Forget about reshoring manufacturing without more skilled workers

WSJ editorial. Excerpts:

"Government subsidies for college and graduate education have encouraged the young to go to college even though they might be better off learning a trade. This has created a skills mismatch in the labor market. Unemployment among young college grads is increasing, while employers struggle to hire skilled manufacturing workers, technicians and contractors.

Only 114,000 Americans in their 20s completed vocational programs during the first 10 months of last year, compared to 1.24 million who graduated from four-year colleges and 405,000 who received advanced degrees. Yet recent bachelor’s recipients in their 20s were 5.6 percentage points less likely to be employed than those who finished vocational programs."

"one third of small business owners reported jobs they couldn’t fill, and 49% reported few or no qualified applicants for positions they were trying to fill." 

Europe Aimed to Set Standards for Tech Rules, Now It Wants to Roll Them Back: Backed by France and Germany, the EU thinks easing back on legislation will make the bloc less dependent on U.S. tech

By Bertrand Benoit, Kim Mackrael and Sam Schechner of The WSJ. Excerpts:

"Europe is moving to relax some of the world’s tightest digital regulations in a bid to boost growth and reduce its reliance on U.S. tech."

"The European Commission . . . introduced a proposal to pare back some elements of its sweeping digital laws."

"measures that aim to make it easier for companies to use data to train AI models and delays to the enforcement of certain provisions in the EU’s new AI law."

"German Chancellor Friedrich Merz [said] . . .“Unnecessary regulation…must not inhibit Europe’s innovative strength.”"

"France and Germany would push for . . . EU’s AI rules to be postponed by a year and for Europe’s stringent data-privacy rules, known as the General Data Protection Regulation, or GDPR, to be relaxed."

"business leaders across Europe have grown frustrated at the torrent of legislation that has been gushing from Brussels"

"the resulting red tape a bigger obstacle to growth than President Trump’s tariffs."

"the simplest client question—does this rule affect me?—can take several lawyers two days to answer."

"the EU is now pushing to make the bloc more attractive for investment, seeking to ease the regulatory burden"

"European leaders also think a regulatory rollback will help the region’s economy reduce its dependence on" [the U.S. and China]

"“We have to innovate before regulating . . . said Macron."

"onerous regulations, especially on the handling of data, and political disagreements within Europe have hobbled the emergence of European players on a scale to rival their U.S. competitors."

"the top French and German business organizations wrote  . . . Europe . . . should focus on “creating a supportive investment climate" 

The FTC’s Meta Antitrust Implosion

Its monopoly case loses after five years of fierce online competition

WSJ editorial. 

"the FTC overreached. Its lawsuit argued that Facebook’s acquisitions of Instagram (2012) and WhatsApp (2014) violated antitrust laws by eliminating potential competitors. This was revisionist antitrust history. The FTC had blessed those deals. At that time, Instagram and WhatsApp were startups with almost no revenue. Neither was destined to succeed as a stand-alone company."

"federal Judge James Boasberg explains how Meta worked to make Instagram and WhatsApp successful by improving their design and increasing their revenue, including while the FTC’s case was pending. “The landscape that existed only five years ago when the Federal Trade Commission brought this antitrust suit has changed markedly,” he writes."

"Meta has been forced to evolve in response to competition, increasing smartphone usage, and a “massive leap” in AI-powered algorithms."

"To argue that Meta is a monopolist, the FTC claimed TikTok, YouTube, Reddit and X.com aren’t real competitors."

"The judge disagrees on all counts, citing evidence presented at the seven-week trial this spring"

"When YouTube suffered an outage in 2018, usage of Facebook went up, and vice versa when Meta briefly went dark in 2021."

"profits can be a result of “shrewd management, exceptional efficiency, booming demand, or risky investments that hit big.” The FTC couldn’t point to price increases as evidence of monopoly power, so it claimed Meta had degraded its apps’ quality."

"Meta’s apps have continuously improved"

"artificial intelligence and Elon Musk’s ownership of X.com are reinvigorating competition and disrupting business models."

"government is slower and less nimble at responding to such challenges than are markets and technology." 

Maduro Caused the Disaster

He and Chávez created the crisis in Venezuela, not Trump

Letter to The WSJ. 

"Regarding Quico Toro’s essay “Another U.S. Attempt to Topple Maduro Would Be a Disaster” (Review, Nov. 8): Venezuela’s economic collapse and migratory crisis began in 2013, at least four years before the U.S. imposed broad U.S. sanctions. From 2013 onward, Venezuela experienced the highest inflation rate in the world and a precipitous decline in gross domestic product, driven directly by the devastating economic policies of Hugo Chávez and Nicolás Maduro, including widespread nationalizations, reckless monetary and fiscal policies and the implementation of universal price and currency controls.

Mr. Toro neglects the consequences of the Biden administration’s policy of accommodation. Far from improving conditions, diplomatic passivity has allowed the government to dig in its heels, intensifying repression and exacerbating the humanitarian crisis.

Leading Americans to believe that President Trump collapsed the Venezuelan economy is another way to whitewash the policies of Mr. Maduro’s regime.

Jorge Jraissati

Boca Raton, Fla.

Mr. Jraissati is president of the Economic Inclusion Group." 

What Comes After the FDA’s Drug Monopoly?

Private certification, insurer evaluation and peer-reviewed research step up.

Letter to The WSJ. 

"The FDA’s monopoly over drug and device approval—created by the 1938 Food, Drug, and Cosmetic Act and expanded by later amendments—wasn’t inevitable and is long overdue for reform (“Advice for Makary’s FDA: Get Out of the Way,” Letters, Nov. 7). Before the government seized that authority, private organizations like the American Medical Association and the U.S. Pharmacopeia helped certify safety and effectiveness. These voluntary systems informed consumers without restricting access to care.

The 1962 Kefauver-Harris Amendments, enacted after the thalidomide tragedy, required the agency to judge a drug’s safety and effectiveness—an expansion that has slowed innovation and delayed patients’ access to lifesaving treatments. Today’s “drug lag” and “drug loss” mean Americans wait years and pay billions more for medicines already available overseas.

Private certification, insurer evaluation and peer-reviewed research can assess safety and effectiveness more efficiently than a government bureaucracy. Patients should have the freedom to decide which evidence they trust and which risks they are willing to take. Congress might restore that freedom by recognizing drug approvals from peer regulatory bodies in advanced nations such as the European Union, Canada and Australia—and ultimately ending the FDA’s power to prevent adults from choosing their own treatments. The right to self-medicate is inseparable from the right to self-govern.

Jeffrey A. Singer

Cato Institute" 

There Is No Such Thing as Good Industrial Policy. But Republicans And Democrats Keep Trying.

Real industrial policy has been tried—in many countries, by governments of every ideology. It fails every time for the same reason.

By Veronique de Rugy. 

"American industry has been getting a lot of hands-on direction from Democrats and Republicans for quite some time now. Every few years, someone looks at the underwhelming results of this economic maneuvering and insists that real "industrial policy" has never been tried. The truth is that the left's call for a "mission-oriented" state and the right's yearning for a nationalist industrial revival may sound different, but they share the same conceit: that their own intentions can finally succeed where decades of intervention have failed.

The latest person to revive this evergreen fantasy is Mariana Mazzucato, the Italian-born economist who has made a career out of championing an assertive, big-spending state as the engine of innovation. In a new interview with Politico, she laments that President Donald Trump's industrial policy—which includes tariffs and government equity stakes in private companies—is "an idiosyncratic hodgepodge," not the "holistic" strategy she favors. Mazzucato wants the U.S. to have a "smart, capable" state to guide investment with purpose.

Back in the days of former President Joe Biden's industrial policy, when subsidies, tax credits, and loans were flowing, an emerging Republican faction had a similar refrain, claiming that to revive American manufacturing, restore communities, and put men back to work, industrial policy simply had to be done right. We now know that this meant increasingly erratic tariffs, price controls, and government taking shares in companies.

Hope for both sides rests on quite a premise: that Washington can guide trillions of dollars to the right industries, produce a manufacturing boom, and maybe even heal America's social fabric.

The problem isn't that industrial policy has been done badly. It's just bad economics.

Dreams of reviving manufacturing jobs face the reality that modern manufacturing is capital-intensive and largely automated. Even if subsidies or government loan guarantees spur a factory boom—and history suggests otherwise—it won't bring back 1950s-style armies of industrial workers unless we somehow outlaw productivity. Today's factories run on robots and engineers.

Nor will tariffs bring a manufacturing revival. Taxing inputs and components only raises costs, weakens U.S. competitiveness, and ultimately punishes the firms protectionists claim to support. True American industrial strength rests on productivity, innovation, competition, and access to global supply chains, not on coddling producers behind walls of higher prices.

Mazzucato and her ideological opposites commit the same error. They imagine a politics-free technocracy that can "direct" the economy. In the real world, politics always dominates economics. Subsidies and tariffs are never tools of neutral expertise; they are invitations to lobby. Every "strategic investment" quickly becomes a political IOU.

Biden's programs came loaded with child care mandates, union preferences, and "Buy American" rules. Trump's industrial interventions are indeed erratic, but the notion that his protectionism would work if wrapped in a more "mission-oriented" narrative is even sillier. Industrial policy doesn't fail because it's chaotic; it fails because it's political, and human politicians are incapable of the precision markets achieve every day.

After conducting a sweeping review of five decades of U.S. industrial policy, economists Gary Clyde Hufbauer and Euijin Jung's conclusion was unambiguous: Subsidies and trade protections for individual firms have been politically irresistible but economically ruinous. Government protection delays economic adjustments; innovation succeeds. In the rare cases when industrial policy showed positive results, the government limited itself to supporting open, competitive research and innovation—programs like the Defense Advanced Research Projects Agency or Operation Warp Speed—rather than shielding firms from competition or subsidizing failing industries.

Without that type of openness, supposed industrial policy wins will quietly lock in yesterday's technology rather than helping discover tomorrow's. France's Minitel, a government-backed precursor to the internet, looked like a national triumph in the 1980s. Millions of households were connected, citizens used it for banking, shopping and communicating, and the state could boast of digital leadership. Yet the system's centralized, permission-based design smothered innovation and prevented France from developing the open, global internet that would soon transform the world.

The illusion of progress turned out to be technological stagnation: a product that barely evolved over three decades. This is the unseen cost of industrial policy. By insulating favored industries and technologies, it freezes innovation in place and leaves a nation paying twice: once through taxes and again through missed opportunities.

So yes, real industrial policy has been tried—in many countries, by governments of every ideology, under every rhetorical banner from "innovation" to "resilience." It fails every time for the same reason: The visible hand of the government is clumsy, self-interested and easily bought. If that's what passes for a "smart state," I'll take the invisible hand of the market any day."

The Adverse Consequences of High-Tax Welfare States

From Dan Mitchell.

"Honest leftists (the “Okunites“) generally acknowledge that laissez-faire policies deliver more growth, but they nonetheless favor high taxes and redistribution because they argue that social equality matters a lot.

However, according to this chart, there’s a negative relationship between bigger government and social welfare indicators such as health, education, unemployment, and exclusion.

 

Looking specifically at labor markets, you see a negative relationship between bigger government and good results.

This holds true even for workers with only a basic level of education.

 

The two charts come from a new book (available online for free from the London-based Institute of Economic Affairs) by Nina Sanaddaji and Stefan Stefan Fölster.

Here’s how the authors summarize their findings.

A group of low-tax countries has moved to the top in terms of most measures of welfare quality, surpassing high-tax countries such as the Nordics. is is relevant, not least since for a long time the Nordic high-tax models were considered internationally as the best model for welfare delivery. Yet even the Nordic social and economic success was built during periods of low taxes, and stagnated in relative terms after shifting to high taxes. …At the core of this book is a systematic analysis of the available statistical measures that capture the quality of welfare in higher-income countries. …In the overall ranking, Switzerland, Japan and South Korea occupy the top spots. All of these are low-tax coun tries, with a tax burden between 26 and 32 per cent of GDP. By comparison, a high-tax country like Sweden now ranks 12th in terms of overall welfare, …Low taxes are not sufficient on their own to ensure good welfare outcomes.

Given my interests, I especially liked Chapter 7, which investigated the relationship between economic performance and the size of government.

The authors did something I haven’t seen before, which is to measure that relationship by decade.

For what it’s worth, the strongest link was during the 1980s, which may have been caused by both convergence among Asian nations and the pro-growth policies of Thatcher and Reagan.

 

The relationship was still there, albeit not as strong, in the first decade of this century. 

 

At this point, we’re probably looking at a few examples of anti-convergence.

And we’re definitely looking at more evidence that small government is the best way to deliver more prosperity. And to deliver better results for the less fortunate members of society.

That’s the good news. The bad news is that average growth rates for everyone are lower, which is almost surely due to the fact that public policy has moved in the wrong direction this century."

Obamacare’s subsidy cliff: How many enrollees are actually affected?

By Jeremy Nighohossian of CEI.

"Democrats in Congress have put Obamacare front and center in their opposition to the Republicans’ temporary budget. One provision of the American Rescue Plan Act of 2021 intended to provide relief during the pandemic expanded the health insurance premium subsidies created by the Affordable Care Act (ACA or Obamacare) for two years. The goal was to make subsidies more generous for existing recipients and available to those above the original income limit. The Inflation Reduction Act of 2022 extended those subsidies beyond the original expiration date, setting a new expiration date at the end of 2025.

With that deadline looming, Democrats in Congress are seeking another extension and are using the broader budget debate as leverage to win a full or partial renewal of those subsidies.

Because this expiration date is approaching, Americans enrolled in Obamacare and receiving subsidies face a reduced contribution to their premiums from taxpayers. Those below the income cutoff will continue to receive the original level of subsidies set by the ACA, while those above the income threshold will no longer receive subsidies at all. In both cases, the subsidies will revert to pre-pandemic levels.

Because many Americans will see reductions in subsidies, the number of affected individuals has become politically relevant. According to the Centers for Medicare and Medicaid Services (CMS), the agency that administers much of the Affordable Care Act, 24.3 million people signed up for ACA plans in 2025, and 22.4 million were eligible for subsidies.

News reports on the ACA and the shutdown have claimed repeatedly that 22.4 million people would be affected by the expiration of expanded subsidies, but there are many compelling reasons to doubt the accuracy of this figure.

Foremost among these reasons is that both CMS and the Kaiser Family Foundation have clarified that the 22.4 million figure refers to the number of people who signed up during the annual open enrollment period, rather than the number who are actually enrolled at any given time.

Open enrollment numbers can differ from actual participation for several reasons. Some may sign up believing they need coverage but later choose not to use it, and there have also been accusations of improper or fraudulent enrollment. Bloomberg investigated the ACA broker market in Florida and found numerous examples of unscrupulous brokers and other participants exploiting the ACA subsidy system by signing people up without their full consent in order to collect commissions. The system was vulnerable to such abuse because it combined fully subsidized, zero-cost enrollment with minimal oversight.

Under the Trump administration, CMS Director Mehmet Oz has made weeding out abuse one of his priorities, announcing efforts to address 3 million multiple enrollments.

Additionally, Paragon Health Institute has conducted several studies on ACA enrollment. In one study, it found that for certain income groups and states, ACA enrollment exceeded the number of people in those categories. A follow-up study found that the number of ACA enrollees with no claims has surged, which is an indicator, though not conclusive proof, of fraudulent enrollments. Paragon estimates that there are 6.4 million fraudulent enrollments in ACA in 2025.

How these fraudulent enrollments manifest is still an unanswered question. One possibility is that individuals sign up despite being ineligible for subsidies, misrepresenting their circumstances to secure the subsidies. Another possibility, as the Bloomberg article noted, is that brokers sign people up without their full knowledge. As with many government programs, there are strong incentives to exploit vulnerabilities to receive government funding, and the president has motivations that conflict with ensuring program integrity.

Another valuable source of information in this discussion is survey data. While CMS relies on applications from enrollees and brokers, several surveys ask Americans whether they’re insured and where they obtain coverage. The Current Population Survey (CPS), used to calculate the official uninsured rate, also asks respondents annually if they are enrolled in an ACA plan, and even if they receive a subsidy. Survey data cannot always capture the full picture, however, as an individual who lied to qualify may or may not tell a surveyor that they have ACA coverage.

From 2018 to 2021, CMS enrollment numbers tracked with the number of people in CPS’s survey who claimed they were covered by ACA plans, demonstrating the reliability of CPS’s methods.

However, in 2022, the first year CMS’s data would include enrollments based on the expanded subsidies, that alignment broke down. From 2018 to 2020, the two sources differed by only 2-3 million. In 2022, CMS reported 5 million more enrollees than CPS; in 2023, it was 5.3 million; and by 2024, it jumped to 9.6 million. CPS hasn’t released its 2025 survey yet, but the trend suggests an even larger discrepancy. Based on the difference from 2024, the CMS enrollment totals may be overstated by 10.9 million. This means the true number affected by the subsidy expiration would be 11 million, roughly half of the commonly cited number.

Of course, whether the true number is 22 million or 11 million doesn’t affect the broader discussion of who should receive subsidies and how large they should be. Yet the correct number is relevant to the program’s overall cost and significance to the economy and government. In the interest of accurate public debate, the 22 million estimate is highly doubtful and should carry a bold asterisk, if it’s to be used at all."