People often say things like “stay calm and don’t panic.” But there are situations where panic is the appropriate response. In retrospect, it would have been far better if Americans had panicked in January and February in response to the Covid-19 threat. Had we done so, it’s likely that more than 100,000 deaths would have been prevented in America, and our economy would have taken a smaller hit (in the long run; last winter it would have taken a bigger hit.) We would have looked more like Australia.

When there’s a pandemic, people panic by engaging in extreme social distancing. They also ignore the experts and wear masks on their faces. But that’s exactly what we all should have done back in February!

Of course this is a jab at Trump’s silly justification for lying—that he was trying to prevent panic. All Trump has done over the last 4 years is try to create nonstop panic about Muslim immigrants, crime, China, and a million other so-called threats. Whatever you think of Trump, preventing panic is not high on his agenda:

Obviously Trump was not trying to prevent panic, he was trying to cover up the problem. He’s been against social distancing, testing, masks, indeed almost everything that works.

On the other hand, this isn’t really about Trump, as the policy failure last winter involved 99% of our society, including bloggers like me. Trump was especially bad for an especially long period, but the entire establishment (both political parties) blew it last winter. We all should have panicked.

Off topic: The GOP campaign is not particularly effective this year, with one exception. The SJWs are creating lots of Trump voters through their misguided cultural revolution:

Wisconsin was the decisive state in 2016, and it likely to pick the winner again this year. And now you have Jill Stein supporters in the badger state trending toward Trump because they are so annoyed by “microaggression” seminars.

I never attended Bentley’s diversity seminars, but several of the people I spoke to who did described it as an awful experience. One was literally in tears by the end of the seminar. When Trump is re-elected in November, the SJWs will be able to take credit. Perhaps it’s all part of their “heightening the contradictions” strategy for world revolution.

Philippe Lemoine has a four part series on how China handled the Covid-19 epidemic. It’s far and away the definitive account of this issue; no other article even comes close.

I discussed part one in a previous Econlog post; here’s a excerpt from part 2:

[T]he claim that Western countries would not have botched their pandemic response had China not lied is not simply false, it is a transparent attempt by Western governments to deflect blame for their own shambolic incompetence. (This essay about the European pandemic response, or lack thereof, is particularly instructive, but one could say very similar things about the response in the US and several other countries.) In fact, many countries were able to deal with the crisis effectively, not only in East Asia but also in Australia, New Zealand, and Eastern Europe, despite the fact that, in many cases, they were more closely connected to China in general and to Wuhan in particular.

But most Western leaders and many of their public health officials didn’t seem to care about SARS-CoV-2 until it started killing people under their jurisdiction. As late as March 7th (after more than 3,000 people had died in China and the death toll had begun to climb in Italy), French President Macron went to the theatre with his wife to encourage people to continue to go out despite the pandemic. Countless other comparably clueless statements and gestures were made by public figures and their advisors in Western countries during that period, long after we knew that human-to-human transmission was possible. And yet, in spite of this ineptitude, we’re asked to believe that, had Chinese officials told them that human-to-human transmission was possible a week earlier, things would have been totally different.

The question of moral luck

On the other hand, once Chinese officials realised that sustained human-to-human transmission was occurring, they acted far more quickly and decisively than any Western government. And they did so without the benefit of a demonstration of just how dangerous this new virus could be as it attacked another country. Not only did Western governments waste weeks despite knowing more and having more time to prepare than China, but Western public health experts even criticised the measures taken by China to suppress the epidemic. Now the same newspapers who printed those rebukes are insisting that China should have taken those measures sooner.

Even if it were entirely reasonable to blame China for failing to quarantine Wuhan earlier, the recklessness and irresponsibility of certain Western governments and media outlets precludes them from doing the blaming. Not only did most of them fail to act quickly and decisively enough to prevent disaster, but some lied at least as much as the Chinese government did. This is certainly true of the French government and of the US government. Astonishingly, people seem to be happy to focus on the shortcomings of China instead of holding their own governments to account for failing to prepare for the pandemic when the seriousness of the situation became apparent. China may be a convenient scapegoat, but the citizens of Western countries should not be falling for such obvious misdirection.

Each of the four segments is very long. For those who choose not to read part 2, the bottom line is that China gradually became aware of human to human transmission of Covid-19 between about January 10 and January 20, with public statements by Chinese officials lagging about a week behind their evolving private views of the severity of the epidemic. This is not to justify their behavior, but it’s not all that far off from how information is handled by western governments during outbreaks such as the swine flu.

BTW, the Lemoine essay came out before Bob Woodward’s revelations about Trump admitting he’d lied to the American public about the severity of the epidemic. But there were already so many other Trump Covid-19 lies out there that Woodward’s revelation makes almost no difference. It’s positively mind-boggling that any American would obsess about China not being forthcoming about Covid-19, when our own government was far worse on that score.

I was a neoliberal before it was cool (back in the 1970s)

I was a neoliberal when it was cool (1984 – 2007)

I was a neoliberal after it was no longer cool (in the 2010s)

David Beckworth directed me to a study By Kevin Grier and Robin Grier that confirms my intuition, which is that cross-sectional evidence powerful supports the neoliberal agenda (even if results often seem disappointing from a time series perspective):

Traditional policy reforms of the type embodied in the Washington Consensus have been out of academic fashion for decades. However, we are not aware of a paper that convincingly rejects the efficacy of these reforms. In this paper, we define generalized reform as a discrete, sustained jump in an index of economic freedom, whose components map well onto the points of the old consensus. We identify 49 cases of generalized reform in our dataset that spans 141 countries from 1970 to 2015. The average treatment effect associated with these reforms is positive, sizeable, and significant over 5- and 10- year windows. The result is robust to different thresholds for defining reform and different estimation methods. We argue that the policy reform baby was prematurely thrown out with the neoliberal bathwater.

Update: Commenter TBarron found another recent example.

David also directed me to a twitter thread that discusses the fact that labor’s share of income has been fairly stable over long periods, another point I’ve frequently made. (The real problem is growing wage inequality.)

PS. It’s also good to see Josh Hendrickson and Brian Albrecht carrying on the tradition of good old Chicago-style price theory. Check out their new newsletter.

We are entering an authoritarian, nationalistic, socialistic dark age, and we need to keep the flame of neoliberalism burning for when the madness passes.

PS. When I point out all the awful things Trump says and does, my commenters accuse me of peddling fake news. Now Woodward has it all on tape. What will the commenters say now?

Here’s Steve Hanke in the National Review:

President Trump has no more knowledge of monetary policy than he does of nuclear physics. Nevertheless, he has been ahead of the curve in pushing for easier monetary policy over the last few years, and the Fed has been behind the curve in implementing it. The Fed’s recent revision of its monetary-policy strategy is an indirect admission of its shortcomings. It pains the professionals to admit that an amateur has been right more often than they have. If it’s any consolation, Trump’s naïve view has coincided with the far more thoroughly considered views of the small group of “market monetarist” economists. My view of Shelton’s statements is not that she has changed her views in response to pressure from the White House, but that she has come to a greater appreciation of market monetarist-type reasoning.

So Trump should nominate David Beckworth.

I do appreciate that Steve Hanke saying nice things about market monetarists, but I hope readers don’t associate us with the monetary policy views of Donald Trump. Market monetarists believe that interest rates should be set at a level expected to lead to stable NGDP growth. Trump’s view is that the Fed should raise interest rates when Democrats are in power (even if unemployment is high) and cut them when Donald Trump is in power (even if unemployment is very low.) Those are two radically different views of monetary policy. Trump is not a market monetarist.

I have no idea what Judy Shelton believes, so I won’t comment.

Far too much weight is put on whether someone was “right” on one occasion. Perhaps this analogy would help. There are two clocks in the room, the Trump clock and the Powell clock. The Trump clock is broken, stuck at 11.37am. The Powell clock is working but runs two minutes slow. A person enters the room at exactly 11:37am and announces that the Trump clock is more accurate. There’s a sense in which that’s true, but it’s also a sense with utterly no implications going forward.

PS. As usual, my good post today is at Econlog.

HT: Sam Bell

When I complained about Trump’s shift toward a pro-zoning position, his supporters insisted that he was merely standing up for local control. I pointed out that this is nonsense; Trump only supports local control when local governments do what he wants them to do. (Just as he is only opposes cancel culture when he’s not doing the cancelling.)

It just took a few days for Trump to prove me right:

President Donald Trump won’t allow California schools to incorporate a curriculum based on the controversial New York Times 1619 Project.

Trump said Sunday that the Department of Education was investigating allegations that California was incorporating the 1619 Project into its lessons. He threatened to take away federal funding if they do.

It’s not about “local control”. The GOP is moving toward a pro-zoning position. Libertarians need to understand that fact.

PS. Completely off topic: People are having a field day mocking Southern Cal for suspending a professor for speaking a certain Chinese word to his class. The media says that the Chinese word in question sounds like the “n-word”. I’ve heard my wife say “nega” thousands of times—it’s probably the single most often used word in the entire Chinese language. I never once thought the word sounded like the n-word, for the simple reason that it doesn’t.

Just wait until the American public finds out that the Chinese word for pig (and pork) actually does sound almost exactly like the English word “Jew”!