My intrepid Mercatus Center colleague Veronique de Rugy, writing in today’s New York Times, reports on a Congressionally created cronyist program that I’ll bet not one in one-thousand students of cronyism were aware of (until now) . Here’s her opening:
Right under the nose of a president who promised to drain the swamp, one of the government’s shadiest handouts to large banks and big companies looks like it will be renewed for another 25 years. It will not get adequate oversight and congressional review. All it will take is the approval of two out of three U.S. Export-Import Bank directors, who are political appointees.
That entity is called the Private Export Funding Corporation, or PEFCO.
I study corporate welfare, and even I was surprised to discover a government entity with such unchecked cronyism and self-dealing. How did it fly under the radar? Despite increasing taxpayers’ exposure to bank debt, it hasn’t received a public review  since it made its first loan  in 1971.
Ilya Somin is right to warn of the great danger lurking in the Trump administration’s moratorium on evictions . Here’s the post’s subheading: “It’s a power grab that could undermine federalism and separation of powers, and imperil property rights.”
How can public policy best deal with infectious disease? In answering this question, scholarship on the optimal control of infectious disease adopts the model of a benevolent social planner who maximizes social welfare. This approach, which treats the social health planner as a unitary “public health brain” standing outside of society, removes the policymaking process from economic analysis. This paper opens the black box of the social health planner by extending the tools of economics to the policymaking process itself. We explore the nature of the economic problem facing policymakers and the epistemic constraints they face in trying to solve that problem. Additionally, we analyze the incentives facing policymakers in their efforts to address infectious diseases and consider how they affect the design and implementation of public health policy. Finally, we consider how unanticipated system effects emerge due to interventions in complex systems, and how these effects can undermine well-intentioned efforts to improve human welfare. We illustrate the various dynamics of the political economy of state responses to infectious disease by drawing on a range of examples from the COVID-19 pandemic.
[P]oliticians invariably feel the need to “do something.” Despite volumes of evidence from disparate fields like economics, social work, ecology, and medicine, it never seems to occur to politicians that sometimes doing less, or even doing nothing, is by far the better approach. Why should it occur to them? When politicians act and their actions do more harm than good, they always say the same thing: “Imagine how bad it would have been had we not acted.”
But this time, we have evidence. We can compare what happened where politicians reacted with a heavy hand to what happened where they reacted with a light touch. And the evidence we have so far points to the same conclusion: Our politicians destroyed our economy unnecessarily.