The worst public health crisis in 100 years became arguably the worst public policy failure in U.S. history because of social pathologies that the pathogen triggered. The coronavirus pandemic is over. What it revealed lingers: intellectual malpractice and authoritarian impulses infecting governmental, scientific, academic and media institutions.
This is unsparingly documented by two Princeton social scientists, Stephen Macedo and Frances Lee, in “In Covid’s Wake: How Our Politics Failed Us.” The most comprehensive and aggressive mobilization of emergency powers in U.S. history, wielded with scant regard for collateral consequences, exacerbated inequalities, included “extraordinary restrictions on free speech” and constituted a “stress test” that “the central truth-seeking departments of liberal democracy: journalism, science, and universities” frequently flunked. Macedo and Lee say the “moralization of disagreements” stifled dissent, employing censorship and shaming.
Incantations to “follow the science” obscured this: Science cannot “tell us what to do” because gargantuan government interventions in society involve contestable judgments across the range of human values. And large uncertainties, requiring difficult choices demanding cost-benefit analyses that were neglected during the pandemic.
The authors, self-described as “on the progressive side,” detail how “the class biases of pandemic restrictions” favored the “laptop class” of knowledge workers and others able to work remotely. “Essential workers,” about one-third of the workforce, largely working class and disproportionately minorities, were expected to carry on. There was no historical precedent for success in what was attempted: using non-pharmaceutical interventions — lockdowns, social distancing, masking, etc. — to stifle a pandemic. And there was, Macedo and Lee report, “no relationship between the stringency of state” restrictions and covid mortality rates.
…..
“The ‘pandemic,’” write Macedo and Lee, “was routinely said to have closed schools, businesses, theaters, travel, and so on, rather than government officials’ decisions.” The authors have produced the most dismaying dissection of U.S. policymaking since David Halberstam’s Vietnam War policy autopsy, “The Best and the Brightest.”
Their book is more dismaying, but also exhilarating. Vietnam revealed the insularity and hubris of a small coterie of foreign policy shapers. Macedo and Lee identify much broader and deeper cultural sicknesses. But their meticulous depictions and plausible explanations of the myriad institutional failures demonstrate social science at its finest.
President Trump fired off a letter to Brazilian President Luiz Inacio “Lula” da Silva Wednesday announcing new 50% tariffs on imports from the South American behemoth. Lula immediately pledged to retaliate.
If both sides carry through on their threats, a trade war is on between the two largest countries in the Western Hemisphere. Lucas Ferraz, a former Brazilian secretary of foreign trade, estimates that the new tariffs could spark a 75% drop in Brazilian exports to the U.S. But it won’t be a party for American businesses either. Brazilian commodities fuel American consumption and production. Notwithstanding Mr. Trump’s assertions to the contrary, the U.S. has a trade surplus with Brazil. American exporters, particularly industrial manufacturers, will be harmed if they lose market access to this huge middle-income economy.
…..
Three months after Mr. Trump’s “Liberation Day,” announcing a spike in U.S. tariffs, we still don’t know the objective of White House trade policy. Some weeks it’s about ridding the U.S. of current account deficits. Sometimes the administration seems happy enough to be collecting “billions and billions” in new tax, er tariff, revenue to offset fiscal deficits. In other instances the big, beautiful endgame appears to be autarky.
Peter Earle makes clear that “Trump’s copper tariffs will hurt US industry — and help China.”
And far from unleashing egalitarianism and social nirvana, the relaxation of shareholder oversight in Nevada appears to have prompted CEO pay to increase and become less tied to business performance. Environmental, social and governance (ESG) scores — which try to measure responsible business practices — fell by 15 percent.
As the authors put it: “If insiders pursued more actions favorable to stakeholders as a result of the law, we would expect the ESG performance of firms to increase. We find that instead ESG performance worsens significantly.” Liberating corporate officers from the tyranny of the shareholder oversight does not necessarily make them more socially enlightened.
The Editors of National Review argue that “the Milei ‘miracle’ is a vindication of free markets.” A slice:
Argentina’s economy is growing at 7.7 percent, according to the latest year-over-year data. It grew by 1.9 percent in April, the most recent month for which data are available. The Chinese economy is growing at a rate of about 5 percent per year (if you believe the official statistics, which there are good reasons to doubt).
Argentina is achieving this growth not through a strategic industrial policy or a mercantilist trade policy. It’s achieving it by rolling back the overextended public sector, slashing the government budget, controlling the money supply, and removing price controls.
Milei eliminated rent controls in Buenos Aires, and the apartment market was flooded with new properties and the average real price went down. He turned a budget deficit into a surplus in his first full year in office. He eliminated half of the country’s cabinet departments.
When Milei took office in December 2023, inflation was 25 percent per month. In May, it was 1.5 percent. The initial shock of the policy change led to a spike in the poverty rate, but it has been falling since the second half of last year and is now lower than when Milei became president.
In 2008, the U.S. and Eurozone economies were about the same size. Since 2010, Europe’s per capita gross domestic product has basically flatlined. Today, the U.S. nominal GDP per capita is almost twice as large as Europe’s. Why? Recently, this paper ran side-by-side headlines: “EU Moves to Extend Climate Goals” and “Eurozone Joblessness Reached 6.3% in May.” (It’s 4.1% in the U.S.) As the Romans used to say: Causae et effectus.
I never thought I’d write these words, but Al Gore is responsible for America’s success in leaving Europe in our dust. He spewed climate-change rhetoric based on flawed models, and Europeans believed him. The German Renewable Energy Sources Act pushed solar panels in not-always-sunny Düsseldorf and elsewhere. High-cost renewables are 55% of the Germans’ energy generation—a burdensome tax on citizens. And Russian natural gas is their backup strategy!
…..
Quick, name a valuable European technology company. Nokia? Ericsson? OK, how about this century? Here you go: Germany’s SAP is growing again because of cloud computing. Great. Dutch ASML, which makes specialized equipment to manufacture semiconductors, is worth $313 billion, down 20% from its year-ago peak. Novo Nordisk and its diabetes-busting weight-loss drug, Ozempic, was for a while worth more than the GDP of Denmark but has since halved due to competition from Eli Lilly and others. Meanwhile, search, social networks and artificial intelligence are a multitrillion-dollar U.S. phenomenon. Our top four publicly traded companies are worth more than all 402 in the MSCI Europe Index. Ouch.
…..
Despite self-inflicted wounds like last week’s copper tariffs and our on-again, off-again going goo-goo for greens, the U.S. is a relative free-market paradise. Whatever the Europeans did on their road to stagnation, let’s make sure we don’t. The ingredients include large government, socialized medicine, limited-hour workforce, anti-innovation Luddite policies, rabid regulatory mandarins, unaccountable plutocrats and antirisk capital markets controlled by large banks.
Shedding central planning’s jackboot works. Ask Poland, which instituted market reforms and a digital focus. Its nominal GDP per capita has grown approximately eightfold since the last Soviet troops left in 1993. It is Europe’s sixth-largest country by GDP and the EU’s fastest-growing large country.
In April, in a discussion about currencies, Larry Summers said, “Europe’s a museum in some ways, Japan’s a nursing home, China’s a jail and Bitcoin’s an experiment.” Sadly, I think Europe is the jail—at least its economy is stuck in a Bastille-like prison, ruled by climate despotism. Where is the key to unlock Europe’s economy?
Roger Pielke Jr. reports on “what Americans really think about energy and climate.”
