Tweet [1]
My GMU Econ colleague Dan Klein assembles some sage wisdom about DEI [3].
GMU Econ alums Ben Powell and Alex Salter write sensibly about gasoline prices [4]. A slice:
Biden’s approach to energy makes production and distribution more difficult [5]. The U.S. economy is producing millions fewer of barrels of oil per day than it did during the 2017–2020 boom. This decreased U.S. production is not caused by the war in Ukraine. U.S. policy decisions make oil and gas quantities lower and prices higher than they otherwise would be. Domestic production lags because companies can’t risk new investments floundering on the administration’s costly climate policies. As a result, oil prices are 40 percent higher now than they were in January 2021.
Ryan Bourne explains why we should worry about government interference in U.S. labor markets [6]. A slice:
Yet in my chapter of the Empowering The New American Worker [7] book, I explain how basic economic analysis (confirmed by empirical evidence) tells us that, at best, these policies tend to help some workers enjoy more security or higher pay or benefits at the expense of others, who often suffer heavily. At worst, they raise the overall costs and risks of mutually beneficial job agreements, reducing net opportunities, harming business productivity, or distorting remuneration packages in ways that harm employees.
What’s more, in recent years, there has been political momentum – mainly from the left, but also the national conservative right – for expanding U.S. labor regulation in a more highly regulated “European” direction, with stricter mandates on contract provisions and greater curbs on firms’ ability to freely recruit or layoff workers. These have included a push for a $15 federal minimum wage, government encouragement of collective bargaining agreements, shoehorning gig economy and other independent workers into traditional employee‐employer regulatory frameworks and rolling out predictive scheduling laws.
This direction of travel is an error. First, because cross‐country evidence suggests that restrictive labor market regulations raise the structural level of unemployment, particularly for demographic groups with the weakest attachment to the labor market, such as young and unskilled workers. Prior to the pandemic, for men and women, the EU (which has much more stringent labor laws, on average) saw youth unemployment rates (15–24 percent) of 15.3 percent and 14.8 percent, against just 9.4 percent and 7.3 percent in the U.S.
This essay uses concepts from Adam Smith’s The Theory of Moral Sentiments to develop ideas about choice and welfare. I use those ideas to offer several challenges to common approaches to behavioral welfare economics and new paternalist policy making. Drawing on Smith’s dialectical concept of practical reason, which he develops in expositing ideas about self-awareness and self-judgment, I first argue that inconsistency need not be viewed as pathological. Inconsistent choices might indicate legitimate context-dependencies as individuals reflect over disjointed perspectives and act accordingly. Understanding inconsistency as reasonable raises epistemic difficulties for identifying errant choices and designing corrective policies. Second, I draw on Smith’s theory of the impartial spectator to discuss dynamic aspects of welfare. Welfare is not simply a matter of preference satisfaction but involves a sense of progress and improvement towards better preferences. Smith’s account suggests that economists interested in welfare should focus on institutional arrangements that facilitate self-development.
Art Carden reviews my GMU Econ colleague Bryan Caplan’s new book, Don’t Be A Feminist: Essays on Genuine Justice. [10] A slice from Art’s review:
While the chapters span Caplan’s entire blogging career at EconLog, people might find his first few chapters most interesting in light of present controversies on college campuses. The first chapter is the longest in the book; it’s a 30-page letter to his daughter titled “Don’t Be A Feminist.” At the risk of oversimplifying, Caplan encourages his daughter to cast a skeptical eye on “systemic” and “structural” explanations for group differences when there are other, more plausible explanations. A classic example from labor economics that appears a few times in the book concerns the gender wage gap, which is often misleadingly presented as 20% earnings gap for men and women doing the same jobs. But men and women do not do the same jobs, of course, and a lot of the wage gap can be explained by things like the vast overrepresentation of men in extremely risky jobs like logging. A moment’s reflection shows that a gap per se is not prima facie evidence that something sinister is going on.
Vinay Prasad tweets [12]: (HT Martin Kulldorff [13])
It is not ok to fire people for not taking a vaccine that provides no benefit to third parties. The ethical prerequisite to mandate was not met. Merely meeting it doesn’t mean it was a good idea, but not meeting it was a nonstarter.
(DBx: To be clear, I agree with Prasad that no one should be fired from a job just because that person refuses to take the covid vaccine – a vaccine that, indeed, provides little to no benefit to third parties. But I support the right of private employers to require such vaccination – indeed, to require whatever peaceful conditions it chooses, however unscientific or whacky or distasteful. I would do my best to avoid conducting business with employers who require their workers to be vaccinated against covid, but I would also defended these employers’ right to have such a requirement.)
The White House Coronavirus Task Force, led by Vice President Mike Pence [15], Anthony Fauciand Deborah Birx, put the Constitution into an induced coma. Mr. Trump’s decision to adopt Chinese Communist Party tactics and close down the country gave license to states to amplify and extend these terrible policies, to governors to wield unprecedented executive powers, and to school districts to shut students out for months or even years.
Mr. Trump did very little to constrain this overreach. His dramatic Covid order shut down your business, barred your kids from school, denied you access to your church, your gym and your coffee shop. It suppressed screenings and treatments for cancer and other illnesses and kept people from visiting loved ones in the hospital or attending their funerals.
Studies appear weekly confirming what almost everyone now acknowledges—the lockdowns were futile as well as onerous. One set of researchers wrote [16]: “Overall, we conclude that lockdowns are not an effective way of reducing mortality rates during a pandemic.”
Mr. Trump paid lip service to the need to reopen the country but never rallied lawmakers or other officials to do anything about it. It was left to governors like Brian Kemp of Georgia and Ron DeSantis of Florida to do that on their own.