But government can always get more of what it subsidizes, and in this case it’s a gusher on politically favored industries. No wonder construction spending on factories has soared nearly 80% in the last year, according to the Census Bureau. Public works spending increased (13.6%), especially on electric power projects (36.7%), conservation and development (30.1%), and highways and streets (20.4%).
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Money for these subsidies has to come from somewhere, and that means the private economy in higher taxes and more government borrowing. One early cost may be flagging private research and development. Since the first quarter of 2022, R&D’s contribution to GDP has averaged about half what it did from 2018 and 2021. One reason is the expiration last year of the immediate tax amortization for R&D. But some companies may also be shifting investment from R&D to subsidized activities.
In a competitive market economy like the one the United States has, nobody is pulling the strings. There are plenty of people who would like to be pulling the strings — and not just the politicians and CEOs; many intellectuals and commentators think they should be in charge, too. Of course, every policy has impacts that are different in different places. But nobody actually has the capability to direct trillions of dollars in economic output across hundreds of millions of people over millions of square miles in such a way as to screw specific geographic areas on purpose.
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Sociologist Elizabeth Currid-Halkett has written The Overlooked Americans, a new book about middle America where she pairs a deep look at the data with many interviews of Americans who live in so-called flyover country. She argues in the book that the rural-urban/coastal-middle divide is overplayed by the media in an effort to sensationalize our politics. A closer look at how middle America is faring certainly turns up problems, but it also turns up millions and millions of people who are satisfied with their lives, careers, and communities. (I interviewed her for Capital Writing, and that interview will go up later this week.)
Scott Lincicome reports on yet further evidence of China’s retreat from liberalization. Two slices:
According to various news outlets, the Chinese government has recently stopped publishing information on youth unemployment, deflation, and other statistics that paint a gloomy picture of China’s economy, while also instructing economists in China to “avoid speaking negatively about topics ranging from fears of capital flight to softening prices” and to instead “to present economic news positively in order to increase public confidence.” These moves appear to be part of the longer‐term disinformation trend that, per the Financial Times, began under President Xi Jinping and accelerated in recent months….
As I explained in a column last year, China’s growing transparency issues are not just unsurprising (official Chinese data have long been suspect) but also a fundamental weakness in authoritarian regimes’ economic systems as compared to those of their liberal democratic rivals.
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This systemic weakness, along with several others (see, e.g., this recent column from economist Adam Posen), should give U.S. policymakers and pundits further reason to remain confident in Western democracy and free market capitalism instead of advocating for more “China‐style” industrial policy and similar economic interventions
Pierre Lemieux explores “the simple economics of public toilets.”
Brendan O’Neill reasonably describes net-zero as a “neo-pagan religion.”
Jeffrey Miron asks if Javier Milei is libertarian.
In any case, a scientific study released in August 2023 has no excuse for continuing to promote the fiction that the lab leak theory is misinformation. The theory is now endorsed by both the U.S. Department of Energy and the FBI. The Wall Street Journal has confirmed key reporting that would make the lab leak all but certain—namely, that the first people to contract COVID-19 were scientists working at the Wuhan Institute of Virology.
So-called experts who purport to chronicle and correct the category of speech now known as misinformation have proven themselves more than capable of error, which calls into question their entire project. (The authors have not responded to Reason‘s request for comment.)
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It’s simply untrue that masking children has no negative consequences whatsoever for their development. As Brown University’s Emily Oster noted, “There is direct evidence that masks make it difficult to hear the speaker, and that this may be exacerbated for kids in loud classrooms.”
“It stands to some logic that if you are trying to teach a young child to read—or, really, do anything—it is valuable for them to be able to hear you,” she wrote for Slate. “And social interactions are better if kids can hear each other and be heard by teachers. Putting all this together, it is reasonable to think that some aspects of learning or social skills may be impacted by masks, and indeed others have argued this.”
