Gov. Gavin Newsom went to Austin, Texas, last year to tout his own state, California. Speaking at the Texas Tribune Festival, he said that conservative governors are “doubling down on stupid, and we will not follow their path. We’re going in a completely different direction.” He’s right about the latter point. Recent Census data confirm that Californians are going in a different direction—they’re fleeing their state in droves.
California’s net domestic migration—the number of people moving into the state minus those moving out—has been negative every year since 2011. But net outflows over the past two years were larger than both California’s natural rate of population increase (births minus deaths) and international migration to the state combined. As a result, California’s population declined by 1.3%, from 39.5 million in July 2020 to 39.0 million in July 2021. From 2021 to 2022 alone, California lost 343,000 people to net domestic migration. Although many socioeconomic factors explain this population exodus, my research points to California’s high state and local taxes as the primary culprit.
The Tax Foundation’s 2021 State Business Tax Climate report ranks California’s state and local taxes as the second highest in the nation, just below New Jersey and above New York. People are fleeing these states. As a percentage of its population, California’s loss in net domestic migration was fifth highest in the country, at 879 per 100,000 people. New York’s net migration loss was the highest of any state, at 1,522 per 100,000.
The other disturbing error of Mr. Krugman, and a common one made by economists,is what I call the “Philosopher-King Fallacy.” It is the failure to consider the political context in which economic policies are made. Mr. Krugman cites a single example where a small country (Israel) imposed weakly enforced, partial price controls in the mid-1980s. By citing the apparent success of this policy in reducing inflation (which also entailed significant pro-market reforms, not credited by Krugman, such as reduced subsidies and privatization of businesses), Krugman implies that we could surgically and precisely impose and remove price controls without harmful effect, achieving the hoped-for goal of slowing down or stalling inflation, without other unwanted deleterious consequences.
If the US imposed economy-wide price controls, as Krugman proposes, it would not stop inflation, just as the Emperor Diocletian’s economy-wide controls did not stop Roman inflation and just as the 1970s economy-wide controls did not stop US inflation. But it would throw sand into the gears of the economy, destroying the coordinating effect of the Invisible Hand. It would reduce our standard of living and create new vested political constituencies for maintaining parts of it, even if one could precisely remove the “temporary” controls at just the right time, as hoped for by the Economic Philosopher-King.
The advantage of established, true economic theory is that we do not need to keep repeating the mistakes of the past. There are unsettled parts of economic theory, but the beneficial coordinating effect of free, market-determined prices is not one of them. It surprises and disappoints me that a prominent economic columnist at the self-described “newspaper of record,” the New York Times, would traffic in such absurdities.
Every dollar spent by government is a dollar’s worth of resources drained away from the private sector, from household consumption and from private businesses. When paid for with taxes, government spends with some semblance of responsibility because it’s not running up a credit card bill to be handed to future generations. But use of the debt credit card encourages spending that a responsible government would avoid. Far too many resources are sucked from the private sector into the public sector, reducing investment, innovation and growth. Some restrain on deficit financing is necessary.
On Oct. 4, 2020, along with two other eminent epidemiologists, Sunetra Gupta of the University of Oxford and Martin Kulldorff of Harvard University, I wrote the GBD. The declaration is a one-page document that proposed a very different way to manage the COVID-19 pandemic than had been used up to that date. The lockdown-focused strategy that much of the world followed mimicked the approach that Chinese authorities adopted in January 2020. The extended lockdowns—by which I mean public policies designed to keep people physically separate from one another to avoid spreading the SARS-CoV-2 virus—were a sharp deviation from Western management of previous respiratory virus pandemics. The old pandemic plans prioritized minimizing disruption to normal social functioning, protecting vulnerable groups, and rapidly developing treatments and vaccines.
Even by October 2020, it was clear that the Chinese-inspired lockdowns had done tremendous harm to the physical and psychological well-being of vast populations, especially children, the poor, and the working class. Closed schools consigned a generation of children worldwide to live shorter, less healthy lives. In July 2020, the Centers for Disease Control released an estimate that 1 in 4 young adults in the United States had seriously considered suicide during the previous month. The U.N. estimated that an additional 130 million people would be thrown into dire food insecurity—starvation—by the economic dislocation caused by the lockdowns. The primary beneficiaries of the lockdown—if there were in fact any beneficiaries of these drastic anti-social measures—were among a narrow class of well-off people who could work from home via Zoom without risk of losing their jobs.
It was amply clear by October 2020 that the lockdown policy adopted by many Western governments, with the exception of a few holdouts like Sweden, had failed to stop the spread of COVID. It was in fact too late to adopt a policy goal of eradicating the virus. We did not have the technological means to achieve this goal, then or now. By the fall of 2020, it was abundantly clear that COVID-19 was here to stay and that many future waves would occur.
Governments had imposed lockdowns on the premise that there was nearly unanimous scientific consensus in support of them. Yet an extraordinary policy like a lockdown requires, or should require, an extraordinary scientific justification. Only near unanimity among scientists, backed by solid empirical data, suffices.
Like Gupta and Kulldorf, I knew that such unanimity did not exist. Many scientists worldwide had contacted us to tell us about their qualms with the lockdowns—their destructiveness and the poor evidence of their effectiveness. Many epidemiologists and health policy scholars favored an alternative approach, though many were scared to say so. It seemed clear to the three of us that as the next inevitable wave appeared, there was a risk that the lockdowns might return, and that scientific evidence against such steps would be ignored and smothered, at tremendous social cost.
We wrote the GBD to tell the public that there was no scientific unanimity about the lockdown. Instead, the GBD proposed a focused strategy to protect the elderly and other vulnerable populations. There is more than a thousandfold difference in mortality risk from COVID-19 infection between the old and the young, with healthy children at negligible risk of dying. The humane thing is to devote resources and ingenuity to protect the most vulnerable. The GBD and its accompanying FAQ provided many suggestions about how to do that and invited local public health communities, which know best the varied local living circumstances of the vulnerable, to devise local solutions. At the same time, the GBD advocated lifting lockdowns and opening schools to alleviate harms to children. We put the GBD on the internet, and invited other members of the public to sign it.
The most egregious violation of academic freedom was an implicit decision by the university to deplatform me. Though I have given dozens of talks in seminars at Stanford over the past decades, in December 2020, my department chair blocked an attempt to organize a seminar where I would publicly present the ideas of the GBD. Stanford’s former president, John Hennessey, tried to set up a discussion between me and others on COVID policy, but he was unable to, owing to the absence of support from the university.
I never received an invitation from the medical school to present a “Grand Rounds,” a high-profile presentation by a faculty member on a topic of importance to the entire medical school. Instead, Grand Rounds and other seminars and webinars at Stanford univocally promoted positions which it is now obvious were devastatingly wrong, but which no one on campus was allowed to debate or challenge. Around the world in 2020 and early 2021, the GBD was a central topic of discussion—but not officially at Stanford.