My intrepid Mercatus Center colleague, Veronique de Rugy, asks “What could go wrong?” if trade-policy makers take to heart U.S. Trade Representative Katherine Tai’s recent recommendation to increase people’s security by making the world’s trading system less efficient. [DBx: As Ms. Tai’s remark indicates, interventionists are becoming so skilled at spoofing themselves that it’s increasingly difficult for sensible people to out-spoof them.]
Writing in the Wall Street Journal, Phil Gramm and my former Mercatus Center colleague Hester Peirce (who is now an SEC commissioner) decry the Securities and Exchange Commission’s power grab. A slice:
Consider the commission’s climate-change proposal, which seeks to force climate risk to the center of every public company’s boardroom and management discussions. It would push companies to populate their boards and management ranks with climate experts and focus their strategic business and financial plans away from increasing market share and profitability to plans to transition to a lower-carbon economy.
Although technically applicable only to public companies, the proposal would reach every customer and supplier in a public company’s “value chain.” Large public companies would have to collect and report their suppliers’ and customers’ greenhouse-gas emissions, forcing countless small businesses and farmers to undertake expensive guessing exercises about how much of seven different gases they might be emitting.
The SEC, in a tacit acknowledgment of the proposed rule’s compliance burdens, moonlights in the proposal as a management consultant. It suggests that one way to reduce the data collection burden is to work with “suppliers and downstream distributors to take steps to reduce those entities’ … emissions.” The SEC also suggests that public companies make “products that are more energy efficient or involve less emissions when consumers use them,” choose “distributors that use shorter transportation routes,” or “purchase from more emission-efficient suppliers.”
The SEC proposes to turn a disclosure rule into a how-to guide for companies seeking to reduce their carbon footprints. Inducing private companies to take specific steps to meet unlegislated social goals has nothing to do with achieving the SEC’s mission of combating fraud, increasing transparency or fostering market integrity. It would undermine the market efficiency that the SEC’s rules are supposed to support.
The so-called responsible faction in the impending debt debate says that the ceiling should be raised without any risk that the nation default on its debt. The nation’s creditworthiness, they argue, shouldn’t be held hostage by conditions of fiscal discipline. The White House falls into this faction, insisting on a higher ceiling without any strings attached.
A group of about 20 House Republicans—many of whom originally opposed Kevin McCarthy’s speakership—announced their opposition to raising the ceiling without spending cuts. On Bloomberg TV on Wednesday, Rep. Andy Ogles of Tennessee said he was “unwilling to give Biden a blank check.” Yet his emerging faction is being called irresponsible and worse.
But who’s really irresponsible? This small group of Republicans wants to reintroduce fiscal discipline on the Biden administration and congressional Democrats, who have been borrowing and spending like drunken sailors for two years. Since President Biden’s inauguration alone, the national debt has soared by nearly $3.7 trillion.
Was this spending responsible after $4.4 trillion that was borrowed and spent between February 2020 and January 2021 as part of a necessary response to the pandemic and the ensuing economic shutdown? Many economists warned that Mr. Biden’s first spending initiative, the $1.9 trillion American Rescue Plan, was unnecessary and would unleash inflation—and it clearly has.
It’s hardly irresponsible to suggest that we return to fiscal sanity. Any increase in the debt ceiling should be matched by an equal reduction in this slew of post-pandemic domestic spending.
Ireland continued to be a world leader in lockdown safetyism as the pandemic went on. By July 2021, as 90,000 fans filled London’s Wembley Stadium for the final of the Euros, Ireland was the only place in Europe where you couldn’t drink at a pub. Ireland’s lockdowns were so strict and long-lasting that after the first year of the pandemic, Ireland’s Covid debt was €20,000 per head above the EU average.
The madness didn’t abate until late last January. Like some Victorian mesmerist, the Irish government relaxed most of Ireland’s Covid restrictions with a snap of its fingers and – voilà! – everyone snapped out of their trance.
Except they didn’t, really. The restrictions have disappeared but the trance goes on. One year later, there has hardly been any reckoning with the baleful effects of lockdown.
Have we lost our humanity in order to feel safe?
Has fear overridden every rule of decency?
Or have they preyed on our vulnerabilities?
Freedom is our birthright. What has been done in the name of public health policy is disgraceful.
During the COVID-19 pandemic, economy-wide lockdowns, though never part of any pandemic strategy endorsed by the World Health Organization (WHO) or the Centers for Disease Control (CDC), were immediately applied, almost universally around the world, and repeated throughout the first five waves of the disease. During this time politicians, policy analysts, scientists, and public health officials learned a considerable amount about the nature of the virus and the efficacy of lockdown policies. They understood very early on that the virus would not be as lethal as predicted, and by the fall of 2020 they knew that the lockdown policy had only marginal and short-run benefits for public health.
Despite the surge of COVID-19 information, including the knowl- edge that generally speaking only a particular small subset of the population was especially vulnerable, government officials and politicians made no significant change to the lockdown policy. The same ineffective but extremely costly policies were repeated over and over. Furthermore, the enforcement of lockdown policies increased over time despite the overall decline in the lethalness of the virus and the increased abilities to treat it.
I argue that this behaviour was the result of a “double down” political equilibrium. For various reasons, governments around the world panicked in February and March of 2020 and concluded that only a severe lockdown could isolate the virus and stop it from spreading. They quickly became aware of the failure and cost of this action and were faced with a choice: they could admit their terrible mistake or double down, continue with the policy, and hope that an endemic state would come soon. When a second wave of the virus returned in the fall of 2020, the dominant strategy of those jurisdictions that had earlier locked down was to repeat their lockdown policy. This strategy continued until the widespread infections caused by the Omicron variant led to an endemic state and allowed for a declaration of lockdown victory.
The double-down strategy required political support, and this came mostly from two sources: the “laptop class” and other winners from the lockdown; and those terrified enough by the virus that they believed lockdowns were justified. This explains three observations over the first two years of the pandemic. First, the response to COVID-19 has led to large increases in economic inequality. Increased inequality means that the relative positions of those at the top have increased, giving this group more power in the competition for goods and services. Second, there was, from the beginning, a massive campaign of fear-mongering that created false assessments of the actual risk of the virus by the general population. Third, the enforcement of lockdowns and other mandates increased over time.
The Omicron variant did two things. First, it entered the homes of a large fraction of the population and demonstrated the actual risk of the virus at that stage of the pandemic. This led to protests and rebellions as the truth became disseminated. Second, by infecting so many it allowed States to declare that the virus had become endemic. Thus, despite a sixth wave from the BA.2 variant lockdowns came to an end.