≡ Menu

Some Links

Gabrielle Bauer, writing in the Wall Street Journal, explains that normal people say ‘no’ to masks. Two slices:

We’ve won the war. By “we,” I mean normal people who want normal things: community, connection, creativity, with a bit of dancing on the side. For three years, we’ve had to battle those who were unwilling to tolerate any Covid risk and demanded that the world conform to their fears. At times I was sure we would lose.


In October 2020, Tom Frieden, a former Centers for Disease Control and Prevention director, proclaimed that “masks are in and handshakes out for the indefinite future.” A March 2021 Vox article marveled at the oddity of watching maskless gatherings in movies and on TV, as though this behavior belonged to some quaint prehistoric era.

I am happy to report that the prognosticators were dead wrong. The year 2023 is marching to a new drumbeat—an infectiously catchy rhythm that sounds remarkably like the Old Normal. International travel, leisure travel, business travel—it’s all back, and then some. And let me tell you about the medical conferences I attended over the past six months in Barcelona, Milan, New York, Montreal and Miami Beach. There were a lot more handshakes than masks, and these are doctors we’re talking about. People are even blowing out their birthday-cake candles: I’ve seen it happen twice in the past two months. It’s only on Twitter that people still insist we must #BringBackMasks to stave off the apocalypse.

It seems that the expert class and its acolytes hoped Covid would fundamentally change human behavior. That it would make us keep our distance from each other, retreat into ourselves, dedicate more of our lives to gardening, sourdough-bread making and the like. They really wanted this. But it turns out human nature is more powerful than their smug and classist vision of remote work and socializing. With their blinkered focus on a virus, they failed to consider that most of us want more from life than avoidance of illness. We’re even willing to tolerate getting Covid to get to the good stuff. Imagine that.

“In the affluent West our fear of death has made us susceptible to public health tyranny” – so argues David Bell

and yet, David Henderson reports the happy development that some U.S. states have recently taken steps to rein in the gruesome powers of public-health officials.

Anthony LaMesa tweets: (HT Jay Bhattacharya)

Covid lockdowns and restrictions undoubtedly distorted the global economy in ways that we don’t even understand yet.

Thorsteinn Siglaugsson fact-checks the benighted recent ‘fact checker’ of the Cochrane mask study.

Writing in the Wall Street Journal, Charles Calomiris explains what shouldn’t, but what in fact does, need explaining – specifically, government-arranged “deposit insurance encourages bank failures like SVB.” Three slices:

Silicon Valley Bank’s failure makes many Americans grateful for deposit insurance, which protects accounts holding $250,000 or less. But the SVB episode also illustrates the dangers of deposit insurance. A banking system dominated by government insurance, plus too-big-to-fail protection that effectively insures all deposits at the largest banks, lacks essential market discipline, is systemically unsafe, is more likely to see episodes like SVB’s failure, and is more costly to taxpayers and bank customers.

Historically, unprotected well-informed depositors, especially other banks, gauged and responded to each bank’s risk, creating an incentive for banks to manage risk responsibly. Uninformed depositors—like those now at risk at SVB—were free riders on informed discipline. Now, informed depositors can easily get around the $250,000 limit on insurance, which eliminates their incentive to monitor banks. The recent disappearance of the interbank loan market means that banks don’t monitor each other to gauge creditworthiness as short-term borrowers of reserves either. That leaves only bank regulators to mind the store, and they often lack incentives and knowledge to measure and punish risk on a speedy basis. That’s how predictable messes like SVB happen.


Deposit insurance was absent from nearly all other countries’ banking systems before 1980, and from the U.S. (with some temporary exceptions) until 1933. It was adopted for political reasons, and it hasn’t been a stabilizing influence. Virtually every academic study of deposit insurance shows that it promotes, rather than reduces, banking system fragility, with major costs borne by the insurers—which means ultimately by insured depositors and potentially taxpayers. The popularity of deposit insurance reflects public ignorance about its costs and about how a disciplined, uninsured banking system could operate as an alternative.


This episode points to a continuing failure of regulatory discipline, which lacks the incentives and smarts of the market, to substitute for market discipline. It also points to the need for business managers to learn more about banking, and for the Fed to learn that its own monetary-policy mismanagement for many years has lots of consequences for reducing financial stability. Those consequences include the insidious elimination of interbank discipline by ending the last vestige of informed discipline on imprudent risk management by banks.

Wall Street Journal columnist Mary Anastasia O’Grady writes with great good sense about the ‘drug war’ in Mexico. Two slices:

The latest bromide aimed at combating the availability of dangerous drugs in the U.S. comes from conservatives inside the Beltway, who propose to use the U.S. military to take out the cartels by striking Mexico, our sovereign, democratic neighbor. This isn’t only insane, it’s unlikely to alter the availability of street narcotics in the U.S.


Some Americans want other Americans to stop doing so many drugs. Mexicans want this too, since it’s the billions of dollars their rich next-door neighbors pay in cash for the stuff that has empowered the gangsters and overwhelmed the country’s young, weak democratic institutions. The trouble is that the use of U.S. military force on foreign soil has never worked to reduce American demand for illegal drugs, and the unintended consequences could be costly.

The recent saber-rattling by American conservatives is the best thing that has happened to Mexican President Andrés Manuel López Obrador in his four years in office. His policy of nonconfrontation with the cartels has been a failure. As Mexican journalist Jorge Ramos explained in a March 3 column in the newspaper El Norte, there have been 139,077 homicides in Mexico since the start of the López Obrador presidency, which runs another 18 months. To put that in context, there were 124,478 homicides during the full six years of the government of Enrique Peña Nieto (2012-18) and 121,683 killed during Felipe Calderón’s presidency (2006-12).

Students at ‘elite’ law schools behave like thugs.

Samuel Gregg is rightly dismayed by ‘stakeholder capitalism’ (so-called). A slice:

A particularly forceful critic was one of America’s leading corporate law scholars. In his new book, The Profit Motive: Defending Shareholder Value Maximization, Stephen M. Bainbridge has systematized his many criticisms of the BRT’s 2019 statement and used it as one of his “principal foils” for a systematic takedown of the very idea of stakeholder capitalism. This is accompanied by a rigorous defense of shareholder primacy on Bainbridge’s part. He not only shows that maximizing shareholder value is “descriptively accurate” of the corporation’s purpose. He also claims that it can be “normatively appealing.” Bainbridge thus seeks to steal the ethical thunder that stakeholder theorists generally assume to be their ace-in-the-hole.