The School Shutdowns Remind Us Private Schools Really Are Better

The School Shutdowns Remind Us Private Schools Really Are Better

05/22/2020Atilla Sulker

The present COVID-19 pandemic has left public schools scrambling to find ways to dampen the impact on students. Some public schools have switched to virtual instruction, while others have simply sent students home with passing grades.

For many public schools, the transition to virtual instruction—if ever initiated—took weeks. Others have been lukewarm in their implementation of virtual instruction. In April, the New York City Department of Education made a sudden default on its initiative to have instructors use Zoom remotely, leaving many teachers with no efficient alternative.

Fairfax County public schools continuously failed at delivering stable virtual instruction. The list could go on and on. What do all these cases have in common?

They demonstrate a lack of accountability from public school policymakers—both county and state superintendents, and city and state-level executives.

Compare the previous examples to how charter and private schools, such as Thales Academy, are handling the transition. Thales’s campus in Franklin, Tennessee is offering free virtual instruction for local K–5 students. No prior or future commitments are required for families to receive remote instruction. According to Thales administrator Rachael Bradley, all other Thales campuses transitioned such that “students did not miss a day of learning.” Additionally, Bradley notes that students and teachers were already used to the technology used in virtual instruction.

Thales is not the only example of school choice and private sector solutions remedying public school policy failures. In San Diego County, charter schools, equipped with virtual instruction far in advance, transitioned to virtual learning in days, as opposed to weeks. In Tallahassee, Florida, one private school started virtual instruction right at the end of spring break.

There is a sharp contrast between how private and charter schools have handled the pandemic compared to public schools. Overall, the former has been far more effective. The burden put on parents by schools simply handing out worksheet packets is great, as parents must take time out of their work schedules to play the role of teachers. Insufficient instruction is particularly detrimental to primary students, who are in the foundational stage of their academic careers.

The crisis underscores lack of accountability from policymakers in nonpandemic times as well. Why would it be unreasonable to foresee the prospect of needing to switch to virtual learning for other reasons, e.g., natural disasters?

With a similar degree of unaccountability, public schools have gotten so used to churning out graduates, regardless of merit, that the decision to “pass” everyone, as aforementioned, becomes easy.

Imagine if private or charter schools waited for weeks to transition to virtual instruction. Imagine if they sent students off with “passing” grades. They would be severely reprimanded by parents. Why are we not holding public schools to this same standard?

Policymakers can exempt themselves from responsibility with hubris like, “What we do is not easy,” or “We’re under a lot of pressure.” But this certainly wouldn’t fly for private school administrators. If crises are the ultimate test of effective leadership, then this pandemic has much to tell us.

Even more telling is how policymakers respond to parents’ search for alternatives. In Kentucky, for example, the GOP-dominated general assembly blocked the possibility of tax-credit scholarships for low-income families. Why are parents looking for alternatives greeted with such hostility from public servants?

Truthfully, teachers and students like engagement. They don’t like being given vague promises like “online instruction will be available in the coming days ” Public schools have become so factory-esque, that they lack the capacity to come up with creative solutions in times like these. But the root of this goes back far before the pandemic.

Public schools have made the metric, i.e., graduation rates, the target. It is a classic case of Goodhart’s Law. Hence the reason it is easier to “pass” students than to implement real learning. The time to rethink the place of the colorless public school is imminent.

Reprinted from the Epoch Times.

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Notes on Trump's Executive Order for Tech Companies

1 hour agoJeff Deist

Donald Trump's executive order issued earlier this week purports to prevent online censorship by effectively instructing federal agencies to reinterpret the Communications Decency Act of 1996 (CDA). In particular, Trump has a well-founded complaint with the infamous section 230 of the CDA, which grants tech companies a certain level of immunity from various civil lawsuits, including defamation lawsuits. By doing so, section 230 not only attempts to preempt state law to the contrary—federal preemption is almost always bad— but also creates a class of actors that enjoys the status of a neutral platform or common carrier but exercises editorial discretion.

Remember, in 1996 social media did not exist. Search engines like Alta Vista and were rudimentary; most people still typed site addresses into their browsers. The CDA was aimed primarily at internet service providers such as AOL, which Congress ostensibly wanted to shield from any liability for the actions, communications, or content of users. After all, when two individuals engage in a criminal conspiracy by phone prosecutors don't indict the cellular network provider. The CDA made sense in an era when the internet was in its infancy.

But fast-forward twenty-five years, and social media companies have been thrust into the role of "community standards" police. Search engines, particularly Google, are the gatekeepers and curators of the information we consume. These tech companies now appoint themselves arbiters of truth and propriety, and not only with regard to politics and campaigns. Hate speech and harassment, both ambiguous and ever shifting, are grounds for removal or suspension from platforms. Unorthodox or politically incorrect views on scientific issues surrounding global warming, vaccines, and COVID-19 are regulated by invisible algorithms or unaccountable employees of tech companies. "Bad" websites and blogs disappear from search results, or are buried so deep as to become invisible. 

By any measure, these actions by technology companies—banning, suspending, shadow banning, and demonetizing—are based on the content involved or the identity of the user. In both cases, editorial judgment is applied. This is inescapable. So to the extent that the CDA immunizes editorial decision-makers or their tech company employers against liability for damages from lawsuits otherwise recognized by state law or common law, libertarians have every reason to object. But as with most cases of favoritism in law, the answer is repeal of special privileges rather than more legislation. 

A few additional summary comments:

  • Executive orders are inherently suspect and generally bad, not simply because of (at this point laughable) constitutional concerns, but because they establish another layer of de facto "laws" for which you and I have little legal recourse. If the CDA needs amending, let Congress do it. Better yet, scrap it.
  • Yes, Facebook, Google, Twitter, Amazon et al. are private companies, despite their deep entanglements (including contracts) with the federal government. Virtually every industry and every large company is in bed with Uncle Sam, from subsidies and lobbying to protectionist legislation. If we allow such entanglements to justify even deeper levels of regulation, we only further erode what ought to be a bright-line distinction between private sector and state.
  • Yes, these companies have deeply illiberal biases, and even outright illiberal agendas, from a libertarian perspective.  
  • No, private companies are not required to give you or anyone else access to their platforms.
  • No, the First Amendment does not apply to private companies.
  • "Fact checking" is inherently and inescapably political. Who are the disinterested angels charged with performing  these checks? Which facts are checked, and whose facts are checked? What about half-truths and distortions, as opposed to outright falsehoods? 
  • We are all "media" in an age of instantaneous social sharing platforms and camera phones. The First Amendment did not create or contemplate a special class of institutional press that enjoys enhanced protections from government. Kids on bikes have as much right to "cover" the situation in Minneapolis as CNN, and your Facebook posts deserve the same protections as Wolf Blizter's nightly show.

What to do, then? Peter Klein lays out one path forward:

  • Repeal the CDA. 
  • Enforce contractual agreements between platforms and users.
  • Avoid all attempts at viewpoint neutrality regulation.
  • Remove government-created entry barriers for new entrants (including the CDA). 
  • Don't treat information as property (e.g., don't act as if users "own" "their data" and enforce regulations on portability).
  • Finally, Trump simply should move to Gab or a similar platform. Many of his 85 million followers would follow, and this would do more to "punish" Twitter (and encourage new competitors) than any legal action.
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The Importance of "Fedspeak"

05/28/2020Robert Aro

The Webster's New World College Dictionary defines “Fedspeak” as:

(informal) Impenetrable economic jargon used by the US Federal Reserve.

It’s not a condition that affects the chair of the Federal Reserve only; the wave of Fedspeak has been exhibited by members of its inner circle as well. Just last week, in a speech made to the New York Association for Business Economics, Vice Chair Richard H. Clarida said:

On March 16, we launched a program to purchase Treasury securities and agency mortgage-backed securities in whatever amounts needed to support smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions.

More than $2 trillion were spent on these two asset purchases alone—a figure so large on a subject known to so few. Most will be unable to grasp what this implies for their own lives and future. When the vice chair says that the purchases help “support smooth market function,” who can stand up and ask him to succinctly define this? And further, who will challenge the assertion? How “smoothly” should a market function, and when will they know when it’s smooth enough?

The problem is that this tinkering with the money supply affects the majority of society, i.e., those who are not financially well-to-do central bankers. Ultimately, it’s those on Main Street who will pay for this intervention while buried in an avalanche of debt and stuck at home under government quarantine. Who has time to decode the reflections of a central banker? Thus, it continues. Main Street remains in the dark, guided by those who are equally blind to the principles of economics.

Fedspeak knows no bounds, as its reach has even infiltrated the European Central Bank (ECB), whose latest meeting minutes show a similar use of nebulous ideas when looking at the various risks to economic activity that the virus caused. They noted:

Attention was drawn to the fact that precautionary saving was already increasing and, if consumers did not regain confidence quickly after containment measures were lifted, there was a risk that demand would remain depressed.

The comment alludes to an ideal equilibrium that the virus has thrown off and that therefore requires intervention. Naturally, the central banker sees a problem with savings and demand, he just cannot articulate what the problem is in any discernible way. It is implied that an increase in savings and a decrease in demand, which may be partly due to a lack of confidence, pose a risk to the economy. But how much savings is too much? And how much demand is too little? This remains unknown to all except the central banker.

The Fed’s meeting minutes, also released last week, were no different. Almost as if the Fed and the ECB had had the same meeting, the Fed similarly observed that:

household spending would likely be held down by a decrease in confidence and an increase in precautionary saving.

They use these types of subjective observations, combined with data points, in order to plan the economy. Nearly imperceptibly, they justify their actions with sentences making subjective claims. The importance of Fedspeak cannot be understated. If the general public, academia, and elected officials demanded that the Fed prove how much stimulus, demand, savings, and money supply are needed to save the economy, the very existence of the Fed could be thrown into question. This would be a great thing for society, but very bad for the Fed and the economists it employs.

At the conclusion of the Fed meeting,

Members agreed that the Federal Reserve was committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

With nine credit facilities already running or soon to be in place, the Fed will print as much money as possible to make sure any crisis will be contained. At that point we can only hope that the public will not be looking to the Fed for answers, partly because the Fed is the cause of the problem, but also because any explanation would amount to nothing more than “impenetrable economic jargon.”

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The Cost of Lockdowns in Human Health and Human Lives Is Becoming Increasingly Clear

05/27/2020Ryan McMaken

The cost of destroying the economy in the name of saving lives from COVID-19 is becoming increasingly apparent, and the details of just how costly the "lockdown" strategy will be for countless human beings continue to emerge.

In the past, we've examined the long-term cost of unemployment on mental health, physical health, and long-term earnings. In short: unemployment kills.

Stay-at-home orders and other sorts of police-enforced social distancing create conditions that lead to more child abuse, domestic abuse, suicide, drug abuse, and even stress-related death through ailments like heart disease.

Consequently, the shortsighted efforts at locking down entire populations by biologists, epidemiologists, and other "experts"—who apparently have little or no knowledge at all about the physical, social, and psychological effects of wealth destruction on human beings—have set the stage for the impoverishment of millions in the United States alone. (The effects in the developing world will be far worse.)

On Monday, for example, physician Scott W. Atlas and economists John R. Birge, Ralph L. Keeney, and Alexander Lipton noted in The Hill that efforts to brand the downside of shutdowns as purely economic problems gravely misinterpret the reality of wealth destruction. The authors write:

The policies have created the greatest global economic disruption in history, with trillions of dollars of lost economic output. These financial losses have been falsely portrayed as purely economic. To the contrary, using numerous National Institutes of Health Public Access publications, Centers for Disease Control and Prevention (CDC) and Bureau of Labor Statistics data, and various actuarial tables, we calculate that these policies will cause devastating non-economic consequences that will total millions of accumulated years of life lost in the United States, far beyond what the virus itself has caused.

Statistically, every $10 million to $24 million lost in U.S. incomes results in one additional death. One portion of this effect is through unemployment, which leads to an average increase in mortality of at least 60 percent. That translates into 7,200 lives lost per month among the 36 million newly unemployed Americans, over 40 percent of whom are not expected to regain their jobs. In addition, many small business owners are near financial collapse, creating lost wealth that results in mortality increases of 50 percent. With an average estimate of one additional lost life per $17 million income loss, that would translate to 65,000 lives lost in the U.S. for each month because of the economic shutdown.

In addition to lives lost because of lost income, lives also are lost due to delayed or foregone health care imposed by the shutdown and the fear it creates among patients. From personal communications with neurosurgery colleagues, about half of their patients have not appeared for treatment of disease which, left untreated, risks brain hemorrhage, paralysis or death.

Similarly, the New York Post reported yesterday that chemist Michael Levitt has concluded that the lockdowns saved no lives at all:

“I think lockdown saved no lives. I think it may have cost lives,” Levitt, who is not an epidemiologist, told the publication.

“There is no doubt that you can stop an epidemic with lockdown, but it’s a very blunt and very medieval weapon and the epidemic could have been stopped just as effectively with other sensible measures (such as masks and other forms of social distancing),” he added.

Levitt attributed the additional lives lost to other dangers from the fallout of the lockdowns, such as domestic abuse and fewer people seeking health care for ailments other than the virus.

“It will have saved a few road accident lives, things like that, but social damage—domestic abuse, divorces, alcoholism—has been extreme. And then you have those who were not treated for other conditions,” Levitt told the newspaper.

Supporters of lockdowns may be quick to claim that these commentators are not epidemiologists. Yet the epidemiologists—at least the ones at the "official" government offices—have shown little insight in recent months. Their models have consistently been wrong. Nor do the epidemiologists appear to have any idea of the lethality of the COVID-19 virus. After insisting for months that the virus was perhaps more than ten times as deadly as the flu, the CDC has now slashed the fatality rate to a mere fraction of previous estimates. The epidemiologists' only tool has been to order healthy people to stay home, even as demand at food banks triples as families queue in order to avoid starvation.

Now, Anthony Fauci, who in April was insisting that it would be impossible to even relax stay-at-home orders until there is a vaccine or until there are "no new cases, no deaths for a period of time," has totally abandoned this position. Fauci now admits that his "lockdown until vaccine" position would cause irreparable damage:

We can't stay locked down for such a considerable period of time that you might do irreparable damage and have unintended consequences including consequences for health. And it's for that reason why the guidelines are being put forth so that the states and the cities can start to reenter and reopen.

Of course, anyone who deals in interacting with the real world (i.e., not lifelong bureaucrats like Fauci, who needs not exhibit any actual competence to collect his $400,000 paycheck) always understands that preserving and augmenting wealth is key in enhancing health and the quality of life.

Not surprisingly, this has already been seen in the empirical evidence. As M. Harvey Brenner has noted in the International Journal of Epidemiology,

the large and growing literature on unemployment and health is highly consistent in demonstrating elevated morbidity and mortality associated with unemployment and withdrawal from the labour force….Economic growth, cumulatively over at least a decade, is the central factor in mortality rate decline in the US over the 20th century. (emphasis added)

In other words, to reduce mortality, we need to protect the creation and preservation of wealth. Bureaucrats and social democrats may sneer that this puts GDP growth before saving lives, but the reality is that economic growth translates into saving lives. The lockdown advocates may refuse to admit this, but the evidence is abundant.

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In the Lockdown Fight for Local Control, Colorado Counties Begin to Ignore State Edicts

05/27/2020Ryan McMaken

Last month, Weld County, a Republican-dominated county in the northern part of the state, announced it would no longer be enforcing state edicts requiring the closure of businesses for purposes of government-mandated social distancing.

Specifically, the county commissioners released a statement saying that it was up to businesses to determine for themselves whether or not they could safely open:

Weld County Government is not opening any businesses, just as Weld County Government did not close any businesses. That said, each commissioner has received comments from constituents struggling to make ends meet, pay their bills, and take care of their families who have said they are going to open their businesses.

So, Weld County Government took the proactive response of preparing best practices and guidance that could be used as business owners look to reopen—whenever they feel comfortable to do so. An informed public is a strong public.

The same preventative measures need to be heeded—we’ve said that. Expectations need to be managed—we’re doing that. What we aren’t going to do is pick winners and losers as to who gets to restart their livelihoods.

And at the end of the day, everyone has freedoms: freedom to stay home, freedom to go out, and freedom to support whatever business they want to support.

Of course, the real concern is whether or not county or state bureaucrats will show up with armed police officers and shut the business down, as has happened in some cases.

On the county level, at least, it appears the commissioners have instructed county bureaucrats to not intervene. At least according to one business owner. The owner of El Charro restaurant reported earlier this month that

her husband called the Weld County Health Department and was told they would not shut them down or penalize them for re-opening.

“They didn’t say we could open," said the general manager and Kelley's son, Harrison Chagolla. "They just said we’re not going to shut you down, we won’t stop you, which as far as we’re concerned, that’s permission enough."

The restaurant has been open at limited capacity since Wednesday. Because they are seating people at every other table to continue social distancing, the Chagollas said they have had to turn customers away.

Naturally, the governor of Colorado, Jared Polis, condemned the move and threatened to withhold emergency funds from the county. In other words, in order to enforce executive orders that he claims keep people safe, Polis plan to withhold funds designed to help people cope with COVID-19. It's a rather vindictive and capricious position to take, but it may have been the only tool the governor was willing to use.

In response, the county reported that it already has the funds Polis threatened to withhold, and says it doesn't plan to seek any additional funds.

The state maintains that it still has the ability to go in and revoke state-issued business licenses, although it is unclear that this has happened in the month since the controversy first erupted. It may be that the county has called the governor's bluff.

[RELATED: "The Shutdown May Soon Collapse in Pennsylvania Thanks to Local Resistance" by Zachary Yost]

Perhaps emboldened by the Weld County refusal, Elbert County, just east of the Denver metro area, has also announced it will no longer be adhering to the state's social distancing mandates. As reported by Elbert County News:

 

The Elbert County Board of County Commissioners has voted unanimously to allow graduation ceremonies for Simla, Kiowa and Elizabeth high schools, and to allow houses of worship to resume in-person services without capping attendance.

The move on May 20 came despite county officials not yet having received approval of a partial waiver request the county had submitted to the Colorado Department of Public Health and Environment for exemptions from the state's COVID-19 guidelines.

The commissioners' vote came after repeated attempts to seek a "variance" from the governor's office allowing for greater flexibility from state mandates. The governor's office has encouraged applications of this sort, but the commissioners reported that the governor's office was apparently incapable of processing the request.

So, the county was forced to go out on its own.

In other words, the state government couldn't get its act together, so the county government had to make a judgment call. The governor's office has not threatened any action in response to Elbert County's "disobedience." And none may be coming. After all, sending state troopers to close down church services and small businesses is not necessarily a winning proposition for a governor where statewide offices are still competitive for both parties at election time.

Meanwhile, in El Paso County, home of Colorado Springs with half a million people, the district attorney and county commissioners are decidedly unenthusiastic about bringing charges against those violating state orders.

These local acts of noncooperation serve an important function in applying pressure to the governor's office, and this illustrates the difficulty in maintaining lockdown orders as time goes on. After all, the initial closures benefited from widespread public fear over the COVID-19 virus and the common perception that it could prove to be deadly on a scale similar to the 1918 flu epidemic. Thus compliance was generally voluntary and easy to maintain. It has now become clear that a chaotic and highly deadly pandemic will not play out the way many alarmist media outlets and government experts insisted it would. For example, the CDC has downgraded the disease's fatality rate, and the public has noticed that hospitals never were anywhere near exhausting capacity.

Soon, however, the county government's opposition to lockdown orders will become academic. Today, restaurants opened to dine-in service in Colorado for the first time since March. The state can either continue to soften its stance on lockdowns or risk losing credibility with the growing segment of the population which is prepared to face the risk of COVID-19 infection by participating in the regular activities of daily life.

Of course, there is political pressure coming from other corners as well. The state now is looking at the need for a 10 percent cut to spending. And that's just for starters. Much larger cuts are likely coming in the future, since restaurants and retail outlets are producing only a small fraction of former revenues. County and city governments won't be content to continue lockdowns much longer.

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The CDC Slashed the COVID-19 Fatality Rate to a Fraction of Earlier Estimate Used to Justify Lockdowns

05/26/2020Ryan McMaken

Governments throughout the world and across the US justified extreme, draconian, undemocratic, and unconstitutional (in most US states) "lockdown" and stay-at-home orders on the grounds that the COVID-19 virus was exceptionally fatal.

In March, the World Health Organization (WHO) was claiming that the fatality rate was a very high 3.4 percent.

Yet as time went on, it became increasingly clear that such high estimates were essentially meaningless because researchers had no idea how many people were actually infected with the disease. Tests were largely being conducted on those with symptoms serious enough to end up in emergency rooms or doctors' offices.

[RELATED: "The Experts Have No Idea How Many COVID-19 Cases There Are" by Ryan McMaken]

By late April, many researchers were publishing new studies showing that the number of people with the disease was actually much higher than was previously thought. Thus, it became clear that the percentage of people with the disease who died from it suddenly became much smaller.

Now, the Centers for Disease Control and Prevention (CDC) has released new estimates suggesting that the real fatality rate is around 0.26 percent.

Specifically, the report concludes that the "symptomatic case fatality ratio" is 0.4 percent. But that's just symptomatic cases. In the same report, the CDC also claims that 35 percent of all cases are asymptomatic.

Or, as the Washington Post reported this week:

The agency offered a "current best estimate" of 0.4 percent. The agency also gave a best estimate that 35 percent of people infected never develop symptoms. Those numbers when put together would produce an infection fatality rate of 0.26, which is lower than many of the estimates produced by scientists and modelers to date."

Of course, not all scientists have been wrong on this. Back in March, Stanford scientist John Ioannidis was much, much closer to the CDC's estimate than the WHO. The Wall Street Journal noted in April:

In a March article for Stat News, Dr. Ioannidis argued that Covid-19 is far less deadly than modelers were assuming. He considered the experience of the Diamond Princess cruise ship, which was quarantined Feb. 4 in Japan. Nine of 700 infected passengers and crew died. Based on the demographics of the ship’s population, Dr. Ioannidis estimated that the U.S. fatality rate could be as low as 0.025% to 0.625% and put the upper bound at 0.05% to 1%—comparable to that of seasonal flu.

Not that this will settle the matter. Proponents of destroying human rights and the rule of law in order to carry out lockdowns will continue to insist that "we didn't know" what the fatality rate was back in March. The lack of evidence, however, didn't stop proponents of lockdowns from implementing policies that destroyed the ability of families to earn a living, and which also created social conditions that caused child abuse and suicides to spike.

But for more sane people, extraordinary claims require extraordinary evidence. Those who have claimed that lockdowns are "the only option" had virtually no evidence at all to support their position. Indeed, such extreme over-the-top measures as the general lockdowns required an extreme level of high-quality, nearly irrefutable evidence that lockdowns would work and were necessary in the face of a disease with an extremely high fatality rate. But the only "data" the prolockdown people could offer was speculation and hyperbolic predictions of bodies piling up in the streets.  But that became politically unimportant. The people who wanted lockdowns had gained the obeisance of powerful people in government institutions and in the media. So actual data, science, or respect for human rights suddenly became meaningless. All that mattered was getting those lockdowns. So the lockdown crowd destroyed the lives of millions in the developed world—and more than a hundred million in the developing world—to satisfy the hunches of a tiny handful of politicians and technocrats.

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New Donation to the Mises Institute Archives: The Voluntaryist Collection

05/22/2020Mises Institute

We received a new donation from Mr. Carl Watner entitled The Voluntaryist Collection. The highlight of the donation includes the six-volume set: The Collected Works of Lysander Spooner. Within the collection is a series of personal inscriptions that Mr. Watner collected at libertarian conferences over the years, including by Murray Rothbard, George Smith, Leonard Liggio, Joe Peden, Mike Coughlin, Charles Shively (editor of the six volumes), Daniel Siegel (publisher), Wendy McElroy, Chuck Hamilton, John Mueller (cofounder of Laissez Faire Books), and Robert LeFevre.

Mr. Watner's generous gift will be included in the Mises Institute archives, alongside the donations of great libertarian thinkers such as Rothbard, Dr. Robert Higgs, Dr. Ralph Raico, Mr. LeFevre and the Freedom School, and more.

The Mises Institute archives remain one of the world's leading research centers for Austrian economics and libertarian thought, providing a unique resource for research fellows who continue to make their own contributions to the ideas of liberty.

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Oliver E. Williamson (1932–2020)

05/22/2020Peter G. Klein

Oliver E. Williamson, 2009 Nobel laureate and founder of "transaction cost economics," has died at age 87.

As I wrote in 2009,

Oliver Williamson's Nobel Prize, shared with Elinor Ostrom, is great news for Austrians. Williamson's pathbreaking analysis of how alternative organizational forms — markets, hierarchies, and hybrids, as he calls them — emerge, perform, and adapt has defined the modern field of organizational economics.

Williamson is no Austrian, but he is sympathetic to Austrian themes (particularly the Hayekian understanding of tacit knowledge and market competition). His concept of asset specificity enhances and extends the Austrian theory of capital and his theory of firm boundaries has almost single-handedly displaced the benchmark model of perfect competition from important parts of industrial organization and antitrust economics.

He is also a pragmatic, careful, and practical economist who is concerned, first and foremost, with real-world economic phenomena, choosing clarity and relevance over formal mathematical elegance. For these and many other reasons, his work deserves careful study by Austrians.

Read the full article here.

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The "New Normal" May Not Be What the Lockdown Supporters Want It To Be

05/21/2020Ryan McMaken

Donald Trump today announced that "we are not closing our country" if a second wave of COVID-19 hits the country later this year.

Given that Trump is not the one who decides whether or not state governments attempt to impose forced social-distancing measures, we can nonetheless interpret his statement as an announcement that he plans to use his position to oppose efforts to impose lockdowns in the in the future.

But this raises a larger question: how tolerant will the public be toward additional lockdowns in the future as the economy sinks and the effects of unemployment and economic deprivations sink in?

In some places, the answer might be "very tolerant." But in many states and areas, politicians may find that the answer is "no way in hell."

The First Lockdown Was a Sucker Punch

It's understandable why so many Americans were tolerant of the first wave of shutdowns. Fed a steady diet of panicky declarations of an impending viral apocalypse through social media and mainstream media, a majority of Americans—possibly a lopsided majority—became frightened. It is likely that even those who are disinclined to believe lurid media stories of death and destruction took a "wait and see" attitude. People simply didn't know what was going to happen.

Technocrats and politicians were quick to take advantage of this temporary paralysis. Lifelong power-obsessed government bureaucrats like Anthony Fauci and his state-level counterparts demanded that the government suspend the rule of law and impose emergency measures unparalleled in scope in American history. Businesses were forcibly closed. Governors, mayors, and police threatened arrest, imprisonment, fines, and revocation of business licenses for those who remained "disobedient."

Employment collapsed. Livelihoods were destroyed. Since hospitals and medical facilities were largely closed to all but suspected COVID-19 patients, many went without medical care and diagnoses for deadly conditions.

One might say that the enthusiasm and speed with which the government abolished human rights could be described as a "sucker punch." The voters and taxpayers didn't know what hit them.

And for a period of two to four weeks, there was barely any resistance at all. Many were still unsure if half their neighborhood would die of the new disease. Or maybe there really would be corpses piled up in the streets nationwide, since Americans were told that what had happened in Iran or Wuhan would soon happen in the US.

But then it didn't happen. This isn't to say that there wasn't an increase in total mortality. There was, and much of it—but certainly not all of it—was due to COVID-19.

But it soon became clear that human society was not going to descend into plague-induced wreckage. Outside of a few hard-hit cities, hospitals never got even close to the dystopian people-dying-in-the-halls scenario that people were assured would happen. Now, of course, as some states begin to scale back their lockdowns, there's still no sign of corpses piling up in the streets. Yes, death by disease continues, just as it does every day of every year. And there is more death now than there was last year. This includes the "lockdown" states, after all, since there is no evidence that lockdowns actually work.

But this is what always happens with pandemics. It happened in 1958. It happened in 1969. But back then, Americans didn't destroy wholesale the rule of law and human rights out of fear.

The "New Normal" May Just Be a World with Higher Mortality

But for many that fear may be wearing off. After all, people come to terms with risk fairly quickly. There was once a time, after all, that human beings found the speed of a locomotive or a motorcar terrifying. Yet, within a matter of years, many Americans were happy to ride trains and drive cars. And cars didn't even usually have seat belts until the 1960s!

The "new normal" became a world of widespread auto accidents, and auto deaths per million in the early days of automobiles were double what they are today.

And many Americans may soon decide that the "new normal" is a world with more risk of dying of COVID-19. But for many it's a risk that they have decided must be faced, especially when there are many other risks to balance against. After all, It is now becoming clear that efforts to "fight" COVID-19 through lockdowns will lead to more deaths from cancer, from suicide, and from drug overdoses. Just as many Americans decided to face the risk of a deadly car crash for the sake of avoiding the inconvenience of a horse and buggy, so many Americans will decide to "risk it" in a world with COVID-19.

Moreover, the longer lockdowns remain relaxed, the more routine it will become to have lunch with a friend at a restaurant, go to the dentist, or get a haircut. Once people do it a few times without becoming deathly ill, they'll want to keep doing it.

Certainly, there will be no shortage of lockdown advocates who will demand more government coercion, more shutdowns, and more state violence to enforce them, complete with arrests, fines, and more. Many—including people who have no problem with death in the form of abortion and euthanasia—will wrap themselves in the claim "all life is precious" and attempt to shout down and shame those who advocate for human rights and and end to government by decree.

But will that be enough? In some places it may not be enough to gain obedience to a second lockdown.

So the question comes down to this: will Americans fall for the sucker punch twice? Patrick Buchanan doesn't know, although he asks the question, and suggests:

If there is a sudden resurgence of the coronavirus, a second wave, and the media elite and blue state governors demand a new shutdown, a new closure of beaches, parks, shops, restaurants and churches, will the people of this republic comply with those demands or defy them?

Will the nation answer back to the elites: We did that. We sheltered in place. We wore the masks. We socially distanced. We stayed in our homes. We stayed home from work. We have done all we were told to do to contain the virus. But, now, with the shutdown having put 36 million Americans on unemployment and sunk our GDP to Depression-era levels, we're going back to work.

The political divide has already begun to appear.

Indeed, looking at the issue through "the political divide" may be the most instructive. Americans are choosing sides. And passions run high. Asking your neighbor or colleague about his views on COVID-19 is now about as likely to lead to an argument as asking your neighbor for his views on slavery in 1859.

Attempts at another round of lockdowns will only make things worse.

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Paul Cantor on Zombies, Pop Culture, and the CDC

05/21/2020Ryan McMaken

Paul Cantor, longtime Mises Institute scholar and author of Pop Culture and the Dark Side of the American Dream, recently was featured in an Arizona State University miniroundtable "The Walking Dead, the Post-Zombie Apocalypse, and the American Capacity for Resilience." Cantor discusses how popular culture has partly formed our views of pandemics. Among the evidence is the portrayal of the CDC as an organization that is either evil or incompetent. Or both. The Walking Dead, for example, implies the CDC may have caused the zombie pandemic. Cantor points out some eerie parallels between the world of The Walking Dead and the world of the 2020 pandemic. Here is the video:

Cantor also mentions the bizarre comic book put out several years ago by the CDC called Zombie Pandemic. It can be read here.

zombie
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The Fed Does 60 Minutes

05/21/2020Robert Aro

One of the most powerful men in the world, Chairman of the Federal Reserve Jerome Powell, appeared on 60 Minutes over the weekend. The interview did not mention Austrian economics, a return to the gold standard, or a new laissez-faire stance by the Fed. But there are some thought-provoking sound bites.

When asked if the Fed had simply flooded the system with money, Powell responded, “Yes. We did.” When asked where the money came from, he replied:

We print it digitally. So as a central bank, we have the ability to create money digitally. And we do that by buying Treasury bills or bonds for other government-guaranteed securities. And that actually increases the money supply.

Although true (and completely ludicrous) it’s nothing new, as central bankers seem to have no problem supporting inflationism. However, his follow-up sentence was patently false:

We also print actual currency and we distribute that through the Federal Reserve banks.

It is in fact the US Treasury that prints every Federal Reserve note and gives it to the Fed, which then distributes to banks. Why does the world even need the Federal Reserve? And why doesn’t the US Treasury cut out the middleman and print its own currency? The interview continued with the usual fawning over central bankers. Scott Pelley couldn’t help mention how:

Some of the best economic analysts in the world report to you.

One can only wonder how many Austrian economists work at the Fed and what types of analysis could be provided when analyzing trillions of dollars of “stimulus” required to fight a “liquidity crisis.”

Assurances to the market and hopes for future debtors to the Fed were also included:

I will say that we're not out of ammunition by a long shot. No, there's really no limit to what we can do with these lending programs.

Is this not the most alluring trait of money created out of thin air and backed by nothing? Having no limit on the amount which can be generated? Most of the Fed facilities haven’t even opened up yet, and Congress is already cooking up another trillion-dollar spending bill. We can only guess how much money will be “printed” by the time the crisis is over. If the Fed’s balance sheet doubled by this time next year, would anyone really be surprised?

Oddly enough, the chairman mentioned something that was entirely honest:

We don't have oversight over Congress. Quite the reverse, actually. We're a creature of Congress. And they have oversight over us.

Congress created the Fed. Contrary to what we’ve been told, the it cannot save the world by creating more money. It hasn’t worked before, and it won’t work now. In terms of oversight, if Congress wants more transparency, it can simply demand it, repealing any privacy that the Fed has. America survives not because of the Fed, but despite it. Just as an act of Congress created it, an act of Congress can end the Fed.

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