Democrats for Energy Disarmament

They add AI data centers to their anti-fossil-fuel target list

WSJ editorial. Excerpts:

"critical minerals required for wind, solar and batteries are mostly processed in China using coal power and leach toxic byproducts."

"Permitting delays and litigation hinder the buildout of transmission lines, pipelines, housing, factories, data centers and more. They are also one of America’s biggest liabilities against China."

"They want to expand transmission to connect more solar and wind to grids in Democratic-run states with renewable mandates—and then pass the costs of these projects onto people in other states."

"why are electric rates so much higher in green-energy beacons like California (30.3 cents a kilowatt hour), Massachusetts (31.2 cents) and New York (28.4 cents) than in states like Missouri (11.8), Arkansas (12.4) and Utah (12.9) that rely principally on fossil fuels?" 

The time price of a family meal at McDonald’s is 25% lower than in 1958

Letter to The WSJ.

"Mr. Greene (Bob Greene’s op-ed “When McDonald’s Was an Inexpensive Treat” (March 21)) notes that his family’s entire meal—six hamburgers, four cheeseburgers, four orders of fries and three milkshakes—cost only $2.66 in 1958. With entry-level wages around $1.12 an hour at the time, that put the time price—the amount of labor time required to acquire a good or service—at two hours and 23 minutes.

Today, that same meal costs about $33.47 at my local McDonald’s. But wages have risen too. With average hourly earnings at limited-service restaurants around $18.69, the time price is now only one hour and 48 minutes. That’s a 25% decline in the time price. In other words, for the same amount of time, a worker today can buy 33% more from McDonald’s than in 1958.

McDonald’s isn’t a more expensive treat—it’s a more abundant one.

Gale L. Pooley (he teaches US economic history at Utah Tech University)"

The Social-Media Shakedown Begins

The verdict against Meta and YouTube is a victory for the plaintiffs bar, not for children or society

WSJ editorial. Excerpts:

"Section 230 of the 1996 Communications Decency Act protects internet platforms from being held liable for harm caused by user-generated content."

"the link between youth mental health and social media is complicated. Take the 20-year-old plaintiff identified by the initials K.G.M. in the Wednesday case. She said she started using YouTube at age six and Instagram when she was nine. Both require users to be at least 13 years old, so she broke platform rules and bypassed controls."

"are platforms supposed to prohibit users from posting photos that might make someone feel depressed or insecure?"

"She was also exposed to domestic abuse as a young child"

"parenting plays a critical role in mediating and mitigating the impact of social media. Most children who use social media don’t experience severe problems."

"it’s hard if not impossible to prove that social media caused any given individual’s troubles"

"The evidence presented at trial that executives purposefully designed the platforms to be addictive was weak."

"companies aren’t required to design products to prevent abuse or excessive consumption." 

A minimum wage increase caused prices to rise at fast food restaurants

See The Effects of California's $20 Fast Food Minimum Wage on Prices by Jeffrey Clemens, Olivia Edwards, Jonathan Meer & Joshua D. Nguyen.

"We analyze the effect of California's $20 fast food minimum wage (Assembly Bill 1228), enacted in September 2023 and implemented in April 2024, on consumer prices using the Bureau of Labor Statistics' Consumer Price Indices for food away from home across 21 metropolitan statistical areas. Food away from home prices in California's four in-sample MSAs increased by 3.3 to 3.6 percent relative to 17 control MSAs through December 2024. Our estimates are stable across a number of specifications. Placebo tests on price indices for goods and services that were not affected by the policy, including food at home, show no differential increases in California's MSAs. The price increases we estimate likely arise in part from spillovers to the full-service sector, as well as changes in the production functions and product quality choices of limited service restaurants."

Another Supreme Court Knockout

All nine Justices reject an attempt to expand secondary liability

WSJ editorial. Excerpts:

"provider Cox could be held liable for “contributory” copyright infringement merely because it had knowledge that some of its users were pirating music files."

"“Ordinarily, when Congress intends to impose secondary liability, it does so expressly,” Justice Clarence Thomas writes for the Court. But Congress didn’t do so in this instance, and the Fourth Circuit’s holding “conflicted with this Court’s repeated admonition that contributory liability cannot rest only on a provider’s knowledge of infringement and insufficient action to prevent it.”"

"The provider of a service is contributorily liable for the user’s infringement only if it intended that the provided service be used for infringement"

Or "the party induced the infringement or the provided service is tailored to that infringement"

"Cox didn’t do either." 

Autism-Therapy Firm That Was Paid $340,000 per Patient Is Barred From Medicaid

Indiana officials move to terminate Piece by Piece Autism Centers, cite federal pressure for crackdown after a Journal investigation

By Christopher Weaver of The WSJ. Excerpts:

"Indiana is barring one of the nation’s most expensive autism-therapy providers from billing the state’s Medicaid program two weeks after the company’s practices were detailed in a Wall Street Journal article, state officials said.

The autism-therapy provider, Piece by Piece Autism Centers, received the highest per-patient payments in the country in 2023—about $340,000 on average—according to a Journal analysis of Medicaid billing records.

Piece by Piece did so in part by raising its list prices to levels that allowed it to collect as much as $640 an hour from the state for services that could be performed by a high-school graduate. From 2019 to 2023, Indiana directly paid Piece by Piece $58 million for autism-therapy services, the billing records show."

"In letters sent to Piece by Piece this week, the state [Indiana] said it was revoking the company’s provider agreements for all seven of its centers."

The state "would bar the centers from billing Medicaid"

One official said "“There were no guardrails under the prior administration, and they weren’t doing the job of oversight they should have been doing." 

Related post:

The Boom in Autism Therapy Is Medicaid’s Fastest-Growing Jackpot: Some companies have found lucrative opportunities to capitalize on a growing need, billing long hours and extracting payments as high as $800 an hour (2026) 

‘Renewable’ Energy Gives Us a Crisis

The West handed Iran leverage by deluding itself into believing it could wean itself from fossil fuel

By Brenda Shaffer. She is a faculty member at the U.S. Naval Postgraduate School’s Energy Academic Group and a senior fellow at the Atlantic Council’s Global Energy Center. Excerpts:

"Western countries’ abandonment of fossil fuels left the world’s energy supply vulnerable to disruptions and price increases"

"Despite trillions of dollars in renewable technology investments, fossil fuels accounted for 87% of global energy consumption in 2024, almost unchanged from the 1970s. Global oil, natural-gas and coal demand reached record levels in 2025."

"In 2019 the World Bank halted funding for upstream oil and natural-gas projects. The International Energy Agency’s “Net Zero by 2050” report in 2021 called for no new investments in fossil fuels."

"Had investments continued, Africa could have become a critical energy supplier, and the increased supply outside the Middle East could have softened the effect of current energy disruptions."

"Europe chose to rely on volatile liquefied natural gas supplies from distant regions rather than making long-term commitments to more secure sources such as pipeline gas from Azerbaijan."

"As countries increasingly rely on China for solar panels, wind turbines, electric vehicles and critical minerals, they risk dependence on a single strategic competitor. Electrification also raises the risk of cyberattacks, which threaten the stability of energy infrastructure."

"renewable energy is still dependent on a baseload of fossil fuels" 

Chicago’s Minimum-Wage Retreat

The City Council votes to repeal a law championed by Mayor Brandon Johnson

By Michael Saltsman. Excerpts:

"Servers and bartenders already earn more than minimum wage, especially in Chicago, where a typical restaurant worker reportedly earns nearly $30 an hour between the lower base wage and tips."

"The tipped minimum wage was created nearly a century after the abolition of slavery."

"Between 2015 and 2023, the tipped minimum wage rose by nearly 75%, from $5.45 to $9.48." 

"Once-robust restaurant employment growth in the Chicago metro area, which rose as high as 5.6% in 2015, turned negative in the last years of the decade."

"In the first year after the mayor’s minimum wage hike, new restaurant and tavern licenses—a key indicator of industry health—dropped by more than 8%."

"nearly 500 restaurants closed in the first half of 2025, and 70% of the restaurants that responded to the association’s poll reported cutting staff or reducing employee hours"

"Alderwoman Samantha Nugent, . . . said her constituents were suffering from the mayor’s good intentions" 

AI Titans Work Hard to Discourage Working

New studies demonstrate what should be obvious: Universal basic income programs kill initiative.

By Jason L. Riley. Excerpts:

"Weavers and bank tellers feared for their livelihoods at the time, but the Industrial Revolution led to significantly more hiring in the textile sector, and banks increased employment after ATMs were introduced."

"In recent years more than 150 basic-income pilot programs in 35 states have been initiated. One of the pilots, backed by Mr. Altman, began in 2020 and provided low-income participants in Texas and Illinois with $1,000 a month, while a control group received $50 a month. After three years of payments, researchers found that both groups worked slightly more—which may have resulted from the pilot’s starting during the pandemic and ending as the economy bounced back. But they also found that people who received $1,000 put in fewer hours on the job than people who received $50, suggesting that the higher payments provided a disincentive to work.

Last month, economist Kevin Corinth and Hannah Mayhew of the American Enterprise Institute released a survey of 122 basic-income pilots that took place between 2017 and 2025 in 33 states and the District of Columbia. They reported mixed results. Employment increased in some programs and decreased in others, and the role of the pandemic was difficult to assess.

The pilot programs varied “in their designs, data collection and study quality,” and only 30 of them provided employment outcomes. Hence, the authors counsel against sweeping policy conclusions based on the results. Most experiments were small, and the evaluations “rely exclusively on survey data and are thus subject to reporting bias and non-response bias.” Yet Mr. Corinth and Ms. Mayhew did find that the larger and more credible studies—such as the one Mr. Altman backed—showed that unearned income has a negative impact on a person’s willingness to work."

"President Lyndon Johnson’s War on Poverty in 1964 launched the modern social safety net"

"The welfare system attempted to replace family breadwinners, but it turned out that those breadwinners were providing more than money. The result of these government interventions was more broken homes, antisocial behavior and blighted neighborhoods." 

Andy Beshear’s Hillbilly Education Elegy

The Kentucky Governor with his eye on the White House dissembles about a veto and about us

WSJ editorial. Excerpt:

"Bluegrass State children could use the help. Kentucky fourth- and eighth-grade scores on the National Assessment of Educational Progress were lower in 2024 than in 2013—by 10 points in eighth-grade math and 12 points in eighth-grade reading. In Jefferson County (Louisville) public schools, only 30% of eighth-graders are proficient in reading and 28% in math on state tests.

Mr. Beshear says the Legislature is “quick to blame our public schools for test scores while refusing to give teachers a well-deserved raise,” citing a statistic that average teacher pay in Kentucky is 42nd in the nation. Average state teacher pay was around $58,500 in 2024, compared to median household income of $64,526.

But including benefits, total teacher compensation was an average $94,194, about 10.5% higher adjusted for inflation than in 2006, according to a Bluegrass Institute analysis last year. Meanwhile, total per-pupil funding increased by an inflation-adjusted 40.5% from 2006 to 2023, the institute found."

Hochul Wants a Climate Reprieve

As utility costs soar in New York, she seeks a delay in cap-and-tax

WSJ editorial. Excerpts:

"the Democratic Governor is seeking to walk back her state’s climate mandates"

She wants to "postpone implementation of the state’s cap-and-tax program and CO2 emissions cuts"

which "could increase upstate utility bills by about $4,000 a year and gasoline prices by $2.23 a gallon."

"Manufacturers would have to adopt costly, immature technologies like carbon capture. Gas power plants would be required to shut down prematurely in favor of higher-cost offshore wind and batteries."

"The average winter gas bill for New York City’s National Grid utility customers jumped 25% this year"

"Pipeline constraints have limited supply."

"gas and nuclear plants have been forced to close." 

Per-Task Minimum Pay for Gig Workers?

From Jeffrey Miron. 

"In 2024, Seattle tried to raise wages for app-based workers by requiring that they receive a per-task minimum pay.

By comparing earnings for Seattle workers before and after the law went into effect, a recent study finds that while the policy raised per-task wages,

the increases in base pay per task were partially offset by a substantial reduction in average tips, a major component of delivery pay.

Moreover,

drivers experienced more unpaid idle time and longer distances driven between tasks … [And,] the policy led to a reduction in the number of tasks completed by highly attached incumbent drivers, … completely offsetting increased pay per task and leading to zero effect on monthly earnings.

Yet again, over-zealous intervention backfires."

The Uncomfortable Truth About Immigrants

America’s economy depends on immigrants more than politics admits or acknowledges

By Alvaro Vargas Llosa of the Independent Institute.

"We tend to focus on why immigrants want to come to the U.S., but we talk much less about why the U.S. wants immigrants to come to this country—i.e., why, xenophobic rhetoric notwithstanding, so many Americans have quietly and consistently welcomed them.

The foremost reason for this is simply that Americans don’t want to have babies. For decades now, the fertility rate among native-born Americans has been below the replacement rate (2.1). The gap has widened significantly recently, with the total fertility rate dropping to 1.6 children per woman. Not surprisingly, the native-born work force has diminished by several million since peaking in 2005 and now amounts to less than 140 million. If no foreign workers are added to the economy, in a few years, the labor force will shrink much more dramatically, reflecting the impact of the currently dismal fertility rate.

If all of the growth of the U.S. economy were due to productivity gains, this might not matter. But U.S. productivity gains have been mediocre in recent decades, with a few exceptional periods, and economic growth in several industries still depends on the number of hours worked. This means that without foreign workers, the U.S. economy would be producing far less than the $28 trillion worth of goods and services it now produces.

Between 2000 and 2020, three–quarters of the growth of the U.S. civilian labor force was due to immigrants. These are not statistics made up by foreign or domestic conspirators, but data put out by the U.S. Census Bureau. According to the Bureau of Labor Statistics, 31 million workers are foreign-born, and 15 million are the children of people born outside of the U.S. They explain a good chunk of the size of today’s economic pie.

At the same time, the economy employs about 8 million undocumented immigrants in the kinds of industries you would expect—agriculture, food processing, restaurants, construction, etc. The reason they are undocumented is not that they have a penchant for the underground, but simply that the broken immigration system does not allow demand to meet supply. It is bad enough that so many workers have to labor off the books. The real economic suicide, however, lies not just in trying to expel undocumented workers, instead of making them legal, but in kicking out documented foreign-born workers and their children, as the administration constantly threatens to do. Imagine what would happen to the economy if the government, in a matter of weeks, were to kick out 47 million people of foreign origin. Think of the impact this would have on critical areas such as health care,  where 15 percent of registered nurses and 25 percent of doctors are foreigners.

The borders have effectively been closed for new immigrant workers, except for the tiny quotas still available. (Less than 10,000 low-skilled workers are admitted each year, a ridiculously unrealistic number given the needs of the economy—which likely explains why in 2025, the hospitality industry had one million open positions). If we add this trickle to the shrinking native-born workforce, the result is a looming catastrophe in the not-too-distant future. The net result will not be a shrinking native-born workforce partly offset by a growing immigrant workforce, but a shrinking workforce altogether.

Forget all the other benefits that immigrants bring to a nation. Just think of the economy. Unless productivity were to grow by leaps and bounds in the upcoming years (something it has not done in the last several decades) or native-born Americans were suddenly to experience a reversal of their aversion to having children, the trend is unmistakable—the workforce depends on immigrant labor. Without it, the economy’s ability to produce goods and services, and therefore to raise living standards, will take a nosedive.

This and other considerations should have been taken into account before the U.S. government recently sent several thousand federal agents to Minneapolis, where, incidentally, the immigrant population is small and crimes committed by foreigners are minimal, provoking the crisis that took the lives of innocent American citizens."

Fed’s Defense of IOR Undermined by Weak Treasury Auctions

By Jai Kedia of Cato.

"It is never a good sign when government debt auctions make the news, as was the case this week when the Treasury tried to sell $69 billion in two-year notes. Weak demand for these assets pushed their yield up to 3.9 percent. Ten-year and 30-year Treasury yields spiked, too, and all of this despite the Fed keeping its target rate unchanged at its latest meeting.

The proximate cause for the market’s suppressed bond appetite was rising inflation anxiety tied to Middle East tensions and oil prices. But this episode inadvertently illuminated something more fundamental: a hole in one of the Federal Reserve’s favorite defenses of its interest on reserves (IOR) program.

The Fed’s Substitution Argument

The Fed currently pays banks a risk-free administered rate on trillions of dollars in reserve balances through the IOR framework. When Congress or outside critics raise the cost of IOR, the Fed has a ready response. Its own FAQ webpage on the subject states that if a bank held Treasurys instead of reserves, “the bank would still earn interest paid by the government—both Treasury securities and reserves are government liabilities—and there would be no net effect on interest earned or paid by the government.”

In short, the Fed argues that IOR and Treasurys are fiscal equivalents. Remove IOR, and banks would simply shift into Treasurys. The government would pay interest either way, and taxpayers would be no better off. The substitution argument treats Treasury securities and reserve balances as interchangeable assets that banks would hold at identical yields. But that is not how markets work, nor is it how banks make investment decisions.

We have critiqued this argument and several others in the past, but Tuesday’s auction offers a real-time case study of why this substitution argument is wrong.

Markets Price Risk and Send Signals. IOR Does Not.

When the Treasury auctions securities, it does not set the yield. The market does. Investors, including banks, assess duration risk, inflation risk, liquidity needs, and opportunity costs, and then bid accordingly. If they think the offered yield is too low relative to those risks, they simply don’t bid, or they bid less aggressively. That is precisely what happened at this week’s auction. Inflation uncertainty made investors skeptical that the two-year note was fairly priced, and the auction showed it.

IOR operates entirely differently. The rate is set administratively by the Fed’s Board of Governors. Banks don’t bid; there is no market or auction for these funds. Correspondingly, there is no price discovery nor any mechanism by which banks can signal that the rate is suboptimal. Reserves are overnight liabilities of the Federal Reserve, not term obligations subject to duration or inflation uncertainty. They are, by design, the safest asset in the financial system guaranteed by the Fed’s ability to simply add numbers to banks’ accounts (as inadvisable as it may be to do so).

This is the flaw in the substitution argument. It assumes that if IOR were eliminated, banks would absorb trillions in Treasury securities at whatever yield prevailed, bidding rates down until Treasurys became equivalently attractive. But banks are optimizing investors. They demand compensation for risk. A two-year (or longer) note carries meaningful inflation and duration risk; an overnight reserve balance does not. These are not the same instrument, and rational investors do not price them identically. That price is a signal; while that signal may be costly to the Treasury, it is informative.

The Bottom Line

IOR imposes no market discipline. The rate is set by the same institution that controls monetary policy, paid to the same banks that are counterparties to Fed operations, and bears no relationship to market pricing. It is a transfer, administered by fiat, insulated from the price discovery that makes Treasury markets meaningful. Treating these two instruments as equivalents, as the Fed’s argument requires, ignores economic and institutional differences.

This week’s auction was just an example. It showed that investors care about the conflict in the Middle East. If they were to engage in further Treasury auctions with the money they currently park at the Fed to receive IOR, it might reveal a host of other important signals. For instance, we may discover (as markets demand higher yields) that people have a limited appetite for US debt if the federal government shows no signs of ending its fiscal profligacy. As it stands, the government can simply have the Fed monetize its unending debts under the cover of IOR.

This week’s auctions were, on the surface, a story about oil prices and Middle East risk premia. But it was also a reminder that investors don’t passively accept whatever yield the government puts in front of them. IOR is not a perfect substitute for Treasurys. Pretending they are the same is not a defense of sound monetary policy. It’s a rhetorical sleight of hand."

Contrary to Allegations, the Data Show Little Fraud in Arizona School Choice Program

Education freedom is under attack, including baseless accusations.

By J.D. Tuccille of Reason. 

"Arizona's Democratic Gov. Katie Hobbs has long waged war against the state's school choice programs, reserving particular venom for Empowerment Scholarship Accounts (ESA), which allow much per-pupil education funding to follow students to their preferred schooling. She's been assisted in her crusade by some media outlets which have amplified inaccurate stories about ESAs. But the ESA program remains not just wildly popular but, according to researchers, also well-managed.

Is a Popular Program Rife With Fraud?

"About 2.0% of dollars spent by ESA account holders is for items that are unallowable under program rules," the Arizona Department of Education announced earlier this month in response to allegations of widespread fraud. "In addition, actual fraud or egregious purchases are at 0.3%, according to the same study."

There's a story behind that announcement, as you might expect. It's the tale of a fight over a very popular school choice program that's despised by a few politicians and their supporters.

As of this week, 102,598 Arizona students use ESAs to pay private school tuition, for curriculum, home education, tutoring, and other education expenses. Instead of being locked to specific brick-and-mortar buildings, 90 percent of per-pupil funding is deposited in accounts to be used for permitted expenses by families that want something other than traditional public schooling. ESAs are powerful tools for freeing families from one-size-fits-some schooling, but that liberating power offends proponents of traditional institutions, among them the governor.

A State Program Attacked by State Officials

"While other government entitlements have strict requirements and oversight, the ESA program continues to operate unchecked, squandering taxpayer dollars with no accountability," Gov. Hobbs charged in her State of the State address in January. "It seems like every day, we learn about new shopping sprees happening at the expense of taxpayers…diamond jewelry, high-end clothing and furniture…who knows what taxpayers will be footing the bill for tomorrow?"

Sure enough, on March 4, the Arizona Republic's Alexandra Hardle claimed that "audit data shows over 20% of vendor purchases made with Empowerment Scholarship Account dollars could be barred under the program's guidelines." She added that "records released by the Arizona Attorney General's Office show Arizonans have spent millions of dollars on expenses that appear to fall afoul of the program's guidelines."

Arizona Attorney General Kris Mayes, it should be noted, is another Democrat who has waged a continuous battle against ESAs and against Superintendent of Public Instruction Tom Horne, a Republican, who administers the school choice program. Two years ago, she tried to bury ESA families in requirements for documentation of even minor purchases. She and Hobbs insist all education spending not controlled by government bureaucrats is suspicious, and they're determined to convince the public of that claim by any means necessary.

The ESA Program 'Withstands More Scrutiny Than Many Public Programs'

The Department of Education rebutted the fraud claims, referring to a recent study it commissioned.

Per the department, "the 20% figure represented program participants that ADE [Arizona Department of Education] had selected for risk-based auditing." That is, of expenditures flagged as questionable and put aside for scrutiny, one in five were then found to be disallowed. Across the whole program, the real figure for disallowed expenses, ADE insisted, is the 2 percent mentioned above—and it's mostly unintentional.

"Most are innocent mistakes, such as an error in a form that must be resubmitted, or educational items that are not on the allowable list but that the user could have in good faith believed were permitted. Some examples would be backpacks, lunch boxes and water bottles," ADE added. Horne and company say the figure for intentional fraud is 0.3 percent.

EdChoice, an independent organization that supports education reform, sought to settle the dispute and asked for documentation of ESA participants' educational expenses.

"We were granted access to data on all ESA transactions for the school year 2024-25 (the year prior to the one ADE studied)," according to EdChoice's Susan Pendergrass and John Kristof. "After our review, the ADE's numbers seem plausible. Not only that, but unallowable expenses seem to be almost entirely concentrated in one source, which should make improvements simpler."

To the extent that there's a problem, write Pendergass and Kristof, "essentially all the potentially controversial purchases are found in Amazon transactions" made as education expenses. "Even if every Amazon transaction was eyebrow-raising, we would only be questioning around 7% of the total spend on the program. And not every Amazon transaction was eyebrow-raising." They put the total for questionable expenses at 1 to 2 percent—essentially the same as the ADE study.

"Based on our preliminary research and the Arizona Department of Education's study, the ESA withstands more scrutiny than many public programs," the EdChoice analysts conclude.

It's All Part of the Policy Battle Over School Choice

Now, that's a lot of wading into the auditing weeds for a school choice—or any—program. But Arizona's governor and attorney general can't eliminate ESAs on their own. School choice supporters control the state legislature and aren't about to abolish the program. ESAs currently enjoy 66 percent support among Arizona adults and 75 percent support among parents of school-age children, according to polls.

That means the only way for Hobbs, Mayes, and their friends to kill the ESA program and damage school choice overall in the state is to erode support for portable education funding. They have to convince Arizonans that the program is hopelessly corrupt—even though there's little evidence to support that claim. Only by turning the public against ESAs can they corral some escaped students back into government schools. And their side is desperate as the tide of public opinion turns against them.

"To date, 18 states have programs on the books that make virtually all their students eligible for state funding to use on private school tuition or home-school expenses," EducationWeek's Matthew Stone and Caitlynn Peetz Stephens noted in January. "And every one of those states made their programs universal within the past four years."

Arizona and Florida have been pathfinders in the shift toward education freedom. Opponents of school choice, including Arizona's governor and attorney general, hope that reversing course in a pioneering state can move the whole country back in their direction. Their efforts deserve to fail."

Cray 1978 versus iPhone 2022 (and the astronomical drop in the cost of light over time)

By David R Henderson.

"On January 20, 2024, I posted on EconLog about the differences between a 1978 Cray computer, the most powerful computer at the time, and a 2022 iPhone 13. The latter dominates in every way, and by a very large margin. Here’s my post, edited slightly.

Cray 1978 versus iPhone 2022

If you want to see a truly amazing trip down 44 years of memory lane, check out this comparison of the 1978 Cray computer, at the time the most powerful computer in the world, and the 2022 iPhone. I won’t bother giving you the specifics because the narrator, Dave Darling, does a very good job in a short time.

In talks I gave in the early 2000s in which I highlighted the huge advances in computing, I said that if we had seen the same advances in, say, kidney surgery, you could have decided whether to get kidney surgery–or buy yourself a cup of coffee. Now the comparison would be way more extreme.

The video reminds me of the less spectacular, but still spectacular, effects of the lightbulb that William D. Nordhaus pointed out years ago. Interestingly, in granting him his half of the Nobel Prize in economics, the Nobel committee didn’t even bother to mention what I thought was one of his biggest contributions. Here’s what I wrote on the issue in my biography of Nordhaus in David R. Henderson, ed., The Concise Encyclopedia of Economics:

He showed that the price of light in 1992, adjusted for inflation, was less than one tenth of one percent of its price in 1800. Failure to take this reduction fully into account, noted Nordhaus, meant that economists have substantially underestimated the real growth rate of the economy and the growth rate of real wages." 

Average Wealth for Younger Generations Continues To Exceed Past Generations

By Jeremy Horpedahl.

"Today I am posting an update to the generational wealth chart that I have posted many times in the past. This update brings the data through the 3rd quarter of 2025 for the youngest cohort, which includes both Millennials and a growing part of Gen Z in the data from the Federal Reserve. I am somehow hesitant to post this chart, as it is starting to be data that is less useful as the younger generations age, for two reasons.

The first problem with the data is that the Fed is lumping everyone from ages 18-43 together as one generation. Given that the youngest Millennials were 29 in 2025, we are now including a significant part of Gen Z, which is OK in itself, but it becomes harder to compare with generations that encompass only 16 or 17 years of birth cohorts. Secondly, the data from the Fed’s Distributional Financial Accounts is only benchmarked every three years with the Fed’s more detailed Survey of Consumer Finances. Currently only the 2022 version of the survey is available, which is now probably a bit out of date. Based on past updates, it is entirely possible that it is underestimating wealth for the youngest cohort. But I think we will have much more certainty about this data once the 2025 SCF is available and used as a benchmark for the DFA data.

With all of those caveats aside, here is the updated chart:

 

As I am currently working on a book manuscript using the Survey of Consumer Finances, I will be very excited to finally have the 2025 data available. Until then, this is probably the best intergenerational comparison we can do, and it continues to look very positive for the youngest cohorts. With an average of almost $146,000 of wealth for the combined Millennial/Gen Z cohort, they are well ahead of where Gen X was even in their late 30s, and ahead of Boomers at around age 37 as well. All of this bodes well for young people, despite frequent expressions of pessimism, but we should hold off judgement until the 2025 data is fully updated." 

Cuban infant mortality and longevity: health care or repression?

Gilbert Berdine, Vincent Geloso & Benjamin Powell. Excerpts:

"Centralized planning has disadvantages. Physicians are given health outcome targets to meet or face penalties. This provides incentives to manipulate data. Take Cuba’s much praised infant mortality rate for example. In most countries, the ratio of the numbers of neonatal deaths and late fetal deaths stay within a certain range of each other as they have many common causes and determinants. One study found that that while the ratio of late fetal deaths to early neonatal deaths in countries with available data stood between 1.04 and 3.03 (Gonzalez, 2015)—a ratio which is representative of Latin American countries as well (Gonzalez and Gilleskie, 2017).² Cuba, with a ratio of 6, was a clear outlier. This skewed ratio is evidence that physicians likely reclassified early neonatal deaths as late fetal deaths, thus deflating the infant mortality statistics and propping up life expectancy.³ Cuban doctors were re-categorizing neonatal deaths as late fetal deaths in order for doctors to meet government targets for infant mortality."

"physicians who worried that a mother’s behavior might lead to missing the centrally established targets will prescribe the forceful internment in a state clinic (casa de maternidad) so that they may regulate her behavior.⁴ Physicians often perform abortions without clear consent of the mother, raising serious issues of medical ethics, when ultrasound reveals fetal abnormalities because ‘otherwise it might raise the infant mortality rate’"

"Coercing or pressuring patients into having abortions artificially improve infant mortality by preventing marginally riskier births from occurring help doctors meet their centrally fixed targets. At 72.8 abortions per 100 births, Cuba has one of the highest abortion rates in the world.⁶ If only 5% of the abortions are actually pressured abortions meant to keep health statistics up, life expectancy at birth must be lowered by a sizeable amount. If we combine the misreporting of late fetal deaths and pressured abortions, life expectancy would drop by between 1.46 and 1.79 years for men."

"car ownership is heavily restricted in Cuba and as a result the country’s car ownership rate is far below the Latin American average (55.8 per 1000 persons as opposed to 267 per 1000) (Road Safety, 2016). A low rate of automobile ownership results in little traffic congestion and few auto fatalities." 

"The maternal mortality ratio of Cuba in 2015 was higher than in Latin American countries like Barbados, Belize, Chile, Costa Rica, Mexico and Uruguay (Trends in Maternal Mortality 1990 to 2015, 2015). In terms of healthy life expectancy, Cuba ranked behind Costa Rica, Chile, Peru and Bermuda and marginally surpassed Uruguay, Puerto Rica, Panama, Nicaragua and Colombia"

State records show 89 hospice companies at one Los Angeles office plaza. We went to look for ourselves.

By Laura Geller of CBS News. Excerpts:

"The Merabi Professional Medical Plaza, a three-story, 32,000 square foot stucco and glass office building in Los Angeles, is home to a salon, a law office, a modeling agency, a realty corporation and, also, 89 licensed hospice companies."

"The building is among the most extreme cases of what's known as "clustering" to turn up in a sweeping CBS News investigation — a grouping of large numbers of hospice offices that state auditors consider a major red flag for potential fraud. 

The Van Nuys address for Merabi Plaza appears dozens of times in state records for licensed hospice companies. Inside the building's entry hall, a directory lists numerous  hospice agencies that line the long tiled hallways, although the building's owner claims many are no longer there."

"Auditors said the clustering of so many firms raised concerns because it suggests that "the number of agencies in these areas likely exceeds the number of patients who need services."

Concerns about clustering appear in a 2022 California State Auditor's report, which found that Los Angeles County had experienced a 1,500% increase in hospice companies countywide since 2010. That's six times more hospice providers than the national average, relative to the county's elderly population."

"other warning signs for potential fraud included multiple hospices in one building, geographic clustering, low patient counts, high rates of terminally ill patients later discharged alive, excessive billing and staff shared across multiple companies."

"72 of the 89 registered hospices in Merabi Plaza have at least three of those six potential warning signs."

"regulators visited multiple suites in Merabi Plaza between 2021 and 2025. They found nearly 400 violations at 75 companies"

"Many of the hospice companies in Marabi Plaza have been billing Medicare for years and collecting reimbursements that come from federal tax dollars."

[there are] ""ghost hospices." Those are paper companies that bill the government for patients, even if they don't actually provide any real care."

Newsom’s Climate False Alarms

Global warming isn’t behind California’s wildfires, and fires around the world are declining

By Bjorn Lomborg. Excerpts:

"Age-adjusted heat-related death risk in California has risen modestly in recent decades—enough to account for 90 additional annual deaths"

"Warming has helped reduce age-adjusted cold-related deaths by more than 5,000 a year"

"In the early 2000s, about 3% of the world’s land burned annually—in total acreage, an area about twice Mexico’s size. The trend since has been downward: 2022 hit a record low of 2.169%, and 2025 nearly matched it at 2.198%, the second-lowest."

"global warming isn’t the main driver of fires in North America. Poor planning puts more houses in extreme fire-risk zones. California’s surge in wildfires stems overwhelmingly from poor forest management: decades of fire suppression that built up fuels, with almost no prescribed burns" 

"nearly 20% of the state needs controlled burns to reduce risk, yet only 0.1% to 0.3% receives them annually."

"deaths from fire-related air pollution declined between 2000 and 2019, even as the global population increased over 26%"

"In the early 1900s, nearly 4% of global land burned yearly. Last year, only 2.2% did."

"2024 Nature paper that declared extreme fire events doubled globally from 2003 to 2023. But a subsequent Nature review demolished that claim"

"even if the world’s wealthiest nations made major emissions reductions . . . It would avert less than 0.2 degree Fahrenheit of warming at significant cost" 

The Credit Engine Behind China’s Economy Is Sputtering

Cheap lending to low-quality borrowers renders one of Beijing’s prime policy tools less efficient.

By Joseph C. Sternberg. Excerpts:

"Beijing itself doesn’t believe the economy is improving. Officials this month promulgated a series of economic plans centered on a GDP growth target of 4.5% to 5%, the lowest since 1991. In part that target sends a signal from the senior Communist Party leadership to other officials that Beijing will tolerate some of the pain of an economic adjustment. Local cadres shouldn’t rush to juice the stats with excessive lending and white-elephant public-works projects."

"It’s widely understood that the government economic data concerning GDP growth are a lie intended to flatter the party."

"Since Mr. Xi embarked on the property correction in August 2020, Beijing has tried to steer the economic rebalancing carefully—sometimes allowing fate to run its course by bankrupting some companies or stressing some local governments overexposed to off-balance-sheet real-estate lending, other times arresting the decline with old-style policy hacks such as credit subsidies."

"Evidence is accumulating that Beijing’s firepower is running down"

"the total rate of credit growth is slowing dramatically: to 6.1% year-on-year in January, compared with an average of 9% a year in 2017-24 and 18.1% in 2007-16."

"Some 58% of loans in December were made at interest rates at or below the official benchmark lending rate of 3%"

"that proportion has risen steadily over the past couple years"

"This suggests banks are struggling to find borrowers (read: in the private sector) that could generate returns above 3%, which is remarkable in a developing economy with enormous potential for catch-up growth"

"banks are lending to inefficient state-owned enterprises and investment pools linked to local governments. Cheap lending to low-quality borrowers then weighs on bank profits, hindering future productive lending" 

California’s Never-Ending Race Preferences

Again activists attempt to gut the Golden State’s ban on affirmative action

By William McGurn. Excerpts:

"California’s constitutional battle is rooted in an amendment, Proposition 209, which the state’s voters approved in 1996. Proposition 209 forbids discrimination against or preferential treatment for anyone “on the basis of race, sex, color, ethnicity, or national origin” in “public employment, public education, or public contracting.” That’s clear enough, which is why activists are always trying to gut it."

"The 2023 version of ACA 7 would have allowed the state to fund programs for specific groups “if those programs are established or otherwise implemented by the State for purposes of increasing the life expectancy of, improving educational outcomes for, or lifting out of poverty specific groups based on race, color, ethnicity, national origin, or marginalized genders, sexes, or sexual orientations.” But Fair Admissions made clear that such measures would be unconstitutional."

"So the new ACA 7 involves a change in scope. It would modify Proposition 209 by narrowing the ban on discrimination in “public education” to cover only “higher education admissions and enrollment.” That would open the door to racial considerations in K-12 education and in college and university financial aid."

"“an African American student would be given grants, while a student of any other race would be saddled with student loans, despite having equal (or even greater) financial need.”"

"result of a more generous financial-aid package going to a wealthy black student than to a poor Asian student." 

Gavin Newsom Is Driving Up Gasoline Prices

Californians pay $5.48 a gallon on average—and military jet fuel is getting dangerously expensive

By Allysia Finley. Excerpts:

"While gasoline prices have increased by an average of 74 cents a gallon nationwide over the past month, they’ve shot up 91 cents in the Golden State. “California has experienced much higher price increases than other states because the majority of the state’s gasoline is refined from foreign crude oil sources,” noted Kandace Redd a spokeswoman for the Automobile Club of Southern California."

"About 60% of the crude that feeds California refineries is imported, a third of it from the Middle East. Fifteen percent of its gasoline also comes from overseas"

"Californians paid 90 cents a gallon more than average at the start of his governorship in January 2019, $1.05 more before Russia invaded Ukraine in February 2022, and $1.50 more before the war in Iran started. Now the gap is $1.80."

"Since he became governor, the state’s oil production has plunged 40%, and a quarter of its refining capacity has shut down."

"the culprits: anti-fossil-fuel policies, including the state’s cap-and-tax program, limitations on drilling, low-carbon fuel standard, burdensome permitting and high gasoline taxes."

"California’s gasoline tax—which includes a 61-cent-a-gallon excise tax plus state and local sales taxes—is the highest in the country, and increases every year with inflation."

"its citizens pay less than those in other states into the federal Highway Trust Fund"

"a larger share of Californians drive electric vehicles or rely on public transportation"

"California’s regulatory environment has driven out actors necessary for an affordable energy consumer market,” more than a dozen Democratic state lawmakers wrote to state regulators last week." 

Why Trump’s Move to Lower Oil Prices Fell Flat

It will take time for the largest-ever release from global stockpiles to work its way into the oil market

By Carol Ryan of The WSJ. Excerpts:

"strategic reserves take longer to unlock than commercial stocks, especially if they are in specialized storage facilities. 

The U.S. SPR holds 415 million barrels of crude in 61 underground salt caverns in Louisiana and Texas. But it will be hard to get it out quickly. The Biden administration made a similar-size draw at the start of Russia’s full-scale invasion of Ukraine in 2022, which left the store at just 60% capacity. As more oil is extracted, pressure levels in the caverns fall, which slows subsequent withdrawals.

The SPR also uses the same pipelines and ports as shale producers, so infrastructure to carry the extra oil is constrained. It will take four months to get the full amount to market."

"The SPR was set up after the 1973 oil crisis to prevent the U.S. from running out of physical barrels, rather than to intervene in global oil prices. Such a shortage is unlikely now that the U.S. is the world’s biggest oil producer. From a physical supply perspective, North America is the best-supplied region in the world right now, but is still exposed to the economic fallout of rising global energy prices."

"Releasing barrels from finite stocks has less effect on the oil price than an output increase by the Organization of the Petroleum Exporting Countries normally would" 

Problems with EVs

See Things I Wish I’d Known Before Buying an EV by Christopher Mims. Excerpts:

"Mechanics must be certified to work safely around that high-voltage battery, and must have the know-how to deal with the complexity of these new computers on wheels"

"A typical car takes about five years to fall to 50% of its original value, but recently the value of some EVs had fallen 50% within two years."

"One reason for the rapid depreciation of my 2024 Ioniq 5 is that in October, Hyundai slashed the price of the 2025 and 2026 models by around $9,000"

"there’s a glut of affordable used EVs"

"if you use a home charger along with a standard extension cord that isn’t designed to carry all those amps, you can overheat your outlet"

"If you visit friends who aren’t EV owners, you’re rolling the dice on whether their home’s electrical system can charge your vehicle, even if you bring your own charger"

"some exotic fluids like battery coolant need to be monitored on an EV, and if you have a lead foot, you might burn through tires faster" 

Advice to Trump: Leave the Oil Market Alone

Government controls were responsible for the crises in the 1970s

Letter to The WSJ.

"Allysia Finley (“How America’s Oil and Gas Dominance Has Weakened Iran,” Life Science, March 9) is right to celebrate U.S. energy development but misses an important reason we no longer have 1970s-type energy crises.

The main reasons for the shortages in 1973 and 1979 were U.S. government price and quantity controls on the oil market. Natural-gas prices were also government controlled. While it is true that the Arab embargo of 1973-74 and the Iranian revolution in 1979 did reduce market supply, neither caused the shortages nor the palpable sense of crisis. Had there been no U.S. government controls, the prices of oil and oil products would have risen more and more quickly, but there wouldn’t have been shortages. When controls were lifted in the early 1980s, the age of gas and oil shortages ended.

Ms. Finley includes the first Gulf War alongside the Arab embargo and Iranian revolution. But what happened then proves my point. While prices spiked amid the conflict and Americans feared a return of gas lines, the lines didn’t materialize because prices were no longer controlled. We also didn’t experience supply crises in the 2000s or during the Arab Spring.

Of course, Americans are upset by higher prices, but we’ve lived with high gas and oil prices before and we will again. More worrisome is the report that President Trump wants to do something to lower gas prices. The last time the government “did something” we had oil and gas crises lasting a decade.

My advice: leave the oil market alone.

Prof. Em. Peter Z. Grossman

Butler University" 

ESG May Be Eating Away at Your Investments

Trump and the SEC affirm fiduciary duty, benefiting even shareholders with nonfinancial objectives

By Phil Gramm and Jeb Hensarling. Excerpts:

"Pursuing ESG objectives without the investor’s expressed consent has been part of a thinly veiled attempt by progressives to coerce investment managers and private corporations to advance their political goals and not the investors’ interest. This process began in 2006 when United Nations Secretary-General Kofi Annan announced the Principles for Responsible Investment initiative. Loud activists with anticarbon and pro-DEI agendas have colluded with asset managers to push through hundreds of corporate stockholder resolutions contrary to the financial interests of general investors."

"ESG constraints produce lower returns while delivering few environmental or social benefits"

"ESG investment funds have often fostered the illusion that investors are supporting more “sustainable” environmental outcomes while earning similar risk-adjusted returns. Rarely is that the case over extended periods. ESG investment funds routinely rely on unproven and inconsistent analytics. Weighting investments in companies based on carbon or DEI metrics means, logically, that more important factors of financial performance are underweighted. The predictable financial underperformance of ESG funds is made worse by higher management fees."

"In most ESG investing, no systematic effort is made to verify the claimed nonpecuniary impact of the investment, and government regulators have, as far as we can tell, assumed impact investors have opted out of fiduciary protections. Conflicts of interest among advisers are rampant. Proxy adviser Institutional Shareholder Services, for example, advises companies on shareholder ESG proposals and then turns around and sells the same companies ESG ratings."

"ESG investments are “not making much difference to companies’ actual ESG performance” and that they “perform poorly in financial terms.”" 

Will There Be Enough Workers to Power AI?

The workforce required to sustain AI-driven growth could become difficult to find

Letter to The WSJ.

"Concern that artificial intelligence will wipe out white-collar jobs is understandable (“Tech Firm’s Move Fans New Dread of AI Jobs Wipeout,” Business & Finance, March 2). However, insights from across the labor market suggest a different pattern: AI is reshaping work rather than erasing it, changing the tasks people perform and the skills employers require.

That shift is visible in the demand for the workers needed to build and run the infrastructure behind the AI boom. Scaling AI requires vast physical systems, data centers, energy networks and automated production facilities, and demand for the people who support them is rising rapidly. Randstad analysis of more than 50 million job postings shows demand for robotics technicians has increased 107% since 2022, while demand for heating, ventilation and air-conditioning engineers, essential for installing and maintaining data center cooling systems, has risen 67%.

The effect extends beyond emerging technical roles. As the digital economy expands into the physical world, demand for traditional skilled trades is also climbing, with postings for electricians, welders and construction workers rising as companies invest in the infrastructure required to support AI-driven growth.

At the same time, the talent pipeline for these roles is tightening. Today it takes longer to hire a skilled trades worker than a desk-based professional, reflecting a widening gap between AI ambition and workforce supply. Demographic pressures are compounding the challenge, with fewer young workers entering sectors such as manufacturing, while large portions of the workforce approach retirement.

The real risk isn’t that the economy runs out of jobs, but that it runs short of the people needed to power the AI era.

Sander van ’t Noordende

Chief executive, Randstad" 

Cuban Regime Wants Diaspora to Own Businesses on the Island

In a diplomatic overture, the Communist regime is aiming to open up its moribund economy to the affluent Cuban-American diaspora

By Deborah Acosta, Vera Bergengruen and José de Córdoba of The WSJ. Excerpts:

"Cuba’s communist regime wants to open up its moribund economy to the Cuban-American diaspora, allowing foreign-based entrepreneurs to open up businesses and buy property"

"the government is open to having a fluid commercial relationship “with Cubans residing in the United States and their descendants.”"

"also open to having a relationship with U.S. companies. He said Cuba wants to energize sectors of the Cuban economy ranging from real estate to tourism and infrastructure."

"Under Cuba’s current law, Cuban-Americans can invest in the island only if they re-establish residency in Cuba, which leaves them at the mercy of a totalitarian regime. Removing this and other hurdles could transform the diaspora into a recognized foreign investor class." 

Can You Make the Case for the Drug War by Pointing out a Bad Effect of the Drug War?

By David R Henderson.

"Earlier this week, I was discussing the drug war with a free-market, very libertarian economist. I was opposing it. He said that although he used to favor legalizing drugs, he no longer does. What changed his mind? The horrible consequences of fentanyl in Oregon.

He pointed to the deaths that had occurred because fentanyl was relatively easy to obtain on the street. I responded that you can’t judge the effects of making something legal by pointing to a case where they’re illegal and just assuming that the effects of making them legal would be the same as the effects of keeping them illegal.

First, fentanyl is illegal, even in Oregon, and was illegal even before the legislature reversed some decisions in 2024. Second, the very fact that it’s sold on the street rather than in pharmacies or even Walmart is due to its illegality. If it were truly legal, consumers would know more about what they’re getting and would, therefore, be less likely to overdose.

A good way to see that is to look back to the Prohibition era. Very few people would say that the fact that people could easily get booze in speakeasies meant that producing and selling liquor were legal. They weren’t. Also, because liquor was illegal, you didn’t always know what you were getting. Producers had less incentive than otherwise to establish brand names and advertise. When the production and sale of liquor were legalized in 1933 (thanks, FDR, for one of the few good things you contributed to), deaths from alcohol poisoning fell. It’s reasonable to expect similar consequences from completely legalizing fentanyl."

Opinion: No matter how good AI gets, it won’t beat markets

The economy isn't a vast set of equations. It's a complex discovery process done in real time. Even the best computers aren't up to that

By Peter Boettke. 

"Whenever we see big leaps in computation, would-be central planners come out of the woodwork, claiming this finally makes it possible to organize the economy better than markets do — optimizing tax rates, producing enough to meet our needs, and allocating resources in a way that maximizes well-being for all.

Such arguments gained theoretical prominence in the early 20th century, saw a resurgence with the mid-century advent of modern computing and operations research, and have emerged again with the impressive advance of artificial intelligence (AI).

But this line of thinking rests on a false premise: that an economy is nothing more than a computational problem to be solved with accurate equations and enough data and processing power.

As I argue in a recent paper for the Montreal Economic Institute, this error was understood as far back as the 18th century by Adam Smith (1723-90). In his Wealth of Nations, which just had its 250th birthday, Smith observed that producing even simple goods requires the co-operation of so many different hands that the full network of exchanges would “exceed all computation.” Even the making of a woollen coat, for instance, required farmers, spinners, dyers, merchants, shippers, and so on just to get from raw materials to market.

Such complexity doesn’t stop the coat from being produced. But Smith’s point is that there is no single mind directing every step of production, from raising the sheep to selling you a brand-new peacoat. Instead, it is through the spontaneous co-operation of the many hands and minds that make up the “invisible hand” of the market that such production is possible.

In the late 19th century, Italian economist Vilfredo Pareto (1848-1923) expanded on this point, observing that co-ordinating even a modest economy and matching resources to uses and preferences would soon cause an explosion in the number of equations to be solved. But today’s computers can handle quintillions of computations per second, more than Pareto could possibly have imagined. Doesn’t that make a difference?

This is where Nobel laureate economist Friedrich Hayek (1899-1992) comes in. Hayek explained that the problem is not merely that the relevant knowledge is decentralized — spread out across millions of individuals — but that it is often tacit. Local shopkeepers’ understanding of their customers’ buying habits cannot be translated into one data point to feed into an AI or any other kind of model. Nor can we predict the emergence of an entrepreneur dreaming up a product that did not exist before.

Most important of all is the phenomenon of prices — indispensable signals that guide our decision making. Prices are neither set in stone nor arbitrarily fixed. Instead, they emerge from real exchanges. When the price of wheat rises, it is because buyers and sellers are competing for a limited supply. This price increase signals something about relative scarcity. It also provides an incentive to adjust consumption and conserve the resource, to look for a substitute, to increase production and to innovate.

In short, prices are not lying around in the wild, waiting to be harvested and fed into an algorithm. Rather, they are the result of constantly evolving discovery. Without this process of discovery, the knowledge embedded in a price simply doesn’t come into existence.

Hayek called the price system, with its ability to generate knowledge in the market, a “marvel.” He described competition as a “discovery procedure” that does much more than allocate resources. When entrepreneurs bring new products to market, for instance, they are making informed bets. If they’re wrong, they bear the cost. If they’re right, they reap the rewards. Through this process, we all learn a little more about what is possible, what is valued and what works.

As for AI, it can process truly vast quantities of historical data to detect patterns, forecast trends and optimize within given parameters. But it can only look backward to find data, whereas economic life is forward-looking and creative. The growth of the social-media influencer market, to choose but one example, could hardly have been predicted by an algorithm 20 years ago. In the same way, today’s algorithms can’t accurately predict what or how much we’ll consume tomorrow, since much of what will matter tomorrow hasn’t been imagined yet.

As powerful and helpful a tool as AI can be to improve logistics, better manage inventories and analyze markets, it remains just that, a tool. It can help us gain a better understanding of markets but only markets themselves can predict and co-ordinate the results of the billions and billions of voluntary exchanges that take place every day."

Ridley: Ehrlich's anti-human legacy

By Matt Ridley.

"The butterfly biologist turned rock-star eco-pessimist, Paul Ehrlich has died at the age of 93. That in itself is remarkable because in 1970 he forecast that within the coming decade “100-200 million people per year will be starving to death” and “by 1985 enough millions will have died to reduce the earth’s population to some acceptable level, like 1.5 billion people”. Furthermore, by 1980 the life expectancy of the average American would have fallen 42 years as a result of cancer caused by pesticides.

Yet he not only lived more than 50 years longer than 42; he lived to be one of more than 8 billion people in a world where global life expectancy has increased at the average rate of seven hours per day since he forecast it would collapse. Meanwhile, famine has all but gone extinct, with death rates from mass starvation down to a tiny fraction of what they were in the 1960s. Here are the astounding numbers: in the 1960s, 29.7 million people out of a population of 3 billion died in famines that killed more than 100,000 people each. In the 2010s, 1.1 million out of a population of more than 8 billion died in such episodes: a decline of 99% in the death rate.

In short, Ehrlich was wrong. Not, as the New York Times said in its obituary this week, “premature”, but radically, completely, spectacularly wrong. He was wrong as soon as he put pen to paper and went on being wrong for decades afterwards. He shot to fame with a best-selling book in 1968, The Population Bomb, whose prologue dismissed all hope for humankind: “The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate.”

Yet something did prevent that. Even as he wrote these words, the world’s population growth rate was falling. New strains of wheat and rice developed by agronomists like Norman Borlaug were starting to transform the productivity of agriculture and India was on the way to banishing famine and becoming a food exporter within a few short years. The amount of food available has increased faster than population on every continent over the last 60 years even as the land area devoted to farming has begun to fall. As so often with environmental pessimism, Ehrlich’s warning was already out of date when it was made.

For the rest of his life Ehrlich remained adamant that he was not so much wrong as…right. In 2008 he was still predicting “an unhappy increase in the death rate”. In 2023 he tweeted plaintively: “If I’m always wrong so is science, since my work is always peer-reviewed, including the POPULATION BOMB and I’ve gotten virtually every scientific honor. Sure I’ve made some mistakes, but no basic ones.” He was indeed laden with honors when he died: including a MacArthur “genius” award in 1990 and honorary membership of London’s Royal Society in 2012 - despite forecasting in 1970 that “If I were a gambler, I would take even money that England will not exist in the year 2000.”

Getting things wrong is clearly very rewarding. But his words had consequences. For many people, the misanthropy and cruelty of his political recommendations were less forgivable than his failed forecasts. His book began with an evening in Delhi when he found the press of people overwhelming. “People eating, people washing, people sleeping. People visiting, arguing and screaming. People thrusting their hands through the taxi window, begging. People defecating and urinating.” The answer to his culture shock, he argued, was coerced, compulsory population control. “The operation will demand many brutal and heartless decisions. The pain may be intense.”

Food aid to India should be made conditional on forcible sterilisation of all those who had three or more children: “coercion in a good cause”. Ehrlich was “astounded” that libertarians objected when the American government took up his suggestion. In 1975 Indira Gandhi was refused World Bank loans unless she began sterilising people. Her son Sanjay obliged, making permits, licences, rations and even housing applications conditional on sterilisation. Eight million people were sterilised. Yet one of the greatest causes of the falling birth rate in the world over the past half century has been kindness, not cruelty: the prevention of child mortality. When mothers can be confident of their children surviving, they plan smaller families.

For Americans, too, Ehrlich recommended coercion and control. In an interview in 1970 he said that television programs should be ordered by the federal government to show large families always in a “negative light”. Commercials should relentlessly shame such people. If that did not work, the government should give women a “bonus for not having babies” or “change the tax structure” to punish the fertile, and if necessary, “legislate the size of the family” and “throw you in jail if you have too many” children.

Immensely influential, Ehrlich set the dirigiste tone for the nascent environmental movement, which saw people as the problem, economic growth as a crime and coercion as necessary. As Ehrlich’s attention switched to the running out of resources in the late 1970s, the economist Julian Simon called his bluff. In 1980 he offered Ehrlich a bet: that the price of a $1,000 basket of five metals (to be chosen by Ehrlich) would fall in real terms by 1990 because human ingenuity meant the world was getting better at finding such resources. The loser was to pay the difference in the price of the basket.

Ehrlich rushed to accept Simon’s “astonishing offer before other greedy people jump in” though he later dissembled that he had been “goaded” into the bet. He chose chromium, copper, nickel, tin and tungsten, with $200 invested in each. But when 1990 came round it was Ehrlich who owed Simon $576.07, all five having fallen in price. Ehrlich would have lost even without taking inflation into account. Grudgingly he made his wife write out the check, before delivering a speech in which he said of Simon, “the one thing we’ll never run out of is imbeciles”.

On my bookshelf stands the Julian Simon award, which I won in 2012 and which is made of the five metals. Simon, who was just three months older than Ehrlich, died at the age of 66 in 1998, far too young. He was never a celebrity." 

The Long Shadow of COVID School Closures

By Jeffery L. Degner of AIER. Excerpts:

"Early studies on the impacts of the lockdown were published by the National Institutes of Health (NIH) just months after schools shut down. Students from low-income households suffered the greatest learning losses, similar to those seen after “shutdowns owing to hurricanes and other natural disasters.”

Two years after the lockdowns took effect, further data collected by the National Center for Education Statistics (NCES) reported in an understated way, “the pandemic has potentially impacted achievement and opportunities to learn.”

As was expected, access to the appropriate tools was one of the key drivers for worsening academic outcomes for poor children. The “digital divide” became common parlance among educators who recognized the importance of the issue. This was a critical issue, since at the outset of the lockdowns, 77 percent of public elementary and secondary schools moved online, and 84 percent of college students reported that “some or all classes moved to online-only instruction.” 

Low-income households either lacked internet access at home or the hardware necessary for younger students to join class meetings or effectively participate in online learning. In fact, among households below the poverty line, nearly two-thirds lacked either a computer or adequate broadband speed for children to participate in class or finish homework.

Studies conducted by the Brookings Institution provided some of the most stark statistics in terms of poorer students falling farther behind their wealthier peers. For example, elementary schools with higher rates of poverty saw test score gaps compared to wealthier districts increase by 20 percent in math and 15 percent in reading in the 2020-21 academic year. In other words, performance fell further behind and persisted for at least 18 months. 

In the broader statistics, elementary scores on standardized tests saw their worst outcomes in 2023, and except for 4th-grade math scores, only 2022 was worse." 

"High school upperclassmen who were gearing up for college entrance exams became ill-prepared. In a tremendous irony, test scores moved in the opposite direction of their high school GPAs. For educators on the ground, the explanation was obvious. With many districts mandating that teachers pass their students on through “no fail” policies that were either explicit or implied, regardless of their actual performance, their grades were naturally higher than would have otherwise been the case. Couple that with weaker learning, and the College Board’s report makes complete sense. Grade inflation in the classroom and a dropoff in actual learning was the predictable result."

"Mental health was severely damaged by school closures. A study released in 2023 showed that alongside significant educational losses, there was a rapid increase in anxiety and depression, especially among middle and high school students."

95% of economists disagree that a cap on US gasoline prices would lower prices at the pump without creating scarcity

A tweet from Jack Salmon of Mercatus. 

"Poll of 45 U.S. economists

A temporary cap on US gasoline prices would substantially lower prices at the pump over the next six months without creating scarcity.

95% Disagree
0% Agree
5% Uncertain"

 

Understanding Demonic Policies (concentrated benefits and dispersed costs lead to an expensive welfare state)

By Alex Tabarrok. 

"Matt Yglesias has a good post on the UK’s Triple Lock, which requires that UK pensions rise in line with whichever is highest: wages, inflation, or 2.5 percent. Luis Garicano calls this “the single stupidest policy in the entire Western world” — and I’d be inclined to agree, if only the competition weren’t so fierce.

The triple lock guarantees that pensioner incomes grow at the expense of everything else, and the mechanism bites hardest when the economy is weakest. During the 2009 financial crisis wages fell and inflation declined, for example, yet pensioner incomes rose by 2.5 percent! (Technically this was under a double-lock period; the triple lock came slightly later — as if the lesson from the crisis was that the guarantee hadn’t been generous enough.)

Now, as Yglesias notes, if voters were actually happy with pensioner income growing at the expense of worker income, that would be one thing. But no one seems happy with the result. The same pattern is clear in the United States:

As I wrote in January, there is a pattern in American politics where per capita benefits for elderly people have gotten consistently more generous in the 21st century even as the ratio of retired people to working-age people has risen.

This keeps happening because it’s evidently what the voters want. Making public policy more generous to senior citizens enjoys both broad support among the mass public and it’s something that elites in the two parties find acceptable even if neither side is particularly enthusiastic about it. But what makes it a dark pattern in my view is that voters seem incredibly grumpy about the results.

Nobody’s saying things have been going great in America over the past quarter century.

Instead, the right is obsessed with the idea that mysterious forces of fraud have run off with all the money, while the left has convinced itself that billionaires aren’t paying any taxes.

But it’s not some huge secret why it seems like the government keeps spending and spending without us getting any amazing new public services — it’s transfers to the elderly.

The contradictions of “Elderism” are an example of rational irrationality. Individual voters bears essentially no cost for holding inconsistent political beliefs — wanting generous pensions and robust public services and low taxes is essentially free, since no single vote determines the outcome. The irrationality is individually rational and collectively ruinous. Voters are not necessarily confused about what they want; they simply face no price for wanting incompatible things. Arrow’s impossibility theorem adds another layer: even if each voter held perfectly coherent preferences, there is no reliable procedure for aggregating them into a coherent social choice. The grumpiness Yglesias documents may not reflect hypocrisy so much as the incoherence of demanding that collective choice makes sense — collective choice cannot be rationalized by coherent preferences and thus it’s perfectly possible that democracy can simultaneously “choose” generous pensions and “demand” better services for workers, with no mechanism to register the contradiction until the bill arrives."