Claims that government-funded centre-based daycare and pre-kindergarten programs promote positive early-childhood development unsubstantiated; research remains inconclusive

By Ben Eisen of The Fraser Institute.

The Impact of Daycare Participation on Children's Development: A Review of Recent Evidence

• In recent years, Canadian governments have made large financial commitments to expand access to and participation in formal daycare centres. One of the stated rationales for these expenditures is that they will have a positive impact on child development.
• This study examines that premise by reviewing recent empirical research on the effects of participation in centre-based daycare and pre-kindergarten programs on child development.
• The review is illustrative rather than comprehensive. We selected studies based on their prominence, methodological credibility (randomized, quasi-experimental, or meta-analytic designs), and policy relevance.
• The results from the studies examined here are mixed. One study from Boston shows significant positive effects from childcare participation on academic attainment. But other studies from New Haven and Ontario as well as a meta-analysis from across OECD countries show null or mixed effects on child development outcomes. Studies from Quebec and Tennessee show negative results.
• Taken together, the recent evidence remains inconclusive about whether participation in formal childcare has an effect on children’s well-being and by how much. On balance, the studies reviewed here support the long-standing reality that evidence about the developmental effects from participation in centre-based childcare are mixed, often modest, and contingent upon a wide variety of factors.
• Policymakers should therefore be modest about any claims they make about the developmental effects from government expenditures designed to expand participation in centre-based daycare.

Friedman on Immigration: Setting the Record Straight (or why the “keyhole solution” of allowing immigration with restricted access to government benefits might be a good idea)

Christopher Freiman. 

"Even people who are otherwise enthusiastic about a free market in labor can get cold feet about immigration once redistribution enters the picture. Some are fond of quoting Milton Friedman, who famously (or infamously) said:

“It’s just obvious you can’t have free immigration and a welfare state.”

On this view, immigration is fine under fully free market institutions, but in the actual world with its abundant government-provided benefits, immigration restrictions are justified to protect taxpayers from the added expense that could arise if immigrants consume these benefits. But this conclusion is too quick, and even Friedman’s position is more nuanced than people on both sides of the immigration debate tend to realize. 

An initial point, though: the concern about the fiscal cost of immigration is overstated. For one reason, in the United States, most welfare spending goes to the very young or the very old. Immigrants, by contrast, are disproportionately of working age.  

Setting that point aside, Friedman’s own view wasn’t that immigration as such is harmful. He argued that legal immigration is the problem, precisely because it allows immigrants to access government benefits. By contrast, he thought illegal immigration was beneficial. As he put it: “It’s a good thing for the illegal immigrants. It’s a good thing for the United States. It’s a good thing for the citizens of the country. But it’s only good so long as it’s illegal.” Friedman’s reasoning was that illegal immigration enables mutually beneficial market exchange while limiting immigrants’ access to government benefits.

Now, many fiscal conservatives balk at Friedman’s recommendation—namely, if the overconsumption of government resources is the problem with lawful immigration, the solution is to encourage people to break the law. I understand this reaction, but I admit I don’t share it. In my view, whether it’s okay for someone to do something doesn’t depend on whether lawmakers give them written permission. For instance, did you know that it’s against the law to drive on Cape Cod’s National Seashore’s beach if there’s not a tire-pressure gauge in your car?  Nevertheless, I have no moral objection if you drive on the beach gaugelessly. Regardless of whether government officials approve, this is just a peaceful activity that doesn’t violate anyone’s rights.

Maybe you disagree with me. Still, as others have suggested, there’s another way to accommodate Friedman’s general idea: admit immigrants as lawful permanent residents but restrict their access to certain government resources. Economists sometimes call this a “keyhole solution”—if the problem is immigrants’ consumption of benefits, then design a policy that narrowly targets that problem rather than restricts their freedom to immigrate entirely. 

The main objection to this sort of policy seems to be moral rather than economic. Indeed, Friedman himself was asked about it and he replied that he found the proposal unappealing partly because it’s not “desirable to have two classes of citizens in a society.” That’s a good point. It’s unfair for a government to give some citizens taxpayer-financed benefits but not others. If two people live, work, and pay taxes within a country, government officials should treat them equally, which involves giving them both equal access to government resources. 

Notice, though, that a policy of immigration restriction also treats citizens and prospective immigrants differently—it gives citizens, but not immigrants, access to domestic labor markets, private associations, educational opportunities, and more. Consequently, a principle of equal treatment actually seems to imply open borders. Given that Friedman rejects this option, the task becomes that of identifying the second-best solution. (Also, it’s not clear that Friedman can square his objection to keyhole solutions with his endorsement of illegal immigration, which would presumably also create two classes in a society.)

Why think that a policy of open immigration with restricted access to benefits is better than outright exclusion? The reason, in brief, is that admission with conditions treats prospective immigrants betterthan exclusion. A policy of open immigration with restricted benefits at least gives people the option to move, and it’s hard to see how giving someone a new option could make them worse off.

Here’s an analogy. Suppose John is entering the job market. One employer offers him a job with health insurance and a retirement plan. The next day, he receives another offer—this one comes with no benefits, but a much higher salary. Even if you think he should take the first job, it seems perfectly permissible to offer him the second. John is no worse off for having another option. If he doesn’t want to take it, he can simply decline it. And if he does prefer higher pay without benefits, he’s clearly better off for having the option.

John’s case is analogous to the case of a prospective immigrant who expects to earn significantly more by moving to a country where her access to government benefits is limited. If she prefers having access to a wider range of government-provided benefits in her current country to having higher earnings but fewer benefits in a new country, she can decline to move; in this case, she is no worse off for having the option. But if she prefers higher earnings with fewer benefits, the option makes her better off.  Just as it’s permissible—indeed, probably good—to offer John the extra option, so too is it permissible to offer prospective immigrants the extra option. 

It’s also worth highlighting another important aspect of restricting immigrants’ access to benefits rather than restricting their movement entirely. Admitting immigrants as lawful permanent residents removes the threat of deportation, among other consequences, that accompanies undocumented entry into a country. Even if you agree with Friedman (as I do) that the keyhole solution of admitting immigrants with reduced access to benefits isn’t totally fair, it’s still more fair than denying prospective immigrants the option of safely moving at all."

The Editorial Board of the Washington Post explains what shouldn’t – but, alas, what nevertheless today does – need explaining: Government-run grocery stores will fail to improve the lives of their customers

From Cafe Hayek.

"The economics of public stores are fraught. By lowering prices below the market rate, stores struggle to fulfill surging demand and shortages become inevitable. That was the case at Kansas City’s Sun Fresh Market, which closed last year after wasting $18 million of taxpayer money.

Sourcing and stocking perishable food products is a complex business with notoriously thin profit margins. Despite claims by progressives that grocery stores price-gouge, profit margins usually fall between 1 to 3 percent. Partly that is due to shoplifting. Finding good real estate will also be costly in a city with scarce availability. (Whole Foods is owned by Amazon, which was founded by Post owner Jeff Bezos.)

Promising free stuff sounded nice on the campaign trail, but someone needs to pay for it. When his predecessor tried to trim spending on libraries, Mamdani called it “cruel.” Now that he’s in charge, his preliminary budget plan calls for nearly $30 million in library cuts. Those and many other cuts are probably necessary to get the bloated city budget on a more sustainable footing.

…..

The mayor has said before that his grocery idea would be “political experimentation.” But as the Big Apple faces a $5.4 billion budget shortfall and Mamdani threatens a 9.5 percent hike in property taxes, it’s foolish to spend money studying a foregone conclusion."

Would Adam Smith Support the Jones Act?

Why The Economist is wrong about Smith’s stance on protectionist maritime laws.

By Caleb Petitt of The Independent Institute. 

"In an article in The Economist, it was claimed that Adam Smith would likely have supported the Jones Act because he supported the Navigation Acts. This claim is wrong on two counts. First, the idea that Smith supported the Navigation Acts is either overstated or entirely false. The Navigation Acts did not have a single aim or apply to a single sphere of commerce. Rather, they were seen both as promoting defence and opulence, and the clauses can largely be divided into those that apply to trade with Europe and those that apply to their colonies. There are four combinations of spheres of regulation and reason for regulating that could have been used to support the Navigation Acts: (Colonies, Opulence), (Colonies, Defense), (Europe, Opulence), and (Europe, Defense).

Smith clearly rejected support for the Navigation Acts for three of the four reason-sphere combinations. He advocated the relaxation or repeal of the Navigation Acts as regulations on the colonies, rejecting them as sources of defense and opulence. He also clearly stated that the Navigation Acts, as they related to European trade, were harmful to British opulence, leaving only European regulations for defensive purposes as the only possible justification for the Acts.

The European regulations were also meant to regulate trade specifically with the Dutch, not European trade generally. Smith acknowledged that the Navigation Acts were targeted at the Dutch, but also believed that they had not hindered Dutch trade, had not helped England in her wars against the Dutch, or reduced Dutch naval power. The Navigation Acts targeted the Dutch because the Dutch were the principal country engaged in the carrying trade, a country moving goods between two foreign countries, which was seen at the time as a uniquely beneficial manner of trade. That means Smith undermined a reason for supporting the Navigation Acts when he argued against the idea that there was anything special about the carrying trade.

Smith’s acknowledgment and emphasis of the point that the Navigation Acts were targeted against the Dutch also undermined support for the Navigation Acts further undermined support for them. The Dutch were strong rivals and dangerous enemies when the Navigation Acts were passed. But since then, Dutch and English interests were harmonized with the Glorious Revolution, which positioned France, not the Netherlands, as England’s chief rival. Even if Smith thought the European regulations in the Navigation Acts were effective, which appears unlikely, he certainly saw that the regulations against the Dutch were outdated in the wake of the Glorious Revolution. 

Second, regardless of Smith’s view of the Navigation Acts, Smith would be appalled by the Jones Act today because the empirically demonstrable impacts of policies shaped his policy views. You could not simply say a restriction on free trade was justified for national defense to get Adam Smith on your side; you had to show that it worked. 

For example, Smith was very critical of the herring bus bounty, which was said to improve Britain’s defense by increasing Britain’s sailors and shipping. He did not say that defense was a bad justification, but said that the bounty was too large, that it encouraged fraud, that it was not well adapted to the Scottish mode of fishing, and that it increased the price of a staple food. 

If Adam Smith looked at the impact of the Jones Act today, he would see that Jones Act vessels cost dramatically more to build than comparable foreign ships, they drive up prices, particularly in non-contiguous states and territories, and that the American ship-building industry is virtually non-existent. It would be easy for Adam Smith to see that the Jones Act has not established America as a ship-building nation, has not promoted its defense, and has done more harm than good."

Should Policy Restrict Share Buybacks?

By Jeffrey Miron.

"Many politicians believe that corporate share buybacks create “perverse” incentives for firms to prioritize short-term investments over future ones. The 2022 Inflation Reduction Act included a 1 percent tax on all buybacks, and President Trump recently issued an executive order to prohibit share buybacks for underperforming defense contractors.

Recent research, however, shows that

legalizing share repurchases increased investment by 8.0–9.8 percent among public firms … [and] improved public companies’ access to equity capital.

Moreover, the firms receiving these investments

tended to be younger, smaller, and higher-growth, and typically held less cash … suggest[ing] that legalizing share repurchases allowed capital to flow from cash-rich, mature firms to cash-needy firms with greater growth opportunities.

These results make sense: Shifting cash from firms that do not have immediate productive uses to firms that do is good for economic efficiency. Inhibiting this shift stifles corporate investment and growth."

Jason Furman on AI contestability

From Marginal Revolution.

"This ease of switching has forced companies to pass the gains from innovation on to users. Free tiers now offer capabilities that recently would have seemed almost unimaginable. OpenAI pioneered a $20-per-month subscription three years ago, a price point many competitors matched. That price has not changed, even as features and performance have improved substantially.

One recent analysis found that “GPT-4-equivalent performance now costs $0.40/million tokens versus $20 in late 2022.” That is the equivalent of a 70 percent annual deflation rate — remarkable by any standard, especially in a time when affordability has become a dominant public concern.

And this is only the foundational model layer. On top of it sits a sprawling ecosystem of consumer applications, enterprise tools, device integrations and start-ups aiming to serve niches as specific as gyms and hair salons.

Users aren’t the only ones switching. The people who work at these companies move from one to another, a sharp contrast to work in Silicon Valley during the era of do-not-poach agreements."

The Atlantic’s Critique of Homeschooling Ignores the Real Education Crisis

By Corey A. DeAngelis. Excerpt:

"The Atlantic recently ran a story headlined “He Was Homeschooled for Years, and Fell So Far Behind.” It profiles Stefan Merrill Block, who was homeschooled in his early years and later struggled to catch up once he entered traditional schooling. But one rough experience doesn’t invalidate an entire movement that is delivering superior results for millions of families across the country.

Homeschool students are outperforming kids in government schools by a wide margin. Brian Ray’s peer-reviewed systematic review in the Journal of School Choice examined dozens of studies on the topic. Seventy-eight percent of those studies found homeschoolers scoring significantly higher academically than their public school peers. They beat traditional school kids by 15 to 25 percentile points on standardized tests. These solid results hold up regardless of family background, income level, and whether the parents ever held a teaching certificate.

Government schools deliver exactly the opposite outcome. In Chicago alone, there are 55 public schools where not a single kid tests proficient in math. They spend about $30,000 per student each year and still fail to produce basic proficiency. The Nation’s Report Card shows nearly 80 percent of US kids aren’t proficient in math. That’s the real crisis staring us in the face, and it demands accountability from the system that claims to serve our children."

Better defined property rights improve economic growth

Tweet from Vincent Geloso.

 

Hold Harmless for Whom? The Impact of COVID Era Policies on School Funding, Teachers, and Students

Michah W. Rothbart, Samantha Cervantes, and Amy Ellen Schwartz of Syracuse University.

"Abstract 

This study evaluates the fiscal and academic consequences of New York City’s hold harmless policy during COVID-19, which aimed to stabilize school expenditures amid unexpected enrollment declines by restoring schools’ funding up to initial levels. We examine how school racial composition predicts whether or when schools receive hold harmless “treatment” and assess the impact of hold harmless on financial resources, staffing, and student outcomes, exploring heterogeneity by timing of policy announcement. Although schools with higher White student shares were no more likely than those with higher Hispanic or Black shares to receive hold harmless funds, schools with higher Black shares that did receive them saw larger per-pupil allocations due to deeper enrollment losses. Overall, hold harmless schools experienced significant increases in per-pupil spending, and reduced pupil-teacher ratio and class size, while maintaining the size of the teaching workforce. We find hold harmless had no effect on attendance or chronic absenteeism in 2021 or 2022, but improved both in 2023, when it was announced earlier. Although funds often rolled over to later years, we find no corresponding gains in student outcomes. Overall, the policy effectively preserved school-level spending and staffing – as intended – with some improvements in student outcomes when announced early."

End the SEC’s Access Rule, Don’t Mend It

Activists love it, but it is counterproductive, has no basis in statute, and could be unconstitutional

By Joseph A. Grundfest. He is a professor emeritus at Stanford Law School. He served as an SEC commissioner, 1985-90. Excerpts:

"Investors owning as little as $2,000 of a company’s stock—about 16 billionths of the average market capitalization of an S&P 500 company—can force a vote. Average monthly rent for a New York City apartment is roughly $3,500, 75% more than the rule’s minimum. This holding requirement might be the only thing in America not suffering an affordability crisis.

Only 11% of the proposals that proceeded to a vote in the 2025 proxy season gained majority support from voting stockholders. If a proposal is approved, the corporation’s board typically declines to implement it anyway. The Access Rule thus generates toothless, performative votes.

The rule is wildly popular with governance gurus and policy advocates. It’s a free soapbox that forces management to address issues they’d rather not discuss. To buy peace, executives will often make concessions in exchange for the activists’ withdrawing their proposals. If a proposal fails, activists still demonstrate to supporters a willingness to confront the corporation. Just because a proposal is performative doesn’t mean it’s ineffective."

"The Access Rule . . . commandeers the corporate proxy to compel votes on shareholder proposals, an encroachment not authorized by federal securities law." 

Governors Who Refuse Education Dollars

Not surprisingly, they’re pandering to teachers unions

By Daniel Lipinski. Mr. Lipinski, a Democrat, represented Illinois’s Third Congressional District 2005-21. He is a fellow at the Hoover Institution and the University of Dallas. Excerpt:

"Scholarships can be granted to cover a variety of education expenses. While many will fund tuition aid, scholarship nonprofits can choose to help families pay for tutoring, education technology, special-education services and other expenses. Eligibility will be limited to households earning less than 300% of the area’s median income, but many programs will likely focus on those most in need.

Teachers unions are pressuring Democratic governors to reject this golden goose. Their virulent opposition is revealing. Extra resources are what educators say they want. So why do their unions oppose receiving them? It seems they so abhor the idea that a scholarship might help parents choose which school their child goes to that they are willing to reject support for students in their own members’ classrooms."

The Embarrassing Truth About Tariffs

Why is Trump so upset about Federal Reserve economic research into his trade policies?

WSJ editorial. Excerpts:

"American households and businesses are bearing nearly 90% of the cost of the Trump tariffs"

"Kevin Hassett, director of the National Economic Council, took to CNBC Wednesday to pan the New York Fed research as “the worst paper I’ve ever seen in the history of the Federal Reserve System” and suggested the people who wrote and published it should be “disciplined.”"

"The Fed analysis aligns with other research into the distribution of tariff costs from Harvard economists and Germany’s Kiel Institute—and with common sense. There isn’t widespread evidence that foreign producers are cutting their prices to offset the tariffs"

"Nor is the dollar strengthening, which is the other possible mechanism for making foreigners pay"

"tariffs are causing an increase in post-tariff prices of those goods that are still imported"

"Americans pay higher prices, or “pay” in the form of less choice."

"he said last year that Americans may have to buy fewer dolls for their children as a result of his trade policies"

"So far the manufacturing boom Mr. Trump promised hasn’t appeared, as manufacturing jobs are down over the last year."

"To the extent American companies eat some of the costs of tariffs, that’s less cash available for investment and hiring." 

"The market response to his April 2025 “liberation” tariffs was so negative that the President quickly withdrew them and negotiated lower tariffs"

"He has also laced the tariffs with multiple exemptions." 

State promotion of small-holder agriculture; state promotion of manufacturing; and state controls over finance, especially capital controls DID NOT cause rapid growth in four African countries

See ‘How Africa Works’ Review: Policies and Prosperity; Four African countries—Botswana, Ethiopia, Mauritius and Rwanda—experienced rapid per capita growth. How did they manage it? William Easterly reviewed the book How Africa Works: Success and Failure on the World's Last Developmental Frontier by Joe Studwell. Excerpts:

"the successful countries were, surprisingly, not very good at following his preferred policies. Botswana’s government promoted neither small-holder agriculture nor manufacturing. Mauritius and Rwanda ended capital controls long ago. Mauritius also successfully promoted manufacturing until it did not, and the share of manufacturing in the economy fell to 11% in 2020 from 20% in the 1980s. The author gives Rwanda a tepid grade on the three policy approaches."

"Ethiopia’s government promoted manufacturing with some successes in cement and floriculture, but its leading state enterprise asked North Korea for help to build 10 sugar mills as part of a vast sugar-development project. (It did not end well.)"

"As for the nonsuccesses, Mr. Studwell notes that some of the three policies were followed there, too. Promoting manufacturing has been a popular idea throughout Africa for decades. Ghana’s enthusiasm for manufacturing contributed to the long decline of its economy, from independence in 1957 to the 1980s. As the author notes, the country encouraged the assembly of automobiles, from kits of car parts, when the value of a finished car was sometimes less than the cost of the parts kit. The author worries that Ghana is repeating this automobile nonsuccess today."

"Nigeria’s Ajaokuta steel plant, which cost billions of dollars but never got around to producing any steel."

"Capital controls were also popular among the nonsuccesses. The author notes how the International Monetary Fund insisted on removing capital controls in the majority of African countries in the 1990s, an indication that the restrictions were widespread at the time. He does not note that these capital controls often went to extremes. When inflation is high, controlled interest rates are far lower than inflation, and capital controls are fierce: Savers can’t preserve their wealth by moving it to dollar-denominated assets outside of the country. Some called such a package financial repression and suggested that savers move their wealth out of banks and into real estate or other real assets (or do not save at all). If savers don’t deposit any money in domestic banks, then the banks will have no money to lend, and borrowers will not get the subsidized bank loans Mr. Studwell favors. Destroying both savings and credit does not seem like a win." 

A Hard-Knock Life? Not for the Middle Class

Since the 1960s, the share of U.S. households earning more than $100,000 in real terms has tripled

Letter to The WSJ.

"Jordan McGillis writes in “Why the Middle Class Feels Poor” (op-ed, Feb. 12) that middle-class families feel they’re “losing ever more ground to the upper middle class.” He calls this “intensifying income stratification.” His measurement of stratification begins in 1975, which gives you a low growth rate. Virtually every other measure gives a more robust picture.

Between 1967 and 2023, the share of U.S. households earning in real terms more than $100,000 tripled, while the share earning less than $35,000 fell from 31% to 21%. Then, only 5% of American families earned more than $150,000. Today, more than a third do so.

How did this prosperity happen? We became more productive. The typical U.S. factory worker produces more in one hour than the typical 1947 worker did in a 10-hour day.

Scott Kaufmann

President, Kaufmann Financial" 

Dead people received internet subsidies

See FCC Overhauls $2.9 Billion Lifeline Subsidy Program to Curb Improper Payments: Regulators vote to tighten vetting for phone and internet subsidy after investigation found millions went to dead subscribers by Patience Haggin of The WSJ. Excerpts:

"The Federal Communications Commission voted Wednesday to advance sweeping reforms to its Lifeline program, tightening eligibility requirements and procedures for the nearly $3 billion phone and internet subsidy for low-income households."

"A government review, released by the FCC Office of Inspector General last month, found that over a nearly five-year period about 117,000 deceased individuals across California, Texas and Oregon received Lifeline benefits totaling $5 million. Thousands of these subscribers were already deceased at the time they were purportedly enrolled in the program. Another nearly $5.5 million was claimed for duplicate enrollments, in which more than one monthly benefit was claimed for a single individual, according to the report." 

Medicare Advantage Saves Taxpayer Dollars

Studies show that the Medicare Advantage program costs less than traditional Medicare

Letter to The WSJ. 

"When It comes to the Medicare Payment Advisory Commission (MedPAC), Matthew Fiedler and Benedic Ippolito get it wrong in “The Higher Price Tag on Medicare Advantage” (Letters, Feb. 18).

In claiming that the Medicare Advantage program costs taxpayers 20% more than if the same patients were in traditional Medicare, MedPAC makes no attempt to separate out the different kinds of enrollees. For example, many people in traditional Medicare are also in an employer plan. (Those people are probably relatively healthy.) Some Medicare Advantage enrollees are in special-needs plans. (Those people are less healthy.)

A true apples-to-apples comparison would separate out 16 categories of enrollees and compare the taxpayer cost for each. Yet for that to happen, the government has to do something it has never done: release the data.

Rep. Aaron Bean (R., Fla.) has introduced a bill in Congress that would force that very kind of disclosure. In the meantime, a rigorous study by Milliman estimates that taxpayers save $576 per enrollee per year when an enrollee joins a Medicare Advantage plan. This is consistent with an industry-financed study by Elevance Health.

The Elevance study also found that as Medicare Advantage penetration in a market increases, all doctors in the area begin to practice more efficient medicine. Owing to these “spillover effects,” a 10% increase in market share by Medicare Advantage plans leads to an average decrease in spending on all Medicare beneficiaries of between $105 and $127 per person per year.

John C. Goodman

President and CEO, Goodman Institute for Public Policy Research"

Don’t Mourn the Washington Post’s Decline

Information is richer and more accessible than ever

Letter to The WSJ.

"I have a lot of respect for Peggy Noonan, and I share her view expressed in “A Lament for the Washington Post” (Declarations, Feb. 7) that a robust, inquisitive press is an essential part of a functioning democracy. But I don’t see the end of the Washington Post (if that’s what happens) as much of a loss.

The journalism practiced by the Post in recent years has mainly been of the sort lately taught in journalism schools. Woke, ideological, biased—a loyal ally of the Democratic party. It told us Russia-gate was real, ignored Joe Biden’s decline, hewed unquestioningly to the establishment line on Covid, and reportedly had at least a dozen reporters covering climate change, all reporting the same deeply flawed story as “settled science.” The death of that sort of journalism is something to celebrate, not mourn.

The information ecosystem is vastly richer and more accessible than ever. There is plenty of misinformation on social media. But it also conveys facts, often supported by real-time video, and instantaneous access to underlying truth. You can read the report, watch the congressional hearing, listen to the cockpit voice recording. It’s all there, in real time. This is the way to hold government accountable.

Ms. Noonan is right to call out the media executives leading Big News for their failure to adjust to the technological realities of the 21st century. But most of them fail because they are incumbents, not new entrants, managers, not entrepreneurs. They lack the vision to imagine a path forward and the incentive to change.

Journalism, like any other craft, is constantly evolving. In every era it has had strengths and weaknesses, virtues and faults. The reality is that every human being sees the world through his own unique lens. Better to live in a world where freedom of expression is ubiquitous than one where the “truth” is told to us by a few ennobled journalists.

Jeff Eisenach

Nonresident senior fellow

American Enterprise Institute" 

Who Pays for Trump’s Tariffs? Americans Do

It’s U.S. companies and consumers, not foreigners, that bear most of the economic burden

Letter to The WSJ.

"Peter Navarro’s “Foreign Countries Bear the Burden of Tariffs” (Letters, Feb. 11) on foreigners indirectly paying U.S. tariffs is correct in theory yet detached from reality.

If the U.S. actually had the market power he describes, foreign exporters would in many cases lower their prices to keep selling their goods here, thus offsetting the tariffs’ domestic costs. In practice, however, the U.S. hasn’t been hegemonic in global markets for many years, thanks to the proliferation of regional supply chains and growing economies outside our borders.

Given the relatively low and declining U.S. share of global merchandise trade, economists predicted in 2024 that producers abroad would respond to U.S. tariffs not by lowering their prices here but by diverting trade elsewhere and forcing Americans to bear the tariffs’ costs. This is exactly what’s happened. China, for example, saw its U.S. exports decline in 2025 yet had strong overall export growth and a record trade surplus thanks to higher sales in other markets.

U.S. nonfuel import prices, which include discounts and rebates but exclude tariffs, would show major declines if exporters were eating Mr. Trump’s tariffs, but they were slightly up in 2025.

Many studies—not only from Harvard and the Kiel Institute, which Mr. Navarro blithely dismisses, but also the St. Louis Federal Reserve Bank, the Tax Foundation, economists Gita Gopinath and Brent Neiman, and Goldman-Sachs, among others—have examined real-world transactions and found that U.S. companies and consumers are bearing almost all the tariff burden via higher retail prices or input costs. There are exceptions, but the data confirm they’re not the rule.

Mr. Navarro needn’t, however, read wonky economics papers to see that Americans are paying Mr. Trump’s tariffs (and the higher prices for U.S.-made alternatives that tariffs encourage). Instead, he could ask the thousands of American business owners and farmers who say they’re suffering under the weight of Mr. Trump’s ill-conceived trade wars. They have voiced these concerns in shareholder earnings calls, media interviews, court challenges, bankruptcy filings, regulatory comments and town hall meetings. Hundreds of small-business owners from across the country have even formed a coalition called “We Pay the Tariffs.” These good folks would jump at the chance to go to the White House and tell Mr. Navarro who, exactly, is paying these taxes—if, that is, they had enough lobbying clout to get through the front door.

Scott Lincicome

VP of general economics and trade Cato Institute" 

State accounts of the triumph of the Chinese Communist Party have whitewashed the atrocities that were central to Mao’s rise to power

See ‘Red Dawn Over China’ Review: A Maoist Mythology by Tunku Varadarajan. He reviewed the book "Red Dawn Over China: How Communism Conquered a Quarter of Humanity" by Frank Dikötter. Excerpts:

"Mr. Dikötter sums up the Maoist fable that traces the triumph in 1949 of the Chinese Communist Party, established in 1921 under the direct tutelage of the Bolsheviks in Moscow: “the country is racked by an unholy alliance of ‘imperialist powers’ and ‘reactionary forces,’ the Communists mobilize the ‘peasants’ by taking the land from the rich and distributing it to the poor, then they gradually unite the people in their fight against the Japanese invader and the fascist Nationalist Party.” In the end, “nobody remains standing except Mao, armed with ideological conviction.” The purity of the party’s mission triumphs, and with the liberation of China comes at last the end of an ugly chapter of Chinese history and of a long series of humiliations.

This storyline follows Mao’s “historical vision,” Mr. Dikötter tells us, and is almost entirely bogus. Mao after 1949 has been thoroughly reassessed by historians and is now regarded as a monster by most right-minded people; but views of early Mao—from 1921 until 1949—remain stubbornly rose-tinted. Mr. Dikötter wants us to think again."

"Mr. Dikötter finds evidence of “how marginal the Communist Party was in the history of China” from its inception until the end of World War II."

"In Wuxi, an industrial city west of Shanghai with 100,000 workers, the party had only 25 members in 1929. In April 1927, the province of Zhejiang (population 20 million) had 2,600 members. In the desperately poor province of Gansu (population 6.7 million) in 1939, the party had a mere 264 adherents." 

"many party branches existed only on paper, and that membership statistics were inflated to claim resources from central authorities (bankrolled by Moscow)"

"Before 1940, only one in 1,700 Chinese (itself likely a faked statistic) was a Communist, roughly equivalent to Communist membership in the U.S."

"the Communists took power . . . but through the violent subjugation of China’s countryside and cities. Mr. Dikötter attributes the bulk of their success to Joseph Stalin, who armed and funded them and, in 1945, sent a million-strong army into Manchuria to help the beleaguered Communists. These Soviet troops stayed until May 1946"

"The methods  . . . were simple: scorch the earth and conquer a cowering, starving population."

"they laid siege to towns, burning government buildings, killing so-called ‘class enemies,’ seizing their property and distributing it to the troops.”"

"It was a takeover by havoc and terror."

"“nowhere during the civil war did anyone ever witness people fleeing a region controlled by the [Nationalist] government towards the Communists.” In fact, all flight was in the opposite direction."

"In every village the Communists took, the first task was to divide villagers into landlords, rich peasants, middle peasants, poor peasants and laborers. The next task: “to turn hardship into hatred,” with the poor dispossessing, beating and killing the notionally rich, whose advantage often amounted to a few more sacks of rice, or rudimentary windows on their house." 

These Three Red States Are the Best Hope in Schooling

By Nicholas Kristof. From The New York Times. Excerpts:

"The critiques have been effectively rebutted — for starters, they can’t explain the continuing gains in Mississippi or the magnitude of the gains. Just as striking, the Mississippi gains increasingly are being replicated in Alabama and Louisiana, as they follow similar approaches."

"Schools in Alabama respond firmly when a pupil doesn’t show up. After three unexcused absences, the school suggests a meeting with the parents. After five unexcused absences, school district officials summon parents and warn that they face legal risks if the truancy continues. At seven unexcused absences, the school may refer the parents to the juvenile court."

"These states have created a structure that closely monitors each school’s performance and incentivizes principals and teachers alike to do everything they can to get kids back in class and learning."

"In Mississippi, where the four-year high school graduation rate is now 89 percent, the State Department of Education each year must approve a “dropout prevention plan” from each school district."

"Measurement and metrics are particularly evident in strategies to get children to read by the end of third grade."

"So Dyhlan is pulled out of class along with other lagging readers every day for small-group tutoring in reading. Each child is tested weekly, with scores posted in a green, yellow or red zone, indicating how likely it is that they will pass a big reading test in the spring."

"in 2013, Mississippi adopted a third-grade gate — meaning that all third graders must pass a reading test to advance to fourth grade. The state then set up a system to monitor all students beginning in kindergarten to help get them on track to pass the test. Mississippi also revamped its curriculum, invested in pre-K and set up a system to coach teachers to improve their skills."

"A Black Mississippi child is two and a half times as likely to be proficient in reading by fourth grade as a Black California child."

"Likewise, low-income children are more likely to test proficient in reading in Mississippi or Louisiana than in California, Massachusetts or New York. A low-income fourth grader is almost twice as likely to test proficient at math in Mississippi as in Oregon."

"the Southern surge states lifted student achievement with only modest budgets. Spending per pupil in Alabama and Mississippi was below $12,000 in 2024, while in New York it was almost $30,000."

"A common thread in Mississippi, Alabama and Louisiana has been strong educational leadership, which in turn is able to impose a coherent strategy statewide. This includes “science of reading” curriculums, teacher coaching, measurement of student performance and accountability at all levels. In these states, everyone is rowing together; in Northern school systems, in contrast, there may be more oars but these often are pulling in different directions."

"It was easier to undertake these reforms in states like Mississippi that lacked strong teacher unions"

"Douglas N. Harris, an economist and education expert at Tulane University, said that the three states’ success is based in large part on demanding accountability and raising expectations. “Expectations for students, teachers and schools are central,” he said.

“The debate in education is often framed as a tension between excellence and equity,” Harris added. “I reject that. The system already has lower expectations for disadvantaged students. We need high expectations and standards to give them a better chance.”"

"The Southern surge states take an approach that . . . Disadvantaged students get extra help but are pushed to succeed on the same terms as everyone else, for that is what the adult job market will demand."  

Congress should short-circuit the nation’s electric vehicle charging program

By Steve Swedberg of CEI. Excerpt:

"how many EV charging stations has NEVI installed? After all, the NEVI program was enacted in November 2021. The Biden administration was hoping to have 500,000 charging ports installed by 2030. With $5 billion allocated over a five-year period, one would think that NEVI would have established a well-functioning network of EV chargers by now. Here are some estimates as to how many EV chargers have been installed under NEVI:

·      The EV States Clearinghouse, which is co-maintained by the National Association of State Energy Officials and the American Association of State Highway and Transportation Officials, has the estimate at 532 charging ports currently open.

·      An industry analysis reported that EV charging data analytics company Paren puts the estimate at 725 ports.

·      The Government Accountability Office calculated that as of April 2025, there were 384 EV charging ports installed under federal government programs. Notably, this figure includes ports from NEVI and another program called the Charging and Fueling Infrastructure Grant Program.

Regardless of the estimate used, the number of charging ports installed by the federal government is less than 1,000 and accounts for much less than one percent of the 235,428 charging ports available as of January 2026 and the 500,000 charging ports promised by the Biden administration by 2030. More than four years after enactment, and with billions appropriated, this level of deployment suggests more than ordinary implementation lag. Even a backloaded program would show clearer signs of growth by this point. Instead, NEVI’s output indicates structural bottlenecks embedded in its design rather than temporary startup delays.

Paperwork over power

Even before the Trump administration decided to rescind the existing NEVI Formula Program Guidance and suspend state approvals of deployment plans, NEVI was already floundering in red tape. As of February 6, 2025, which was a few days after USDOT Secretary Sean Duffy was sworn into office, $2.7 billion of the $3.3 billion available in NEVI funds were unobligated. In plain terms, most of the money Congress set aside had not been committed to projects.

According to the center-left think tank Third Way, NEVI’s slow progress is not due to lack of need or funding, but to bureaucratic hurdles. Complex requirements and delayed federal guidance left states navigating red tape instead of building charging stations, highlighting inefficiencies in the program’s design.

The Environmental Law Institute further breaks down these hurdles mentioned by Third Way by showing that NEVI’s deployment delays are baked into the program’s structure. States and contractors must navigate local building approvals, utility interconnection studies, and environmental reviews for each proposed site, which often stalls projects for months before a single charger goes live.

In addition, federal “Buy America” requirements add supply-chain constraints that create additional bottlenecks and increases production costs. Industry groups and state Departments of Transportation have warned that “Buy America” requirements could delay federal EV infrastructure projects due to limited domestic suppliers and complex compliance processes. These intertwined requirements illustrate how well-intentioned federal oversight can transform a supposedly fast-moving infrastructure program into a slow-moving bureaucratic behemoth.

Private sector vs. NEVI deployment timelines

An interesting point of comparison is the project timelines between the private sector and NEVI installations. Industry analysis indicates that regulatory and utility interconnection processes alone commonly add a year to 18 months to the timeline for NEVI‑funded charging projects, well before construction begins. Although all 50 states have submitted and received approval for NEVI EV charging deployment plans, the plans do not include uniform benchmarks for how long it takes from award to station operation. Arizona expected it to take a year to install once approved, whereas California provides a range of one to two years.

By contrast, the private sector reports shorter timelines. EV charging financing company Sustainable Capital Finance (SCF) estimates that it can take 3 to 16 months to install an EV charger, whereas EV charging company EVgo puts the figure at 18 months. EV charging stations take time to install, irrespective of red tape. At the same time, these diverging timelines illustrate why the private sector is able to generate tens of thousands of ports in the time that NEVI has installed fewer than 1,000 ports. 

Daren Bakst, director of CEI’s Center for Energy and Environment, has noted this discrepancy reflects a broader principle: states and private actors ultimately determine where and when chargers are built, and government mandates cannot substitute for market-driven deployment. In fact, Bakst highlighted that even with billions allocated to NEVI, no chargers had yet been installed at the time of his analysis in December 2023. This insight reinforces the idea that federal intervention cannot reliably accelerate infrastructure deployment.

Beyond regulatory red tape, NEVI has been hampered by predictable governance failures that exacerbate the timeline issues. For example, a federal court recently ruled that the US Department of Transportation unlawfully froze congressionally appropriated NEVI funds, which forced states to litigate simply to access money already authorized by law. Such administrative paralysis is not an anomaly. It is a predictable outcome when a program centralizes decision-making in federal agencies subject to shifting priorities, complex compliance rules, and political interference.

NEVI spending fails the traveler

Despite a $5 billion commitment made in 2021 to build a nationwide EV charging network, there are fewer than 1,000 operational charging ports. This amount represents a miniscule fraction of the ports already available nationwide, and more importantly, the amount promised by the Biden administration. The Government Accountability Office highlights how NEVI lacks clear performance goals or benchmarks, meaning policymakers cannot even track whether NEVI is meeting its intended outcomes. Combined with bureaucratic hurdles, slow deployment, and small scale of charging ports at this stage, it becomes difficult to argue that NEVI is doing anything of substance to positively contribute to transportation infrastructure.

At the same time, private companies continue to expand the EV charging network across the US and often complete projects in a matter of months instead of years. History has shown that building a nationwide network of fueling infrastructure does not require subsidies. Gas stations achieved this growth organically in the 20th century without subsidies. Those same market forces can drive and already have been driving EV charger deployment."

Tariffs as Fiscal Policy

From Jeffrey Miron.

"President Trump has claimed his tariffs will raise enough revenue to allow for income tax cuts.

Recent research, however, finds that even at optimal tariff rates, these tariffs

would raise an amount less than one-fifth of federal income tax revenue … generat[ing] efficiency losses nearly equal to the revenue raised.

Tariffs are also

regressive … [and] today’s tariffs are particularly high, variable, and uncertain. This raises compliance costs, reduces investment, creates serious tax administration problems, and encourages corruption and wasteful lobbying efforts.

Lastly, while tariffs do reduce imports, they also reduce exports and invite retaliatory tariffs, which in turn harm US manufacturers.

Tariffs are a blunt instrument that—even without the current volatility, but even more with it—cause efficiency losses, increase compliance costs, and harm the industries they allegedly help."

There is no evidence that time spent on social media is correlated with adolescent mental health problems

See The mainstream view by Tyler Cowen.

"Multiple studies have either shown that smartphone and social media use among teens has minimal effects on their mental health or none at all. As a 2024 review published by an American Psychological Association journal put it: “There is no evidence that time spent on social media is correlated with adolescent mental health problems.”

And this:

Advocates of bans compare social media to alcohol or tobacco, where the harms are indisputable and the benefits are minimal. But the internet, including social media, is more analogous to books, magazines or television. I may not want my sons watching “The Texas Chain Saw Massacre” or reading “Fifty Shades of Grey,” but it would be crazy to ban books and films for kids altogether.

But that is the nature of these social media bans. Australia’s law not only restricted access to platforms such as Instagram and TikTok but also banned kids under 16 from having YouTube, X and Reddit accounts. Even Substack had to modify its practices.

Here is more from the excellent Sam Bowman.  And many teens make money through “digital side hustles,” in this day and age that is what a teenage job often means."

Why Economic Freedom Matters

By David R Henderson. 

"Each year the Economic Freedom of the World report does something important: it measures whether ordinary people are allowed to make economic choices—work, save, start a business, trade, invest, and keep what they earn—without being pushed around by the government. The newest edition, published in 2025 by the Fraser Institute’s global network, compiles data through 2023 and ranks 165 jurisdictions.

The premise is simple. If you want a society in which people can pursue their own plans—especially people who do not have political connections—you need a framework that protects property, enforces contracts, keeps money reasonably sound, permits trade, and limits regulatory barriers. The report’s value is not that it settles every argument, but it does settle a good many. Among those many is the biggest issue in economic policy: free markets versus government. Which kind of economic policies make it easier for people, including the poor, to succeed? In each of the many reports done since 1985, the answer is clear. Economic freedom works well to generate well-being for pretty much everyone. (bold added)

The good news is that economic freedom rose fairly steadily until 2019. The bad news is that it has fallen since then. For the United States, the good news is that we rank fifth out of 165 political jurisdictions. The bad news is that our absolute score is lower than it was in 2019.

These are the opening paragraphs of my latest article for the Hoover Institution: “Why Economic Freedom Matters,” Defining Ideas, February 19, 2026.

The December 2025 report didn’t make as big a splash on the web as I think it should have. That’s why I wrote this piece.

Another excerpt:

The report also points out one tragic fact: “The 10 lowest-ranked countries were Chad, Libya, Syria, Argentina, Myanmar, Iran, Algeria, Sudan, Zimbabwe, and Venezuela.” Venezuela was the lowest, with a score of 3.11, and the highest of the ten was Chad, with a score of 4.84. Where were Cuba and North Korea? There were not enough reliable data available for the authors to assign a score.

And:

Here is the uncomfortable headline: global economic freedom peaked in 2019 and has declined each year for four years afterward. The report ties the post-2019 drop to the policy response to the coronavirus pandemic and notes that all five areas declined after 2019, with “sound money” experiencing the largest drop.

Since 2019, therefore, the direction is clearly down. That matters because many people—especially in rich countries—talk as if freedom is the default setting and only dictatorships threaten it. The data say otherwise: freedom can shrink by “temporary” emergency measures, and the shrinkage can linger. Adam Smith famously said, “There is much ruin in a nation,” but that doesn’t mean that declines in freedom are to be ignored.

And:

Start with income. Comparing the freest quartile of countries to the least free quartile, the report finds that average incomes are 6.2 times as great in the freest countries as in the least free. And the income of people in the bottom 10 percent is 7.8 times as high in the freest quartile as in the least free. Those are ratios. The report also provides concrete dollar levels in purchasing power parity dollars. The average income threshold for the poorest decile is about $9,771 in the freest quartile versus about $1,255 in the least-free quartile. If you care about poverty in a serious way—meaning you care about what poor people can actually buy—those numbers should end a lot of fashionable conversation.

Read the whole thing."

THE 1950S: A NOT-SO-GOLDEN AGE

By John Cochrane. Excerpts:

"Look at standards of living. Real gross domestic product per capita, which is also national income per capita, sat below $19,000 in 1955. In 2025 it approached $69,500. These figures are expressed in 2017 dollars, thus accounting for inflation. The average American is about 3.7 times better off today than in 1955. It’s not even close.

Yes, GDP grew faster in the 1950s. Real GDP per capita grew 28 percent from 1949 to 1959, and only 18.3 percent from 2009 to 2019. Slowing growth is a major economic problem today. Be that as it may, we eat levels, not growth rates. We might not be getting even better off as fast as we were then, but we’re still 3.7 times better off.

How about jobs? In August 2025, 163 million people were employed in the United States; in August 1955, 63 million. America created 100 million jobs over those seven decades. This growth occurred even as manufacturing employment shrank and machines took over. People found better—and better-paying—jobs, most in services. Has any evangelist for union jobs of the 1950s considered how dirty, dangerous, and mind-numbing it was to work on an assembly line? Isn't being a desk drone, a nurse, a bank employee, or any of a hundred mid-level service jobs a lot nicer in addition to better paid? In 2025 the unemployment rate, the fraction of workers looking for a job, stood at 4 percent, just about what it was in the 1950s and what economists think of as a normal labor market.

The great 1950s union labor market was great only if you were a straight white man, and usually one with connections. “We don’t want nobody nobody sent” was the great saying of Chicago Machine job allocation. Women, African Americans, other minorities, and immigrants faced bleak prospects. One of the great achievements of the U.S. economy since the 1950s has been to expand the labor force as well as opportunities for high-paying jobs to all sorts of people who were excluded then. Civil rights, the emancipation of women, and the increasing acceptance of gays, foreigners, Catholics, and Jews (not so true in the 1950s)—these are nothing to sneeze at. The unions made good jobs for white men, relative to other jobs at the time, in part by excluding others.

What about those easy-to-buy houses? The average house in the 1950s was about 1,000 square feet. The famous Levittown houses were 750 square feet. One bathroom. Today, the average house is about 2,500 square feet, even though the average number of people in it declined from 3.4 in 1950 to 2.5 in 2024. People are choosing larger and better homes.

To men of my age, 1950s cars evoke nostalgia. But they were awful, unsafe rust buckets compared to today’s boring SUVs.

What about those easy to buy houses? The average house size in the 1950s was about 1,000 square feet. The famous Levittown houses were 750 square feet. Today is it about 2,500 square feet, even though the average number of people in it has declined from 3.3 to 2.5. And modern houses are much better. People are choosing larger and more expensive homes. 1950s cars, to men of my age, evoke nostalgia. But they were awful unsafe rust buckets compared to today’s boring SUVs.

THE MYTH OF AN EGALITARIAN UTOPIA

GDP isn’t everything, though it is a lot. Was health care cheaper in the 1950s? Yes, though for many diseases, including heart conditions and cancer, treatment then consisted of asking whether you wished to see a priest, a minister, or a rabbi to send you off to the next world. Life expectancy at birth has increased by a full decade, rising from 65.6 to 75.8 for men and from 71.1 to 81.1 for women.

Pollution in the 1950s was atrocious, especially in those industrial areas so beloved by nostalgic left-wing professors. (I grew up on the south side of Chicago. I remember coal dust that accumulated on anything outside.) The fraction of people living in extreme poverty has plummeted, even as the goalpost keeps moving. And we all benefit from nearly free technological marvels undreamed of in the 1950s. Most homeless people have cell phones.

Our prosperity is, in fact, widely shared, though the inequality warriors would have you believe otherwise. Most research on income inequality doesn’t account for taxes and transfers, especially in-kind transfers. Consumption inequality is much lower than income or wealth inequality, and has expanded a good deal less. You just can’t have that many vacation homes. Wealth inequality largely consists of high stock market values in a low-interest-rate environment. Just how much social harm is Elon Musk’s huge holding of Tesla stock doing, remaining invested in the company, and producing cars and rockets?

Some observers regard the 1950s as a sort of egalitarian utopia because the rich faced high statutory tax rates. Yes, the highest federal income tax rate stood at 91 percent for most of the decade. But people confronted with sky-high tax rates go talk to their lawyers fast. Even the far-left economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman found that the top 1 percent of American households paid on average 42 percent of their income in taxes in the 1950s. Six decades later, at a time of supposedly stark inequality, that number had fallen only slightly, to 37 percent.

These figures account for all forms of taxes. In the 1950s, the top 1 percent paid, on average, an effective rate of just 16.9 percent in federal income taxes, as the Tax Foundation documents. How could they pay so little when the top federal tax rate reached 91 percent? The answer is: loopholes—many, many loopholes. Celebrities incorporated themselves and bought oil wells for the write-offs."

Minimum Wages and Racial Disparities

Job losses and earnings reductions from minimum wage increases between 2005 and 2019 were much more prevalent for black workers, especially black men, and were minimal for white workers.

By David Neumark and Jyotsana Kala. Excerpt:

"Our research uses data from the American Community Survey between 2005 and 2019 to examine the effects of minimum wage increases on black workers and their relative impact compared with that of white workers. We studied not only teenagers—the focus of much existing research—but also other lower-skilled groups, including workers under the age of 30 and those without a high school degree.

Our findings indicate that job losses from minimum wage increases were much more prevalent for black workers, especially black men, and were minimal for white workers. For example, among black male workers under the age of 30 without a high school degree, a 10 percent increase in the minimum wage reduced employment by 4.1 percent on average. In contrast, our research finds no evidence of reduced employment for white workers with the same characteristics, even though the wages of both black and white workers increased by a similar degree.

Considering the wage and employment effects together, we found that higher minimum wages have decreased earnings for lower-skilled black workers. For example, within the same group of black male workers, a 10 percent increase in the minimum wage led to a 4.8 percent average reduction in earnings. In contrast, we found no evidence of reduced earnings for white workers with the same characteristics. In fact, for several of the lower-skilled groups we studied, minimum wage increases tended to increase earnings for white workers.

Because there is substantial residential segregation by race in the United States, the concentration of the minimum wages’ adverse effects on black workers implies that their adverse effects are also concentrated in heavily black neighborhoods. Indeed, our research finds that the adverse effects of minimum wage increases fell disproportionately on people of all races living in areas with a high black population share, worsening the adverse effects of minimum wages on black workers living in these areas relative to workers living elsewhere. In some cases, the accumulation of adverse effects for black workers and black neighborhoods implies that large differences in minimum wages could account for roughly 40 percent of the gap in employment rates for lower-skilled workers between areas with high and low black population shares."

The US tax system has become much more progressive

Tweet from Stefan Schubert.

"The US tax system has become much more progressive (notice the X-axis). The richest pay half their income in tax, the poorest nothing."

  

The age-standardized cancer mortality rate in the US has fallen by almost 40% since 1990

Tweet by Jeremy Horpedahl.

"The age-standardized cancer mortality rate in the US has fallen by almost 40% since 1990. Technological progress and economic growth is not just new entertainment gadgets that fit in our pockets!"

  

19 years ago the Guardian said we have "ten years to save the planet from mankind"

A tweet from James Melville. Click here to see the original article.

 

What’s Across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects

By Priyaranjan Jha, David Neumark & Antonio Rodriguez-Lopez. 

"Dube, Lester, and Reich (2010) argue that state-level minimum wage variation correlated with economic shocks generates spurious evidence that higher minimum wages reduce employment. Using minimum wage variation within contiguous county pairs sharing a state border, they find no relationship between minimum wages and employment in the U.S. restaurant industry. Using the same research design, we show that this result is overturned if we use instead multi-state commuting zones, which provide superior definitions of local economic areas. These contrasting results are explained by a positive bias in the county-pair specification when using pairs formed by counties from different commuting zones." 

The Trouble With MedPAC

A federal advisory board tries to undermine Medicare Advantage.

WSJ editorial. Excerpts:

"MedPAC last month estimated the government will spend $76 billion more this year for seniors on Medicare Advantage than if the same seniors were covered by traditional Medicare fee-for-service. It estimated excess payments to Medicare Advantage plans at $84 billion in 2025 and $88 billion in 2024. That’s a lot of money, but its estimates are based on faulty assumptions."

"MedPAC claims that seniors in Medicare Advantage are healthier than those in fee-for-service because they incur less spending. Ergo, insurers must be coding them as being sicker than they are. Maybe, but that’s hard to square with the fact that Medicare Advantage enrollees are also more likely to be low-income and have poor self-reported health status.

A more likely explanation is that plans do a better job of ensuring conditions are diagnosed and treated, thereby reducing unnecessary spending and hospitalizations. In a new study published in Health Affairs Scholar, Centers for Medicare and Medicaid Services officials found excess risk-adjusted payments on the magnitude of 1.5% to 2%, about $5 billion to $6.6 billion a year—far less than MedPAC’s estimates."

Texas’ Self-Defeating H-1B Pause

The MD Anderson Cancer Center is one of the institutions that will feel the pain

By Collin Levy of The WSJ. Excerpts:

"the claim that work visas take jobs from American citizens doesn’t hold up. The Texas unemployment rate was 4.3% as of December, and in Austin—where high-tech jobs cluster—it was just over 3%. Foreign workers in the U.S. typically fill gaps in the labor market that aren’t met by American citizens. A 2020 study by the National Foundation for American Policy found that an increase in H-1B visas within a profession was associated with a decrease in the unemployment rate in the profession."

"Mr. Abbott’s visa ban directs the heads of state agencies and public universities to inform the Texas Workforce Commission how many H-1B petitions they submitted in 2025—as well as “documentation” that Texas candidates had a “reasonable opportunity to apply for each position.” It also asks for the “countries of origin of all H-1B visa holders the entity currently sponsors.” When I asked the governor’s office why it is asking for countries of origin and if there are particular countries of concern, I was directed back to his press release and letter, which don’t address the questions." 

DEI Is a Threat to Americans’ Health

By Stanley Goldfarb. Excerpts:

"They changed [medical schools] their curricula to teach economic and social lessons that ladder up to the false claim that America is systemically racist. The LCME [Liaison Committee on Medical Education] has tacitly approved this shift by issuing vague standards that give medical schools far too much leeway. The resulting lack of rigor allows unprepared students to slide through undemanding courses while undercutting the preparation needed to become excellent doctors."

"The traditional two years of pre-clinical education required to become a doctor has been significantly reduced at more than a third of medical schools. This gives short shrift to the foundational curriculum in genetics, biochemistry, biostatistics and epidemiology."

"At 80% of M.D.-granting schools, the foundational courses in basic science and clinical skills are now graded pass/fail"

"The first part of the national licensure exam that determined residency placement has also been changed to pass/fail"

"a growing number of medical students lack a strong grasp of basic medical knowledge."

"At UCLA’s David Geffen School of Medicine . . . more than 50% of students failed basic tests on family medicine, pediatrics and emergency medicine. Nationwide, the percentage of medical students who pass the first part of the licensure exam has fallen every year since 2020, dropping from 97% to 89%"

"Even liberal medical journals have begun to question the state of medical education. A 2025 New England Journal of Medicine article on the use of pass/fail in medical school asked, “Is ‘Good Enough’ Good Enough?”" 

Two Confusions About the California Wealth Tax

Unrealized capital gains aren’t classified as taxable income in the U.S. for good reason

Letter to The WSJ. 

"At least two confusions discredit Mayra Castañeda’s attempted defense of California’s proposed wealth tax in her letter “Billionaire Tax Would Save Calif. Healthcare” (Feb. 4). She claims that “billionaires pay less in taxes on their overall wealth than working families do.” She gets away with this because the research that she cites, although it postures as measuring the taxation of incomes, in fact measures the taxation of paper wealth by classifying unrealized capital gains as taxable income.

But unrealized capital gains aren’t classified as taxable income in the U.S. for good reason. Were these gains treated as such, taxpayers—including many middle-class families—would have to liquidate assets whenever tax season rolled around to pay their bills. One result, in addition to this annual hardship, would be a shrinkage of America’s capital stock which, in turn, would slow wage growth as workers, having less capital to work with, would be less productive than otherwise.

Ms. Castañeda also ignores the most prominent argument against the proposed tax—namely, that it will drive billionaires, along with their taxable incomes and wealth, to states that are less greedy to seize the fruits of high-earners’ efforts. This exodus of billionaires would occur even if, contrary to fact, counting unrealized capital gains as taxable income were a sound idea.

Prof. Donald J. Boudreaux

Mercatus Center

George Mason University"