The ban on celebrity endorsement is at odds with accepted practice elsewhere in the economy. Does anyone believe Samuel L. Jackson is touting Capital One because he really likes their credit cards? Americans are aware that celebrities are paid for their endorsements and discount those endorsements accordingly. Similarly, there aren’t anti-touting rules for selling gold, pharmaceuticals or even online gambling sites. Why would the SEC believe that investors are susceptible to believing Ms. Kardashian is a fan of EMAX, when they surely know she is being paid when she hawks countless non-investment products?
The SEC’s action might have a perverse effect on investor behavior. By going after Ms. Kardashian, the commission sends the signal that it is aggressively protecting investment opportunities in an effort to make them safe for average Americans. On their view of the world, information-poor retail investors are likely the only people who could possibly be duped into following what they thought was Ms. Kardashian’s altruistic investment advice. But crypto is an inherently speculative market, and the SEC shouldn’t be creating a false sense of confidence in retail investors. Investors would be better served if the SEC put up a sign that said that all investments, crypto or otherwise, run the risk of fraud and chicanery.
Last Saturday, I woke up at 1:45 a.m. feeling sick as a dog. I didn’t get back to sleep. I had a bad cold, a stuffed-up nose, a headache, and lots of phlegm. (I apologize if this is TMI.) When my wife woke up, she told me I should take Advil. I’m careful not to overdo drugs, and so I took only one Advil. Within an hour, I felt better, not better enough to do anything other than sleep, but better. My headache was gone.
Because I had time to reflect, I told my wife that I didn’t remember having Advil as a child. She said that was because it didn’t exist then. She was right. Ibuprofen, of which Advil is a particular brand, didn’t become available in the United States until 1974, when I was in my early twenties. That got me thinking about the huge range of high-quality cheap goods that we have available in this economy. Of course, because I’m an economist, it reminded me of what’s required for those goods to keep being made and for better ones to replace them. What we need is a fairly free economy. Virtually every government move to make that economy less free, whether by regulating, having the government take over an industry, or taxing more, will reduce our economic progress.
It’s striking to see how many people quickly get used to a good they value and take it for granted. Thus, the quote above from R. W. Grant’s poem about the incredible bread machine. People took the low-price, high-quality bread for granted: “Was it not always so?”
Economists are not exempt from this tendency. I’m not sure why. One possible reason is that it’s not “cool” to appreciate and celebrate life’s everyday treats. I’m so not cool. When I see the things we have, I want to say, “Pinch me.” Whether it’s access to Advil, the ability to listen to a song on my phone whenever I want, the fact that I’ve been to Disneyland multiple times, or the fact that I can get on an airplane and be almost anywhere in the continental United States in under eight hours by spending less than one week’s income, I still wonder at what we in America have. It’s true that I’m in the upper 10 percent of the income distribution. But that’s why I chose these examples. Most of them would apply to most people in the upper half of the income distribution and some even to people in the lower half. We’ve come a long way, baby.
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For various goods and services to improve, government has to allow people to improve them. This sounds obvious, but in some industries, people must get government permission before putting products on the market. Most notorious is regulation by the Food and Drug Administration that prevents people from selling pharmaceuticals until they have shown, to the FDA’s satisfaction, that the drugs are both safe and effective. In a path-breaking study in the early 1970s, University of Chicago economist Sam Peltzman showed that the requirement for efficacy, which was added in 1962, caused more than a 50 percent reduction in the annual number of new chemical entities, i.e., new drugs.
Jeffrey Singer writes about Biden’s (welcome but unfortunately too modest) decision to pardon those persons convicted under federal legislation for marijuana possession. (Also writing about this move by Biden is Jacob Sullum.)
Pat Lynch sings the well-earned praises of Guatemala’s remarkable Universidad Francisco Marroquín.
None of this takes under consideration the increase in interest payments on the debt with rates rising substantially for the first time in decades. According to the Treasury Department, in August, payment on U.S. government debt was $63 billion, up from $34 billion in January. What’s more, the CBO’s interactive budget tool illustrates what an interest rate increase above the baseline means for interest payments. The answer is “expensive.” As Jack Salmon and I wrote over at Discourse magazine, “If the interest rate on the 10-year Treasury note is…1 percentage point higher than expected, the cumulative deficit will be $2.85 trillion larger over the decade.”
And Ramesh Thakur wants to know “where is the accountability for covid policy harms?”
There is a strong desire after seeing the results of a disastrous choice like the lockdowns to validate it in retrospect. People sacrificed so much. It must have been worth it.
But the hard truth is that it was destructive and entirely unnecessary. A predictable disaster.
