Dr. Daniel Sutter Archives

The national debt exceeds $36 trillion with a projected $1.9 trillion to be added in 2025. Critics contend that placing entitlement programs like Social Security and Medicare off limits dooms Uncle Sam to bankruptcy. Can we contain entitlement spending?

Let’s first be precise about entitlement programs. Despite the name, the U.S. recognizes no right to welfare, healthcare, or Social Security. Entitlement refers to the spending mechanism. For entitlements, the Treasury pays all individuals who meet the program’s criteria without Congress appropriating funds. Entitlement spending can be cut by changing the eligibility criteria or payment schedule.

We have many entitlement programs with Social Security, Medicare, and Medicaid comprising the “Big 3.” In fiscal 2024, entitlements amounted to $4.1 trillion of Washington’s $6.8 trillion total spending.

An aging population will boost Social Security and Medicare spending and reduce the proportion of Americans paying taxes. By 2035 the Congressional Budget Office projects entitlement spending to increase to $6.4 trillion and the deficit to exceed discretionary spending.

This is the basis for claiming entitlements must be cut. Significant tax increases could also avert bankruptcy, but today I focus on entitlement spending.

I see reasons for hope, beginning with work requirements. Work requirements imposed on welfare in the 1990s reduced recipients 59 percent without increasing the rates of poverty or childhood poverty. The doubling of recipients in one year after President Obama dropped work requirements for food stamps also demonstrates effectiveness.

The impact of work requirements is perhaps surprising as typically only job training was required. Yet job training identified fraud. Millions of Americans who were working and collecting welfare never showed for mandatory training.

Periodic in-person visitation could substitute for work requirements for Social Security and Medicare. DOGE uncovered records suggesting millions of deceased or fraudulent Social Security recipients. We deserve assurance of the legitimacy of beneficiaries.

Medicaid is a joint Federal and state program funded primarily by Federal matching grants. States receive between $1 and $3 for every dollar they spend and pay only 10 percent of the Obamacare Medicaid expansion.

Matching grants create terrible incentives. Elected officials like to play Santa Claus with our tax dollars. State officials become even more generous when spending Washington’s dollars.

The grants enable deceitful provider taxes. States “tax” healthcare providers to raise their matching dollars and providers pass the tax on in higher Medicaid charges.

Block grants, used in the 1996 welfare reform, offer a proven solution. A block grant does not increase when states offer optional coverage. Block grants would also end provider tax chicanery.

Medicare is entirely Federal, meaning no grant savings here. Increased competition, especially for generic drugs, can control Medicare costs. I recently detailed Trump Administration efforts here and will not cover this again.

This brings us to Social Security, which critics call a Ponzi Game. More accurately, it is a cruel scam perpetrated on Americans. Pensions invest workers’ contributions to accumulate assets to pay benefits. Social Security pays benefits using current taxes.

With few retirees initially and the Baby Boom generation working, payroll taxes exceeded benefits, building up the trust fund. But the fund purchased Treasury bonds instead of stocks, and with benefits now exceeding taxes, the fund balance is projected to be gone by 2033.

Social Security offers a very poor rate of return, possibly as low as one percent. For comparison, state pension plans presume 6 to 7 percent annual returns. And the benefits are not even guaranteed as Congress can change the benefit formula.

Young families particularly suffer. Consider a married couple both age 25 earning $50,000 and looking to buy a house and start a family. Their earnings yield $6,000 in payroll tax including the employer contribution, which could pay a lot of bills. If the couple saved and invested $6,000 in an IRA, this could yield $96,000 in retirement income. Instead, $6,000 in payroll taxes might produce $9,000 in Social Security benefits.

Elected officials refer to the benefits as guaranteed often enough that I think cuts would be immoral. Politicians frequently claim their opponents plan to cut Social Security, holding our modest benefits hostage to make us reelect them. An investment-based alternative could offer four to ten times larger retirement benefits.

Containing entitlement spending will require politically difficult choices. The potential exists, however, for containment without draconian cuts.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.

Billionaires Elon Musk and Vivek Ramaswamy will lead President Trump’s Department of Government Efficiency (DOGE). Will the DOGE find the promised $2 trillion in wasteful spending to cut? Eliminating “wasteful” spending may prove harder than expected.

Federal spending is seriously out of kilter. The fiscal year 2024 deficit was $1.8 trillion despite the nation at peace and not in a recession. Such deficits will continue without change and worsen during slumps or conflicts. Our $36 trillion national debt exceeds GDP by a quarter while debt held by the public virtually equals GDP.

Lending is a voluntary market activity. Interest rates will rise sharply when investors no longer wish to lend more to Uncle Sam. We have not reached the limit to Federal borrowing, but given current deficits will hit the limit in closer to ten than fifty years. Cutting spending by $2 trillion would be an enormous step toward saving Uncle Sam from bankruptcy.

Mr. Musk and Mr. Ramaswamy have proposed significant deregulation in addition to spending cuts. I will focus here on spending and specifically the elusive nature of wasteful spending.

The late economist William Niskanen, the long-time president of the Cato Institute, once observed how in twenty-five years of working in DC he had never found an agency budget line labeled, “Waste, Fraud, and Abuse.”

This does deny wasteful spending, but the waste is not like pouring milk on the ground. Inefficient spending yields benefits less than costs, say $70 in value for every $100 spent. Identifying and cutting spending of this type will prove challenging.

Businesses can use profit and loss to guide their decisions because they sell goods and services to consumers. Mr. Musk can use losses to identify waste in his companies. Many government services either cannot be sold, what economists call public goods, or are deliberately made available for free. Public schools offer an example of the latter, since we do not charge tuition.

Comparing benefits and costs without prices is difficult. As an example, consider providing free school lunches (and breakfasts) to children from low-income households. Ensuring students eat at lunchtime facilitates learning. Children should not learn less because their family cannot afford to pay for lunch. Even fiscal conservatives like me recognize these goals are worthwhile, meaning that free school lunches provide benefits.

Economics denies the existence of free lunches, so taxpayers must pay for the lunches. Is the value of helping low-income children learn worth the cost? Economics’ benefit-cost analysis can help, but such estimates are only approximate.

Identifying wasteful spending is hard, and so is ending such programs. The beneficiaries will oppose their termination, whereas nobody supports pouring milk on the ground. Our elected representatives must bear the political fallout from cutting things like school lunches.

Surely eliminating fraudulent spending, like the estimated $200 billion in COVID relief that went to scammers, is easier, right? No one favors inappropriate payments, but they present other challenges.

Bureaucrats process applications for programs like unemployment and Social Security. If an applicant completes the requisite forms and presents the supporting documentation, the application is normally approved. Only blatantly fraudulent applications get rejected here. Fraud is generally uncovered later, as illustrated by IRS audits of tax returns.

This makes government programs vulnerable to fraud. Yet greater scrutiny of applications requires more personnel, delays approval, and rejects poorly documented legitimate claims. In choosing to get COVID relief dollars spent quickly we arguably accepted more fraud. Even fraud is difficult to prevent.

Similar for “unnecessary” bureaucrats or “frivolous” research grants. Review processes approved each position or grant application, judging that a satisfactory case had been offered. We could eliminate frivolous grants by, say, closing the National Science Foundation, but this raises the above question of benefits versus costs.

We could cut two trillion dollars from the federal budget by asking Washington to do less for us. And perhaps we should since the private sector can do many tasks more effectively than government. But eliminating wasteful government spending involves difficult judgments and considerable political will.

President Biden and Massachusetts Sen. Elizabeth Warren recently criticized “shrinkflation”. The details are secondary to the larger question of who decides how to respond to changing economic conditions, businesses, or government officials?

I will consider Sen. Warren’s comments here, as President Biden largely repeated her points. If you have never heard the term, shrinkflation refers to reducing package sizes as prices rise. Inflation’s 40-year high in 2022 brought attention to the phenomenon.

Sen. Warren accused companies of duplicitously reducing package sizes. “From Doritos to Oreos to toilet paper, giant corporations are shrinking how much they give but charging the same price or more. We are not fooled. Corporations are boosting their profits with these tricks. It’s time to crack down on shrinkflation and corporate greed.” The timing of the senator’s accusations struck some commentators as curious as inflation has fallen from 9% in 2022 to 3.1% in January. And the Biden Administration is taking credit for bringing inflation under control.

Economists refer to the market setting prices but this really refers to general forces affecting businesses. Market “Elves” do not change prices at night while store owners sleep. Consumers might feel at the mercy of stores who can seemingly set prices arbitrarily high. But all market sales are voluntary; customers can always buy something else. Businesses fully recognize this and will hesitate when raising prices.

When the price of the inputs used to produce a good rise, producers must eventually increase the price to avoid losing money. Consider a seller of prepared breakfasts when the price of eggs recently skyrocketed. Suppose that the increased price of eggs has raised costs overall by 20 percent for a 20-ounce package previously selling for $10. The price could be raised to $12, the package size reduced to 18 ounces and the price increased to $11, the package could be reduced to 16 ounces with the price kept at $10.

Which is the best option? The company’s marketing division can best answer this; they know the most about their customers’ preferences. A free market economist like me will defer with those with superior knowledge.

Economics can inform us about companies’ tradeoffs here. Many consumers are creatures of habit, but a big price increase might spur loyal customers to try an alternative. The company may never get these customers back. Reducing package size to avoid “sticker stock” could keep customers from comparison shopping.

But Sen. Warren believes she knows better even though she likely has no more detailed information about the costs and benefits of changing the size of a bag of Doritos than I do. This is no criticism of her; she is a U.S. senator and must weight dozens of important policy questions. Sen. Warren, however, would force her judgment on businesses.

Perhaps the senator has more staffers than I imagine and has assembled many of the details. A second factor, the profit motive, suggests deferring to businesses here.

Businesses have more information about their operations and the incentive to use this information to maintain their profits. Having money at stake does not guarantee correct decisions, as many businesses go bankrupt. Sen. Warren and her staffers, however, will not profit or suffer financial consequences if their package size “advice” leads to avoidable losses.

Economists emphasize information and incentives as producing good decisions in the face of scarcity, meaning the limits nature places on our ability to satisfy our wants and desires. Limited information and poor incentives are a prescription for wasteful decisions and a lower standard of living.

As economist Thomas Sowell observes, the most important economic question is who decides. Although claiming to protect consumers, Sen. Warren seeks to take decision-making control from American businesses. The senator and her staff have neither the information nor incentive to make wise packaging choices for Doritos or Oreos. Her proposal to take control over consumer packaging should be met with the laughter it deserves.

The federal government issues thousands of pages of new regulations annually (over 90,00 in the Federal Register in 2023). The costs of regulation are largely hidden but can be estimated them. A recent study from the National Association of Manufacturers puts the total at $3.1 trillion annually, over 10% of GDP.

The study was undertaken by economists Mark and Nicole Crain. The total includes both direct costs – the employees and capital used in compliance – and indirect costs – distortions of economic activity.

Measuring the direct cost is conceptually straight-forward albeit Herculean: tally all compliance costs for all federal regulations. Direct costs sum to $1.1 trillion. This does not surprise me as 10% of bank employees reportedly work in compliance.

Indirect costs, however, are far less tangible, including jobs never filled and products never made. How might we estimate this?

First, we need a measure of regulation. Crain and Crain use the International Institute of Management Development’s World Competitiveness ranking, available for numerous countries for over twenty years. They assess statistically if countries with more regulation have lower GDP, controlling for other factors. The answer is a resounding “Yes!”

The average U.S. Competitiveness Index rank is 16th. Crain and Crain use the increase in GDP possible if the U.S. score equaled the average of the five best country scores as the indirect cost. This is not the full indirect cost of regulation, rather the value of a feasible reduction in regulation. The 17% improvement needed to reach this level would increase U.S. GDP $2 trillion annually.

Is this estimate plausible? Inflation-adjusted GDP per capita grew an average of 2.7% annually between 1949 and 1973 versus 1.7% since 1974, the great growth slowdown. Many factors likely contribute here, but regulation expanded enormously prior to 1974, with establishment of the EPA, the Occupational Safety and Health Administration, and the Equal Employment Opportunity Commission.

If regulation reduced growth by half a percentage point annually since 1974, half of the slowdown, lost GDP would around $7 trillion annually. Crain and Crain’s estimate seems reasonable.

Regulation’s costs fall partly on businesses and partly on others, like workers and consumers. Crain and Crain apportion 56% of the costs as falling on business. Manufacturing bears the highest costs. Cost per employee offers a good measure of regulatory burden and amounts to $29,000 per employee, or 40% of payroll costs (total employee compensation).

Small businesses face the heaviest regulatory burden. Manufacturers’ cost per employee rises from $25,000 for firms with more than 100 employees to $28,000 for firms with 50 to 100 employees and finally $50,000 for firms with fewer than 50 employees.

American manufacturing is not dead, it just does not employ as many people as in the past. Regulation may be reducing American manufacturing. Regulation essentially involves hiring a second non-working employee for every worker, especially for small startup manufacturers.

States like Alabama dole out billions in tax breaks to businesses, often manufacturers. The burden of regulation explains perhaps why such tax breaks are needed.

Bureaucrats author Federal regulations under the authority of laws passed by Congress. Regulatory agencies have some political accountability as the president appoints top bureaucrats and Congress approves budgets and can override specific regulations. But oversight is limited, meaning that regulations do not receive Americans’ full consent and approval.

The report does not measure benefits and offers no assessment on whether regulation improves life. Environmental regulations enormously reduced pollution and benefited America. But many regulations could not pass a legitimate benefit-cost test.

The Supreme Court is pushing back on the regulatory state. Under the “major questions” doctrine, the Court has rejected attempts to find significant new regulatory authority in old laws. And the Court may be about to overturn the Chevron doctrine of judicial deference to administrative agencies.

Regulations frequently must fill in the details of laws. The costs of Washington’s regulations are significant and not listed in the federal budget. Fortunately, economists can estimate and highlight these significant costs.

Dr. Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.

The rhetoric is certainly ramping up approaching the presidential election. Many Americans think poorly of their fellow citizens on the opposite side of the political spectrum. A recent Heartland Institute and Rasmussen Reports poll provides more evidence, with the headline, “One-in-Five Democrats Want Donald Trump to be Permanently Imprisoned, Exiled, or Executed if Convicted over Election Fraud Claims.”

But there’s more. Almost four out of five Democrats think Trump should be banned from running for public office if found guilty. Almost half of Democrats want media members who alleged vote fraud to be “’banned from public speaking,’ receive prison time, or a combination of both.”

The attitude toward the media is shocking. Presidential pronouncements are inherently newsworthy. Today, many people favor silencing dissenting voices, presumably to suppress political opposition.

Public figures should, I believe, think long and hard before calling their fellow Americans stupid or evil. Can anybody truly accept those they regard as evil and stupid as equals as citizens? Or agree to be governed by evil idiots?

Painting Trump as an existential threat to democracy diminishes confidence in elections. If the ends justify the means in stopping Trump, do not be surprised when conservatives believe liberals stuffed ballot boxes to accomplish this. A coordinated effort to influence voting occurred in 2020, as Molly Ball documented for Time. Proponents described this as “fortifying” the election, but others could view it as rigging.

Perhaps this vitriol could be dismissed as cheap trash talk. Athletes and children on the playground use words with homicidal intent, saying things like they will “kill” the opposition. The admonitions of MSNBC hosts and guests may similarly be figurative. Today’s partisan news media rewards extreme words. Unserious rhetoric, however, could still be taken seriously by the audience.

Unprecedented actions also accompany the rhetoric. Two states have removed Donald Trump from the primary ballot, and he faces multiple criminal indictments. One can only wonder if the political left envisions disfranchising half of America.

Economists would say that half of the country accepting exclusion from elections is not an equilibrium. By this we mean that some people are not doing what is in their best interest given the actions of others. Red America will respond in some way to being forbidden to elect another president.

The rhetoric toward Trump may not foretell a dark future because liberals view him as uniquely despicable and intolerable. Liberals may suffer from Trump Derangement Syndrome, not an authoritarian will to power. I am not confident, however, that Donald Trump’s exit from politics will produce détente. Some Democrats seek to bar some House Republicans from standing for election.

Policy and not just personality I believe drives Trump Derangement Syndrome. And specifically, his populism, by which I mean rejection of rule by an elite. Laughter and derision sometimes make a point more effectively than big words, and I think elites realize the lethality of Trump’s insults to their project. Agreeing to be ruled by people like Elizabeth Warren is laughable, and Trump makes people understand the joke.

Other evidence points to populism as the issue. Reporting by Michael Shellenberger and Matt Taibbi links the emergence of the tangled web of government, business, foundations, and university centers they call the “Censorship Industrial Complex” to populism. Brexit and Trump’s election threatened rule by the educated, credentialed, managerial elite.

Things may not be as bleak as they appear though. Partisans often portray every election as existential to boost fundraising and turnout. Many polls find less division than hosts on MSNBC and Fox News would suggest.

But words matter. Future political operatives will have during their impressionable teen years had the presidential nominee of their party claim that an election was stolen from them. This will worsen partisan hostility. A country where citizens hate and detest each other seems destined to descend into political conflict and be unable to protect its interests against foreign foes.

America does not have remain one country. A national divorce or peaceful separation is possible and seems to me infinitely preferable to descent into civil war. Those who believe hateful things about the other party should be preparing for an end America’s political union.

Everybody makes mistakes, but government accountants seem particularly error prone. With 70 million Americans receiving Social Security payments annually, mistakes are inevitable. But the Social Security Administration aggressively pursues repayment years or even decades later as detailed in Social Security Horror Stories by Lawrence Kotlikoff and Terry Savage.

The repayment efforts can cause immense hardship. Cases cited by the book include: a widow asked to repay $300,000; a five-year-old sued months after his mother died; and denying a veteran’s indigency claim based on too many cable television channels.

People can hardly dispute decades old claims. This is no way to prevent Social Security’s looming insolvency.

Government should not pay money to ineligible recipients. Fraudsters should be prosecuted and made to pay restitution. But the Horror Stories involve mistaken payments, not fraud. These payments should be recovered if recognized quickly but not years later. The authors’ proposed fix, a one-year statute of limitations for erroneous payments, seems proper.

Recovering Social Security overpayments, like cutting waste, fraud, and abuse, offer illusory “solutions” to government over spending. Neither cracking down on welfare cheats nor recovering overpayments will prevent insolvency. The mirage of an easy solution diverts political energy from hard decisions.

And Social Security’s current trajectory is bleak. Benefits now exceed payroll tax collections and will deplete the accumulated Trust Fund in about a decade. At that point, either benefits must be cut, the payroll tax increased, or Congress will have to cover the deficit.

Fiscal conservatives accuse Republican presidential candidates foreswearing Social Security cuts of denying reality. Yet economist Steve Moore of the Committee to Unleash Prosperity strongly warns Republicans against benefit cuts. Mr. Moore is a staunch fiscal conservative, so his argument here is worth considering.

One part is that benefit cuts essentially confiscate Americans’ hard-earned savings. Social Security is best understood as forced retirement saving. This might appear like an unacceptable violation of personal freedom, but Americans may recognize that they will not save enough for retirement and consent to forced saving.

Social Security could also avoid a Samaritan’s Dilemma. In the Bible, a good Samaritan showed kindness by assisting a stranger set upon by bandits. But such assistance lowers the cost of traveling through bandit territory and can be counted on as more people take the moral lesson to heart. Good Samaritans might find their generosity being taken advantage of.

If people know they will receive an old-age pension, they have even less reason to save. Controlling Samaritan’s Dilemmas can be difficult, particularly if we will not tolerate impoverished, homeless elderly potentially freezing. Forcing saving may offer an improvement.

Although run as a pay-as-you-go transfer program, Americans embrace Social Security as equivalent to savings. Consequently, promised benefits are viewed as earned even if the benefit schedule can legally be changed. Americans recognize that benefit cuts amount to robbery even if fiscal conservatives do not.

The second element of Mr. Moore’s argument involves offering desirable alternatives. Social Security’s pay-as-you-go structure offers Americans an abysmal rate of return. Mr. Moore argues that a true pension alternative could provide at least double the current benefits.

The timing of contributions worsens the deal. The payroll tax negatively impacts young families. A young couple with children making $50,000 annually pays $6,000. This money could really help pay bills. Thanks to compound interest, every dollar the couple saved in a 401k at age 30 could be $10 by retirement. Social Security stresses young workers’ finances without compensating generous returns.

Reform should focus on a superior alternative. The potential for significantly higher returns could make Americans, even those relatively close to retirement, voluntarily leave Social Security. The loss of contributions by younger workers will worsen Social Security’s near-term deficit but alleviate the projected future disaster.

Social Security may currently be unsustainable, but recovering overpayments decades later is neither a solution nor just. Slashing benefits or significantly hiking taxes offer solutions. But giving Americans a better option is more promising.

Is the economy booming?

Economist Alan Blinder recently argued that the economy is strong despite many Americans’ claims to be struggling.

Paul Krugman believes that claims of malaise reflect Republican hostility to President Biden, not reality. Do the numbers validate the lived experience of struggling Americans?

Statistics, at best, reflect averages across the economy. Life was not bad for my grandmother during the Great Depression as my grandfather was a captain in the Dearborn Fire Department and never lost his job. Businesses can fail as the economy booms.

Surveys reflect many Americans’ struggles. Lending Tree found 64% of respondents living paycheck to paycheck. Another survey reported 70% of respondents being worse off now than at the start of Biden’s term. The 60-day delinquency rate on auto loans is at an all-time high and the 90-day credit card delinquency rate is up 50%. But are these families just living beyond their means?

Polls also find that many more Republicans than Democrats believe the economy is struggling. Perhaps Republicans believe the economy is bad because Fox News says so. I believe in an objective reality, so let’s look.

Some statistics signal strength. Although up slightly, unemployment remains below 4% nationally, a historically low rate. Inflation has fallen from 9% in 2022 to 3.2%. And real (meaning inflation-adjusted) GDP is holding steady. We may tame inflation without a recession.

But not all statistics are rosy. Low unemployment reflects in part a decline in the percentage of adults looking for work. Inflation remains above the Federal Reserve’s 2% target. Interest rates are up sharply; the 30-year fixed mortgage rate is 7.7% versus 3% when President Biden took office. Higher interest rates make homes and cars more expensive.

Wages have risen but not enough to keep up with inflation. Real income began falling in early 2021 after nine years of growth and fell over 2% in 2022 after growing nearly 3% in 2018 and 2019.

Some stats suggest that some Americans are struggling even more. Food and energy prices have increased 20 and 35% since January 2021, versus 17% for the overall Consumer Price Index. Lower income households spend a higher percentage of income on these items, so their effective inflation rate exceeds the national rate.

Analysis by the St. Louis Fed finds that about a quarter of households experienced no increase (or even decreases) in their nominal wages in 2022. These individuals suffered a substantial decline in real income, even before adjusting for effective inflation due to energy and food prices.

The past two years have seemingly continued the divergence of the COVID lockdowns. “Zoom Class” professionals never lost their jobs and saved commuting time working from home. Service industry workers either lost their jobs or suffered the risks and inconveniences.

The Biden Administration claims credit for recovery from the COVID recession, but we did not experience a typical recession. A strong economy was shut down in March 2020, like a resort community during the offseason. Reopening was all we needed for recovery. $5 trillion in federal COVID spending and its monetization by the Federal Reserve drove the inflation requiring today’s painful high interest rates.

Traditional economic statistics may now less accurately reflect “typical” conditions. Consider real per capita GDP and real median personal income. Real GDP per capita is economists’ preferred measure of prosperity, as the good things in life correlate strongly with GDP. Across time and countries, differences in real GDP per capita yield noticeable differences in living standards.

In 1974, median income was 95% of per capita GDP. Median income increased 50% by 2022, a definite improvement, but GDP per capita simultaneously increased 130%. A 14% decline in average household size explains some, but not all, of this divergence. At least recently in the U.S., GDP correlates less with average living standards.

The American economy is not broken. Averages always conceal considerable variation. Statistics, however, suggest that the economic pain many Americans feel is real and not just perceived.

The freedoms to speak and criticize public officials are crucial to ensuring that government serves the people. But must this include the freedom to propound evil, hateful beliefs? Free speech has always faced criticism but has recently come under considerable scholarly attack.

Let’s consider difficult cases for free speech absolutism, starting with the Nazis. Nazi antisemitism did not materialize out of thin air; numerous learned voices articulated antisemitism for decades. These writings shaped Hitler’s views and prepared the ground for his hate, contributing to the Holocaust.

Another example is the Human Extinction Movement, the belief that humanity should exterminate itself for the good of the Earth. Some advocates add “voluntary” to its title, but nonetheless believe that humans should not exist.

Must a commitment to free speech and free dialogue embrace such views? John Stuart Mill offered a classic defense of free speech, free dialogue, and a marketplace of ideas in On Liberty. We can distinguish three arguments for free speech.

First, discovering truth requires freedom of speech and expression in both public and scholarly discourse. Identifying truth requires the freedom to challenge current beliefs and theories, as challenges identify errors and inconsistencies. Validating knowledge necessarily has a social element; we know that two plus two equals four because no one has demonstrated otherwise.

Second, suppressing ideas is often ineffective. People infer that a speaker ignoring his critics cannot answer them, or that only truthful ideas are dangerous enough to be suppressed. Ideas can never be completely erased.

Finally, governments will censor to benefit themselves. Criticism is crucial in making governments serve the people. Even if suppressing certain ideas at certain times could improve public discourse, censorial powers will not be used for this. This potential for misuse is sometimes called a public choice problem.

Suppressing arguments also disrespects our fellow citizens. Consider criminalizing Holocaust denial. Those who believe that the Holocaust cannot be reasonably denied have examined the evidence and reached their own conclusion. Criminalizing Holocaust denial prevents other citizens from hearing – and evaluating – this argument themselves.

Let’s apply these arguments to human extinction. Further debate and discussion are unnecessary to establish truth. My standard of value is human life; human extinction seeks to destroy the source of value. I cannot imagine any argument or evidence overturning this conclusion.

Might suppression further spread this view? Perhaps, but I suspect that very few people will find the self-hating idea of eliminating humanity attractive. But considerable space exists between total suppression and full tolerance. We can let people post evil manifestos on the internet without legitimating and promoting their views with university professorships.

Finally, can we not instruct government to only censor the human extinction movement and not political opponents? This seems simple when we can point out the individuals and arguments to suppress. Yet Racketeer Influenced, Corrupt Organization (RICO) laws introduced to fight organized crime are being used against the Trump campaign.

How does this happen? A law (or constitutional amendment) must detail what government can do and to whom. A list of individuals, views, and organizations to silence could easily be evaded. Human extinction could relabel itself and new organizations replace the banned ones.

Alternatively, we could try to define who can be censored. Our definition might inadvertently include people we do not want censored or be stretched by judges looking to silence opponents. A government official empowered to declare a rebranded group part of the human extinction movement could lump MAGA Republicans as well.

The public choice problem is never easily resolved!

Eventually we must consider costs and benefits. John Milton wrote that “truth was never put to the worse in a free and open encounter” with falsehood. This suggests small benefits from suppressing ideas we are 100 percent sure are false and evil. The cost of a government silencing its opponents is enormous. Even if some ideas might usefully be suppressed, the consequences of misuse of censorship are too enormous to risk.

The U.S. Department of Justice (DOJ) antitrust case against Google over its dominance of online search is unfolding. This marks the first tech industry antitrust trial since Microsoft a quarter century ago. Does Google unfairly dominate online search?

With a market share of between 86% and 96%, Google is certainly dominant. Microsoft’s Bing is a distant second between 3% and 9%. But Google does not meet the economics definition of monopoly, which requires a single seller. This is significant because some economic models yield vigorous competition with just two sellers in a market.

Economics judges market performance against the consumer satisfaction standard, so market share alone never condemns a company. A 90% share because consumers judge Google’s product as the best is not a problem. That we now say “Google It” suggests considerable consumer satisfaction.

Some criticisms of Google exist and suggest that it may not serve customers that well. For instance, companies pay to be at the top of the search results or divine from Google’s algorithm how to be selected first. Conservatives allege a political bias.

Economists instead focus on barriers to competition, although disagreement exists over what exactly constitutes problematic barriers. Superior performance based on experience is a contentious barrier. Google’s search engine became so good because so many people used it, setting a high bar for rivals. I do not consider this a barrier because other companies’ search engines should be capable of similar learning.

Barriers created by a dominant firm are problematic. The DOJ’s case consequently focuses heavily on Google’s $10 billion a year deal with Apple to be the default search engine on the Safari browser. The DOJ contends that this reduces competition by thwarting rivals like Bing or Yahoo and possibly preventing Apple from developing its own search engine.

The ease of changing the search default is a major weakness of the DOJ’s argument. Bing is the default on many devices, but users switch to Google. As economist Thomas Hazlett argues, there’s good evidence that many folks just like Google.

Research demonstrates the importance of default settings even when switching costs are low, boosting the DOJ case. For instance, many people never reallocate funds in their 401k. The persistence of default settings, however, is a general aspect of life. And remember that Bing is often the default.

Let’s also consider Apple’s choice to make Google their default. Choosing not to satisfy customers on any element of design, quality, or cost opens the door for competitors. Apple most likely believes users prefer Google. Samsung decided to stay with Google over Bing earlier this year.

Google’s dominance has not prevented entry into the market. DuckDuckGo was founded in 2008, long after Google was dominant. DuckDuckGo has attracted significant funding and differentiates itself by prioritizing privacy.

The Google litigation is part of the Biden Administration’s aggressive antitrust policy. FTC chair Lina Khan embodies this activism. Unfortunately, aggressive antitrust enforcers have not performed well.

My favorite antitrust folly was the FTC blocking a merger between Blockbuster and Hollywood Video in 2005 it feared would dominate the home video market. The FTC missed that the transition to streaming would bankrupt both companies within six years. In fairness, Blockbuster also missed on streaming, choosing not to buy Netflix in 2000. But bureaucrats’ lack of vision gets coercively imposed on markets.

Professor Hazlett offers a great example. The Federal Communications Commission blocked cell phone development for four decades! The technology emerged after World War II but the FCC failed to see the value and make any electromagnetic spectrum available until 1970. Cell phones only emerged after 1982.

Politics also plagues antitrust policy. Campaign contributions ensure favorable treatment for politically connected firms. Laissez faire may not be the best imaginable policy, but it almost certainly outperforms political antitrust.

America Online, Netscape, and MySpace were all once giants. Consumers ultimately prevail in free markets. A company maintaining a large market share in the face of competition must serve customers better than government-directed competition.

Brexit and Donald Trump’s election highlighted a global surge in populism. The Economic Freedom of North America Network, of which the Johnson Center is a member, has discussed conservative populists’ growing hostility to markets. Populists should, I hope, embrace free markets and limited government.

We first need a definition of populism. Prior to 2016, left-wing groups opposed to the corporate world order were populists. Political scientists focus on hostility toward elites, which I will accept. New research in the 2023 Economic Freedom of the World report finds that populism, identified via a new measure based on this definition, correlates with lower economic freedom internationally.

Free market economists have long opposed elites and experts. Thomas Sowell titled a book on elitist intellectuals “The Vision of the Anointed.” Austrian economics argued that socialism would not work because experts could not know enough to run an economy well. Even Adam Smith railed against paternalistic elites.

Tucker Carlson has been described as the voice of contemporary American populism. I would offer that a CliffsNotes version of his “Ship of Fools” is that America’s stupid elites never face consequences for their disastrous decisions.

Free markets are inherently populist: they involve decentralized decision-making and direction of economic activity by millions of consumers. In markets people make choices for themselves and people get the things they purchase. Permission is not needed from anyone, including elites, for businesses to provide people what they want.

The rich get more “votes” in markets, creating an impression that markets favor a wealthy elite. But of greater importance, our votes count regardless of whether we are in the majority and businesses can make lots of money serving average folks; Walmart made the Walton family billionaires. The cultural elite do not favor country music, NASCAR, or Walmart, yet these persist and make money.

Markets have always faced criticism but today face an assault from multiple directions with the main antagonism no longer economic class. Environmentalists, for example, want to create a sustainable economy within planetary boundaries. Critical race theory sees capitalism as an element of systemic racism to be deconstructed. And socialists still dream.

Thomas Sowell warns against intellectuals trying to impose their vision of Utopia on us. Elitist intellectuals must reorganize our economy to create levers of control before exercising control. The various attacks on markets come from different elites seeking to restructure the economy to enable control.

Partnerships with major corporations are seemingly the preferred means of restructuring today. The World Economic Forum and the United Nations Global Compact extol public-private partnerships. Restructuring may occur through environmental, social, and governance control over finance, a central bank digital currency, or new powers claimed under a climate emergency.

Proponents of partnerships claim to care about all stakeholders across the globe. But in a nation of 330 million or planet of 8 billion people, only a very limited elite will participate in decisions. American consumers never voted for Ralph Nader to represent them, and those speaking on your behalf will not listen much to you.

Populists rejecting elite control should favor economic freedom and decentralized markets.

What about specific elements of populist hostility to markets? Populists fear that the global economy primarily benefits elites. Economic nationalism seeks to retain national sovereignty, which I strongly support; the American experiment with freedom and self-government could never have occurred on a global scale.

Proponents of economic freedom should engage populists, for two reasons. First, our criticism may push populists to support worse economic policies. For example, many economic nationalists support government-directed investments. But the limits of expertise imply that a new industrial policy is likely to fail.

Second, policy success in a large democratic nation requires broad support and compromise. Economic freedom purists will never sustain good policies alone. A coalition for economic freedom is far more likely to include populists than democratic socialists.

Restructuring markets to enable elite control will massively degrade economic freedom. Markets let the voices (dollars actually) of all Americans be heard. Markets are inherently populist, so I hope populists will be a force for economic freedom.

Whales have been dying off the East Coast of the United States near where offshore wind turbines are being or about to be built. The North Atlantic Right Whale faces extinction, with only perhaps 340 left in the wild. Should endangered species take precedence over energy production?

NOAA’s National Marine Fisheries Service denies a link between whale deaths and wind turbines. A recent investigation by the independent news organization Public, however, identifies correlation between whale deaths and boat traffic and sonar activity associated with construction.

Whale deaths have increased sharply since 2017, about when turbine construction began. This constitutes correlation, but correlation does not prove causality. Sonar and construction may be pushing whales into high traffic boat lanes, producing more collisions with boats. NOAA acknowledges trauma from boats in many whale deaths.

Marine biology is not economics, so I will not take a definitive position on the causation question. For full disclosure, I have previously received funding from NOAA for my research so I may have a bias here. I believe that additional research is warranted.

I instead wish to consider whether whales should trump energy development. We might think that 1973’s Endangered Species Act (ESA) settled this question and should protect the Right Whales. The ESA seemingly unambiguously prohibits the taking of endangered and threatened species. But this protection is not ironclad. The federal government must declare critical habitat for a species and decide whether actions disturb habitat. Consequently, species protection depends on bureaucrats.

Construction projects sometimes proceed with modifications. The NMFS has set sound limits for sonar which Public’s reporting contends are being violated.

Damage to the environment or harm to species is almost always a by-product of productive activity (including hunting as food production). We live in a world of scarcity, meaning that we want more goods and services than can be produced. Market prices for scarce resources make it costly to burn a rain forest or kill whales just for fun.

Habitat loss is the major threat for many endangered species. People use land for agriculture, logging, or to build beach resorts, depriving species of breeding or hunting grounds. These impacts are unintended and sometimes initially unrecognized.

Let’s focus now on offshore wind and Right Whales. I hold human flourishing as my standard of value. Consequently, I believe the ESA is misguided. Humans may impact nature to survive and thrive; if this happens to drive species to extinction, that is acceptable.

We can and do choose to impose on ourselves to improve the lives of animals, but these choices should entirely reflect our preferences. There may be little consistency in our choices of plants and animals to protect. The bald eagle somehow became a national symbol and Americans chose to protect this species. What we label animal rights are ultimately human sensibilities.

I would not put whales ahead of energy. But human survival and thriving does not require offshore wind; climate change does not pose an existential threat. If you doubt this, read the IPCC reports summarizing the academic literature. Humanity could adapt to an additional two degrees Celsius warming. Humans at the subsistence level survived much greater climate changes during and after the last glacial period.

Given that fossil fuels do not threaten extinction, I agree with Alex Epstein that we should ensure human flourishing in the manner least disruptive to the environment.

Wind and solar have enormous environmental footprints. Both require enormous land areas, kill thousands of birds and bats annually, use gigantic quantities of rater earth metals, and result in huge quantities of toxic waste.

The key to meeting the energy needs for human flourishing with minimal environmental disruption is energy density, as Mr. Epstein argues. Wind and solar are very low density compared to fossil fuels, with nuclear power even better. The energy transition is largely a plan to enrich opportunistic profiteers driven by fear of a climate apocalypse. We should not kill whales merely to enrich politically connected “clean” energy companies when lower cost and lower impact energy sources can support human flourishing.

High gas prices over the past three years have contributed to record oil company profits. Yet domestic oil production has not surged in response. The Biden Administration blames corporate greed while critics blame Biden’s anti-energy agenda.

Recent research suggests another possibility, our very own oil cartel.

Gas prices stand about 60 percent higher than January 2021 although down from summer 2022. Administration officials have noted weak industry interest in Federal leases and Exxon and Chevron have recently canceled projects. Domestic production only recently (virtually) reached its pre-COVID November 2019 peak.

A cartel might have emerged through horizontal stock ownership by institutional investors through vehicles like mutual funds and index funds. Many investors seek diversified, passively managed stock funds which mirror the S&P 500 or other stock indexes and avoid high fees. The success of such funds has led to institutional investors owning perhaps 80 to 90 percent of major corporations. The “Big Three” asset managers – BlackRock, Vanguard, and State Street – own about a quarter of the stock of many large companies.

Consequently, asset managers own large chunks of competing firms with significant implications for economic theories of competition. Economists assume that independently owned firms maximize their own profits. Aggressive competition – cutting prices, offering better service – takes customers, and consequently profits, away from competitors. Free market economists think competition can be very vigorous even with a small number of competitors.

Common horizontal ownership changes this dynamic. If the owners of Delta also own American, fare-cutting takes revenue from themselves. Horizontal ownership makes collusion to restrain competition more likely. But even without collusion, the incentive to compete is diminished.

The Biden Administration’s war on fossil fuels could also be inhibiting domestic oil production. But climate change may be camouflage. BlackRock CEO Larry Fink may claim to be saving the planet while really leading a domestic OPEC.

Horizontal ownership raises clear antitrust concerns. To date, institutional investors’ horizontal ownership has flown under the radar.

But recent research by Professor Jose Azar and coauthors has documented an anticompetitive impact of horizontal ownership. Making a convincing case that horizontal ownership instead of other factors drives any observed price differences requires careful analysis. One of Professor Azar’s studies examined airlines, where fares on each route, say Atlanta to Chicago, can be analyzed separately. Economists use the Herfindahl-Hirschman Index (HHI) to measure effective competition in a market. Azar and colleagues use a modified HHI (MHHI) which decreases effective competition when a small number of competitors also have common ownership.

Differences in fares across routes depended more on the MHHI than the traditional HHI, even when controlling for other factors. In addition, mergers among financial institutions increasing the MHHI but not the HHI increased prices. Finally, routes where fares and the MHHI increased typically experience fewer travelers, helping rule out increases in demand for flights as driving higher fares.

Overall Azar and colleagues find that horizontal ownership results in fares being 3 to 7% higher. An examination of banking also found horizontal ownership to increase fees. These relatively recent results are not the final word but raise red flags.

Horizontal stock ownership can also explain other market behaviors. As Harvard’s Einer Elhauge observes, CEO bonuses are often based on industry performance and not their firm’s performance. This reward structure only makes sense with horizontal ownership of leading firms in an industry.

Could antitrust help address horizontal ownership? As a principle, I am skeptical of antitrust as markets can humble even the largest companies if they fail to serve customers. Professor Elhauge suggests limiting stock funds seeking diversification to investing in only one company in an industry; BlackRock need not own Delta, American, and United.

The possible transformation of Americans’ desire to avoid stockbroker fees into a mechanism for collusion illustrates the fears of many that smart business insiders can take advantage of them. While this fear is real, complicated regulations truly empower the greedy. Deregulation and competition surprisingly offer the best hope to align greed with consumers’ interests.

We continually hear that climate change is making extreme weather – from wildfires in Canada and Maui to Hurricane Hilary – worse. Unfortunately, this allows politicians to evade responsibility for their inaction and mistakes.

Researchers have long emphasized that nature’s action and human exposure together produce disasters. A hurricane striking an uninhabited island is not a societal disaster. Many natural hazards have high risk areas, and people create exposure when choosing to live or work in these places. This is not bad: the Florida Keys are beautiful, and many industries must be in vulnerable places. The extra costs of extreme weather are worth bearing if the value from living or working there is commensurately greater.

Our actions once we locate in vulnerable areas impacts vulnerability, particularly the quality of construction. We can build homes and businesses resistant to winds, floods, and even tornadoes. Not every engineering design will be cost effective, but we can build stronger.

Government typically takes actions offering community-wide protection. Levees and management of public forests are examples. The National Weather Service provides weather forecasts and warnings.

Many voices attribute all extreme weather to climate change. One Hawaii state senator stated of the Maui fires, “And I just think this is the new normal not just for the state of Hawaii but for the whole planet, for the whole country.” Apocalyptic talk disregards climate change’s expected impact on severe weather. A warmer future should make hurricanes modestly stronger with more precipitation; extreme weather will become somewhat more extreme.

A small increase in the strength of extreme weather, however, can sometimes have large societal impacts. Nobel Prize winner William Nordhaus estimates that hurricane damage is proportional to the eighth power of landfall windspeed. The projected 9% increase in windspeed would double annual damage.

This is significant, not apocalyptic, and in line with how our actions affect hurricane damage. Employing all wind resistant construction techniques may reduce hurricane damage by half. Strengthened construction might offset global warming’s impact on hurricanes.

Let’s consider now the Maui fires. Many voices blame the dry conditions on climate change. But most of Maui was in seasonal, not exceptional, drought. A wet spring produced lots of plant growth – fuel for the fire season. Combustible invasive grasses have overgrown former sugar plantations. Hurricane Dora passing near the Hawaiian Islands contributed to the strong winds at the time.

Power lines appear to have sparked some fires. Clearing brush (or trees) near power lines and replacing aging lines can avoid such fires but combatting climate change has impacted fire prevention. Electric utilities trying to meet Hawaii’s 100% renewable power mandate have reportedly reduced maintenance and brush clearing to offset expensive wind and solar.

Climate change offers politicians evade responsibility for such actions.

Mismanagement of forests in California and Canada has contributed to fires. Neglect of
levees left New Orleans vulnerable to Katrina. Poor decisions made the Maui fires more dangerous.

Political decisions producing unnecessary vulnerability to extreme weather should not surprise. Politicians want to deliver new things to voters. People already expect existing levees to protect them. The rarity of disasters means the next one may occur after today’s office holders have retired. And if disaster happens, call it an act of God. Today climate change replaces God.

Reducing fossil fuel use offers little protection against extreme weather. Projections attribute 7 and 23% of global emissions through 2100 to the U.S.

Let’s say the U.S. is responsible for 10% of emissions that might produce another 2 degrees Celsius warming by 2100. The U.S. will be responsible for 0.2 degrees of warming, with Hawaii responsible for a tiny fraction of this. Zeroing out Hawaii’s carbon emissions would have no measurable impact on extreme weather.

Opportunists use climate change to push restructuring our economy and society. We can protect ourselves from extreme weather; Alex Epstein shows that extreme weather deaths per capita worldwide have fallen 98 percent. We should prudently protect against fires, floods, and hurricanes because they will occur regardless of warming. And we should hold politicians failing in this task accountable at the ballot box.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H.
Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.

Recent news stories detail incidents of squatting, or illegal occupation of a home. These rights violations plausibly reflect public discourse demonizing landlords, promoting rent control, and even proposing the abolition of rent.

I have no statistics on squatting and so will not call this a crisis. The rights violations are problematic regardless of the proportion of properties impacted. The prevalence of news stories suggests that squatting is frequent enough to be on editors’ radar.

Numerous factors lead to squatting. Sometimes tenants stay after a lease expires or they stop paying rent. Some people break into unoccupied houses. The most problematic cases arise when the squatter claims to have a lease; sometimes the squatter has been swindled by someone posing as the listing agent.

Conflicting legal claims typically result in the police waiting for a court order to evict the squatter. Legal resolution can take six to twelve months. Squatters also sometimes do considerable damage to a home.

For homeowners, squatting can be financially ruinous. Sometimes homeowners returning from vacation find trespassers living in their homes. Often squatters take a vacant home. Homeowners who move for a new job may rent if they cannot immediately sell the home.

Illegal squatting deprives the owner of the rental income while the mortgage and property taxes must still be paid. Property owners must pay for any damage the squatters cause and incur legal bills to secure eviction. Plus, they experience stress and anguish.

Squatting, I think, reflects a deterioration of respect for property rights driven by government policy. The CDC imposed a nationwide eviction moratorium before being stopped by the Supreme Court. Dozens of cities have passed new rent control ordinances.

The “Cancel the Rent” movement seeks to abolish rent entirely. When told that housing is a human right, people may feel justified living in someone else’s house.

Squatting illustrates how people devise ways to benefit themselves within the legal rules. Suppose you know the following. The police will not evict squatters given uncertainty over lawful possession. Lease disputes go to courts with long delays. And squatting generally is a civil matter with little danger of criminal prosecution upon eviction.

Here is a profitable strategy: Manufacture a bogus lease to live rent free for months (or years). We will hope in vain for people to not take advantage of others like this.

Fortunately, fixing this problem is straight-forward. As George Washington University’s Jonathan Turley observes, we quickly determine ownership of automobiles based on registration and identification. The police “would not allow the person to drive off and tell the owner to work it out in court.”

As Professor Turley notes, the authorities simply need to act promptly to identify
bogus leases. While squatting may not be a criminal offense, trespass, forgery, and
fraud are crimes. District attorneys who ignore property crimes encourage squatting.
A failure to control squatting will prove highly costly. Many houses for sale or rent
are vacant and vulnerable to illegal occupation. Losses from squatting will reduce
market value, which in turn will reduce building. Squatting poses a similar threat to the
market as rent control.

I suspect most communities will control squatting. Many news stories are from states such as Florida, Maryland, and Texas where property taxes largely fund local governments.

Widespread squatting would degrade property values and reduce property tax revenue. Before police or district attorneys get laid off, I suspect they will start evicting squatters.

Economic ignorance may contribute to this policy negligence. Some progressives believe that rental housing contributes to unaffordability; if not allowed to rent, owners would accept lower sales prices. But the freedom to rent makes people willing to pay more for homes, increasing home building. Government limits on construction largely drive housing unaffordability.

The victims of squatting are law-abiding citizens. The protection of property rights is a fundamental task of government. Failure to control squatting reflects a moral failure of government, one imposing extreme financial and emotional tolls on the victims.

The U.S. House Select Subcommittee on the Coronavirus Pandemic will hold a hearing Tuesday on “Investigating the Proximal Origin of a Cover Up.” The recent Federal District Court injunction against government censorship of social media increases this hearing’s significance.

The hearing will not decide if a leak from the Wuhan Institute of Virology (WIV) started the SARS-CoV-2 pandemic. The hearing will examine the backstory of the March 2020 Nature Medicine paper, “The Proximal Origin of SARS-CoV-2.” In this paper, five leading virologists concluded, “we do not believe that any type of laboratory-based scenario is plausible.”

“Proximal Origin” was one of the most cited scientific papers of 2020. Dr. Anthony Fauci and many others dismissed the lab leak hypothesis for almost two years by referencing this paper.

One potential response could be that real time prognostication is frequently wrong. Law professor Richard Epstein in March 2020 predicted no more than 50,000 deaths worldwide from SARS-CoV-2, which was off by two orders of magnitude.

But thanks to numerous Freedom of Information requests, we know that three “Proximal Origin” authors thought that the lab leak was a 50-50 proposition or better.

The WIV was collecting coronaviruses from bats across China to identify potentially deadly viruses before they might begin infecting humans. This research necessarily made a leak a possibility, made more likely since much of WIV’s coronavirus research was being done in a Level 2 Biosecurity lab rather than a Level 4 area.

But it gets worse. The authors were aware of a furin cleavage site in the SARS-CoV-2 spike protein, never previously observed in any coronavirus. This was the key to infection: “without this feature, SARS-CoV-2 would not have posed a pandemic threat.”

WIV and EcoHealth Alliance had sought funding from DARPA to insert a furin cleavage site into a coronavirus. This proposal was not funded but the research might still have been conducted, making a lab leak a leading candidate when such a coronavirus emerged in Wuhan.

Four of the five authors of Proximal Origins were on a phone call on Feb. 1, 2020, with Dr. Fauci, National Institutes of Health Director Francis Collins, and Wellcome Trust’s Jeremy Farrar. Somehow none of their concerns made it into the paper. As Roger Pielke Jr. summarizes the case: “a group of scientists, ‘prompted’ by government officials and ‘shepherded’ by Farrar … chose to misrepresent in a ‘scientific’ article published in a major journal what they knew and believed, as expressed in private emails.”

The case sheds light on government censorship of social media. The expert assessment justified deplatforming lab leak proponents from Twitter and Facebook. Censorship of the Hunter Biden laptop story proceeded similarly, with 51 intelligence experts claiming the story was Russian disinformation.

Michael Shellenberger and Matt Taibbi dub what their excellent reporting, beginning with the Twitter files, has uncovered the “Censorship Industrial Complex.” A lawsuit by the attorneys general of Louisiana and Missouri led to last week’s injunction from Federal Judge Terry Doughty, who wrote, “If the allegations made by the Plaintiffs are true, the present case arguably involves the most massive attack against free speech in United States’ history.”

Americans must push back against this censorship. I will consider only the tiny sliver posed by “Proximal Origin.” Here’s a potential response: permanently ban the paper’s authors from future federal research funding. We the people and taxpayers invest in research to make our lives better. Only scientists adhering to the highest standards can advance knowledge. Scientists willing to lie in such a publication have zero credibility to conduct honest research.

The “Proximal Origin” authors are not the only blameworthy parties here. Dr. Fauci, who was funding research at WIV through NIAID, appears particularly culpable. I would support punishment for this, but Dr. Fauci has since retired.

The federal government justifies social media censorship to combat misinformation. We still do not know whether COVID-19 emerged from the WIV. But discrediting the lab leak hypothesis represents pure government misinformation.

America celebrates 222 years of independence this July 4th. Our current political
polarization makes many question whether Americans are still united in freedom. I think
freedom is still widely embraced just two distinct visions.

The leaders of America’s founding generation studied lessons from political
theory and history concerning lost freedom. They were rooted in English liberal political
thought. Liberals sought freedom for the people against rule by kings, emperors, or
pharaohs and had radically altered government in England and Holland.

Thomas Jefferson’s words in the Declaration of Independence encapsulated
liberalism: “all men are created equal, that they are endowed by their Creator with
certain unalienable Rights … That to secure these rights, Governments are instituted
among Men, deriving their just powers from the consent of the governed.” Liberalism’s
foundation is the moral equality of all.

Slavery represented a glaring inconsistency in America’s experiment in freedom.
Liberal principles were inconsistent with slavery; many 19th century liberals were
abolitionists. Throughout human history, monarchs ruled nations and slavery was
ubiquitous. Liberalism eventually ended monarchy and slavery, but change took time.
Liberty as freedom from being ruled by a king is straight-forward. Divergence
occurred with further theorizing about freedom. Is the necessity of work a type of
repression, as reflected in Karl Marx’s “wage slavery”?

Economists think in terms of constraints on our choices, like a households’
budget constraint. Scarcity, the necessity of producing the goals and services we need
and want with limited resources, produces constraints. Making the best choice given
the constraints we face is the essential economic problem.

The divergent views of freedom can be interpreted as two types of constraints
people face. Some constraints result from Nature and scarcity, the need to produce
food, clothing, and shelter. Some constraints are placed on us by others, like kings,
lords, and slave owners. Liberalism addressed human-imposed constraints and viewed
freedom as freedom from interference by others.

A second vision of freedom addresses the constraints that Nature places on us
through scarcity. Economic rights secured by the government provide people with
sustenance for survival and liberate them from the necessity of working hundreds (or
thousands) of hours each year in a dreary job.

The push for economic rights emerged after political rights and the market
economy produced prosperity. A society at the subsistence level has no surplus
production to redistribute. With the Great Enrichment and modern prosperity, many
people produce more than they need to survive or live comfortably.

Proponents of the first approach view government efforts to provide economic
rights as coercive. Healthcare or housing must be produced before being provided to
anyone by right, and the government pays the cost. Taxpayers face forced labor until
Tax Freedom Day to provide the economic rights of others.

Proponents of the second vision do not consider this coercive. Representative
democracy ensures that citizens must give their deliberate consent to taxes and the
welfare state. Taxation with representation is not the tyranny of a king’s armed men
seizing your possessions.

We have two visions of freedom. One minimizes the constraints from other
persons and regards Nature’s constraints as natural. The second balances the
impositions from Nature and others. Conservatives and libertarians typically embrace
the former, progressives the latter.

I think that most Americans still care very deeply about one of these visions of
freedom. That the meaning of freedom has been elaborated over the last 250 years
should surprise no one. Many great thinkers have explored freedom since Jefferson
penned the Declaration.

Many people believe that freedom is worth fighting for; the accounts of George
Washington and his army or Mel Gibson’s speech in Braveheart inspire many of us.
Increasingly Americans on the right and left see themselves in an existential battle to
defend their freedom. A battle between two groups of freedom fighters is sure to be
ugly. We could perhaps ratchet down the acrimony by recognizing that we all value
(different shades of) freedom.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H.
Johnson Center for Political Economy at Troy University and host of Econversations onTrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.

Economists debate whether typical Americans are better off now than 50 years ago. The debate concerns the reliability of the Consumer Price Index (CPI). The Cost of Thriving Index (COTI) from American Compass and Oren Cass think tank contends that middle class prosperity is becoming unaffordable for American families.

Cass gained attention with the publication of “The Once and Future Worker.” He voices the frustration of many conservatives with free markets, particularly emphasizing how markets leave many Americans without jobs capable of supporting families.

The dollar loses value with inflation, making dollar amounts not comparable over time. Economists adjust dollar values using the CPI, yielding “real” as opposed to nominal values. Between 1985 and 2022 the CPI increased 142% and men’s median earnings 145%, leaving real income basically unchanged.

The term “thriving” is deliberately chosen, as the COTI measures the cost of a changing “middle class” life. By contrast, the CPI tries to measure the cost of the same items – a typical market basket – at different times. Cass contends that being middle class in 2022 does not mean having the same things as in 1985.

The cost index has five components: food, housing, health care, transportation, and education. The COTI compares the dollar value of income and costs in each year and reports the weeks of work at the median wage needed to afford the middle-class life. The COTI stood at 39.7 weeks in 1985 versus 62.1 weeks in 2022. (The cost and weekly earnings were $17,500 and $443 in 1985 against $75,700 and $1,219 in 2022.)

Similar results hold for women’s earnings or earnings by education attainment.

In his book, Cass argues that “without access to work that can support them, families struggle to remain in tact or to form in the first place, and communities cannot help but dissolve; without stable families and communities, economic opportunity vanishes.”

This is an important consideration. Families transmit values in society, which is why progressives seek to undermine the family. Men with low earnings are less likely to marry and their marriages tend not to last. Remember that these are averages and do not deny that happy families with Mr. Mom.

Competition from imports has devastated many American industrial towns. Free market economists often argue for unrestricted imports and government assistance for those losing their jobs. Cass points out though that a life on the dole ensures family disintegration.

Cass further points to regulation in the offshoring of manufacturing. When high labor costs drive jobs overseas, this is efficient since highly valued and paid American workers can take other jobs. This is not the case when regulations increase the cost of manufacturing here. Free trade evades regulations but devastates communities.

Does the COTI prove that middle class living has become unaffordable?

Economists Scott Winship and Jeremy Horpendahl challenge this claim for the American Enterprise Institute. They criticize the measurement of some costs and consider quality improvements.

The healthcare component uses the full cost of employer provided health insurance, including cost paid directly by the employer, but does not add this to earnings. Although this might seem to cancel in comparisons over time, the cost of healthcare has risen much faster than inflation, biasing the measure.

Education uses in-state tuition for public universities. But very few students pay the full tuition price; net tuition, or tuition minus any institution-granted scholarships, better measures cost. Sticker price tuition has increased significantly faster than net tuition, overstating the cost increase.

Winship and Horpendahl further address quality improvements, a major source of economists’ concern over CPI accuracy. Expenditures today purchase bigger houses, more reliable cars, and better medicine. They estimate that a properly measured COTI has increased by 4 weeks since 1985, not 22.

Oren Cass rightly focuses attention on the economic requirements of strong families. The debate over whether American families are better off now than a generation ago is vital. Economists’ difficulty conclusively answering this question is telling, as I doubt there was disagreement in 1922 about whether families were doing better than in 1885!

The transfer portal is changing college sports, particularly in combination with Name, Image, and Licensing (NIL) deals. The portal also illustrates the role of philosophies of life and work in our decisions.

College athletes (and students) have long transferred. Previously players transferring from one Division I (or FBS) program to another had to sit out a year. Consequently, player mobility has increased significantly. As one example, quarterback J.T. Daniels started at USC, transferred to Georgia for two seasons, played for West Virginia in 2022, and will play for Rice this year.

Transfer restrictions were controversial since coaches did not have to sit out when taking a new job. And players could not freely transfer after their coach left or was fired, even though new coaches might seek to make inherited players leave.

Many fans believe the transfer portal is ruining college sports, but that is not today’s subject. Let’s consider the transfer decision instead.

According to ESPN, 8,700 football players total and nearly 3,300 from FBS entered the portal between August 2022 and May 1, or almost 30 percent of FBS scholarship players. Thousands of transfers undoubtedly involve numerous factors, including being beaten out by another player, coaching changes, and family considerations. The potential for NIL money adds another rationale.

Some starters transfer, such as Jalen Hurts after starting two national championship games for Alabama. But consider the players who have not yet had success. Should non-starters transfer to find a team where they fit better or stay put, learn the system well, earn the coaches’ trust, and work to gain playing time?

The appropriate course of action depends on how to achieve personal success in football. Is hard work sufficient to take you as far as possible, or do you need a good fit? If you believe the former, then stay and work hard. If the latter and your current fit is not great, transferring is wise.

The hard work versus fit question arises in many life endeavors. Can any student succeed at any college? Or do class size, access to professors, and campus environment matter? Does a successful marriage require a perfect match or partners willing to work very hard? Should you work hard to impress your boss or find a boss who values your talents and contributions?

The best course of action depends largely on how you think the world works.

Many simple words to live by can be seen as statements about how the world works, which then guide behavior. “Hard work plays off,” “honesty is the best policy,” “the customer is always right,” or “live by the Golden Rule” all recommend courses of action based on the nature of the world.

Our views matter because we would be hard-pressed to definitively prove their validity. Daily life does not unambiguously reveal whether honesty is the best policy or if nice guys finish last. Before hard work yields success, our belief keeps us going.

Economists typically presume that people can easily determine their best course of action. In part this is because we begin with consumer choice. Consumers can easily tell if they prefer apples to oranges or chicken to steak. Economists then explain behavior with incentives: people work hard when they get paid well.

Yet this misses some important dynamics. Economists struggle to make sense of the work ethic, which correlates with prosperity. The work ethic makes sense as a view about hard work paying off. Holding this belief leads people to work hard.

Most of us pick up many of our views of how the world works from others, including parents, siblings, teachers, and grandparents. Such transmission ensures the persistence of widely held views. But maintaining the work ethic will be difficult when few people believe that hard work gets rewarded.

Few athletes compete collegiately without first practicing and training for countless hours. The transfer portal will not degrade athletes’ work habits. But the transfer decision illustrates how our beliefs about the world affect our behavior almost as much as incentives.

House Speaker Kevin McCarthy reached a debt ceiling compromise with President Biden and Senate Majority Leader Chuck Schumer. Unsurprisingly, fiscally conservative Republicans are criticizing the Speaker. Economics helps understand the challenges in attaining the best bargain possible under given circumstances.

House Republicans’ Fiscal Responsibility Act of 2023 revealed their debt ceiling wish list. Items included rolling back discretionary spending and capping its growth, reclaiming unspent COVID funds, ending the student loan repayment pause and cancelation, rescinding the hiring of new IRS agents, repealing the Inflation Reduction Act’s alternative energy subsidies, and strengthening work requirements for Medicaid and food stamps.

Bargaining models offer several insights. The more patient bargainer, the one able to stay at the table longer, gets better terms. The party making the last offer has an advantage. A better payoff if no agreement is reached helps a party negotiate better terms. And failed negotiations result from imperfect information, when one or both parties mistakenly think the other will accept bad terms.

A government shutdown or default on U.S. Treasury Securities was the outcome from no agreement. The payoff for each side in this event would be voters’ allocation of blame. The negotiating process itself could affect this; voters might blame and punish in 2024 a party refusing to bargain.

Neither side wants the other to think they will accept bad terms. This illuminates the Biden Administration suggesting challenging the constitutionality of the debt ceiling law before the negotiations. Successfully executing a ruse is difficult, as small tells reveal to a shrewd negotiator a willingness to accept less favorable terms.

Speaker McCarthy and Sen. Schumer both represented others who had to approve a deal. Representation creates a way to appear inflexible. Many union leaders have told management that their members would never accept given terms. People not in the room cannot give off any tells.

Studying economic models only helps so much. A good negotiator must be able to put insights to work in real bargaining.

Political bargaining is difficult for a second reason, namely discerning which goals to compromise on. A deal including every item in the Fiscal Responsibility Act is clearly good. Deciding which goal to not compromise or whether a half measure advances a goal is much more complicated.

Bargainers inevitably face Monday morning quarterbacking. Every Republican can claim he or she would have gotten a better deal. We cannot replay this negotiation with another Republican in charge, making such claims untestable.

Compromise is often unsatisfying. People who care strongly about a vision of the good society and the government policies needed to implement this vision will dislike compromising their values. We admire frequently uncompromising politicians.

The changing media environment over the past 40 years – talk radio, cable news, the internet, YouTube, and livestreaming – have given voice to purists on the left and right. Republicans think that uncompromising leaders – instead of Bob Dole, Paul Ryan, Mitch McConnell, or now Speaker McCarthy – would put liberals in their place!

This criticism confuses consistency in personal life and politics. We can always live by our personal values. We can always conduct our business and professional affairs by our (hopefully high) standards or treat others with decency and respect.

Politics is the making of government decisions affecting everyone. Liberals and conservatives cannot both implement the policies needed to attain their visions.

America is a liberal democracy based on the moral equality of citizens. This implies that only the consent of the governed legitimates government and that all citizens should
consent. Only compromise between the values of the left and right can secure consent of all the governed. Advocates of no compromise politics seemingly do not view those they would impose upon as their moral equals.

Did Speaker McCarthy get a good deal? Only political insiders can possibly judge this. The willingness to negotiate a deal acceptable to both sides is good news if we want America to remain a liberal democracy.

Economists think about jobs in a seemingly counterintuitive way. While noneconomists see job creation as a primary goal, economists view labor as a scarce resource to be conserved. This leads to differences of perspective on everything from government incentives to businesses to the impact of automation, including artificial intelligence (AI).

To understand the economic perspective, think about all the various things you want in life. A house or apartment to live in, food to eat, clothes to wear, and things to do for enjoyment.

These things require tasks to be done.

Houses must be built, clothes made, and food grown, transported, and prepared. Someone must do these tasks, and you must pay for those done by others. Consequently, working to earn money to pay others is itself an important task.

Your “to do” list quickly becomes overwhelming since there are only 24 hours in a day. This is scarcity, which means our wants and desires exceed our ability to satisfy them. Winning the Powerball jackpot will not solve these problems, since consumption takes time. Even if cost is not an issue, you will never eat in all the world’s restaurants.

Automating one or several tasks clearly improves life. Robot vacuums, riding lawn mowers, and clothes washers and dryers save time. They make life better provided that earning the money to buy them does not take more time than they save.

Further automation makes us even better off. A self-driving lawn mower is better than a riding mower and a self-driving mower for $50 is better.

We also benefit from automating the tasks others do for us. A sewing machine leads a tailor to sell us clothes for less. The logic applies down the line. If a restaurant pays less for food because of labor saving agricultural innovations, they will charge less for meals.

Time is the ultimate scarce resource. The best measures of cost of living over time convert prices into the work time required for purchase. HumanProgress.org calculates, for example, that a Frigidaire refrigerator cost 218 hours of work in 1956 versus 17 hours in 2022.

Our biggest economic challenge is getting the most productive work possible out of the available labor. Not just doing tasks quickly but prioritizing the most important ones. The labor market performs this through wages and salaries. A business unable to perform tasks quickly, say a lawn maintenance company not using riding mowers, will have high costs and be unprofitable. A worker’s earnings are the market’s admonishment to only use scarce labor only for sufficiently valuable tasks.

The more intuitive view celebrates job creation and mourns business closures. This view emerges from how we as employees experience the labor market. An economy based on specialization and the division of labor offers unprecedented prosperity but requires us to trade with others, and by implication that we work for a living.

We respond by specializing, that is, finding a task that others will pay for and learning to do this task well. We typically select jobs relying on our talents and abilities.

Increasingly we can find tasks we enjoy doing, making work not seem like work. A market economy offers no guarantees of employment. Automation, or what economist Joseph Schumpeter called creative destruction, can always render our job market skills obsolete. We fear our skills no longer being in demand. Research not surprisingly documents the significant, adverse health and mental health impacts of unemployment.

The two perspectives on jobs lead to contrasting interpretations of events, like the automation of tasks by AI. From the scarcity perspective this improves life – we can
get more tasks done. But the automated tasks provided jobs people had honed their
skills to perform.

AI and creative destruction involve a fundamental tradeoff between the economies of yesterday and tomorrow. We will never accomplish all our tasks, but it can be difficult to foresee how the tasks automation lets us perform will translate into good paying jobs.

The United States faces potential default in June as we run up against the debt ceiling, currently at $31.4 trillion. Whether the debt ceiling is good policy depends largely on one’s attitude toward Federal spending.

Is our national debt sustainable? I will defer to the judgment of financial markets. Interest rates compensate savers for being patient and for bearing default risk, the risk that borrowers may not repay the loan or interest payments.

The “risk free” interest rate is what investors would charge a borrower with no default risk. When default risk increases, investors will first demand a higher interest rate and then stop lending altogether.

U.S. Treasury securities have long been viewed as the risk-free investment. The inflation-adjusted (or real) interest rate on 10-year U.S. Treasury securities, courtesy of the St. Louis Fed, stands at 1.3%, over two percentage points higher than at the start of 2022. But this interest rate hike is widely attributed to the Fed’s tightening of monetary policy to combat inflation.

The debt to GDP ratio stands at historically high levels. But economists Jason Furman and Larry Summers argue that real interest payments as a percentage of GDP better measures indebtedness. This measure is not at record levels, suggesting that Washington has untapped credit.

Nonetheless, our current budget situation is troubling. The Congressional Budget Office (CBO) estimates this year’s deficit at $1.5 trillion, the third largest ever and seventh largest since 1962 as a percentage of GDP. Yet the economy is not in recession, we are at peace, and the COVID-19 pandemic is over. This represents a structural and not cyclical deficit.

Deficit projections depend on future policy choices so let’s consider entitlement spending. The CBO projects that Social Security and Medicare spending will increase from $2.3 trillion this year to $4.2 trillion in 2033. The deficit will increase significantly unless we cut spending or increase taxes.

Credit markets are voluntary; nobody must purchase Treasury bonds. At some point credit markets will say no more Federal borrowing. We would be wise to keep some credit for emergencies. Imagine financing World War II without any borrowing!

Now let’s turn to the debt ceiling, beginning with its history. Congress enacted the ceiling in 1917 to keep from having to approve each issuance of Treasury debt. The ceiling has been raised over 100 times since World War II and suspended on several occasions. Fiscal conservatives use the ceiling as leverage to push spending cuts, like the 1985 Gramm-Rudman-Hollings Debt Reduction Act and the 2011 budget deal.

The ceiling creates policy uncertainty for our economy. Uncertainty is unavoidable in life and especially business but hurts investment.

Government affects business in many ways, so uncertainty about government policy increases overall uncertainty. Failure to raise the debt ceiling will delay the repayment of bonds, drive up the Federal government’s interest rate, and potentially also other interest rates. A long-term budget agreement would be better than a fight over the ceiling every other year.

Evaluation of the ceiling depends mostly on how one views current Federal spending, not creditworthiness. If avoiding default were paramount, a deal could be done easily.

Republicans could agree to big tax hikes or Democrats could agree to freeze discretionary spending. These are not solutions due to their impact on spending.

The Biden Administration is considering challenging that the debt ceiling violates the 14th Amendment. I am not a constitutional lawyer, so I will not weigh in here. Fiscal conservatives have voiced opposition to this tactic, but we are a constitutional republic;
the constitutionality of any law can be questioned.

The inability to reach a compromise reflects our increasingly divided nation.

Legitimate government reflects the consent of the governed, meaning all Americans, because we recognize the equal moral worth of all citizens. Today both sides want to
force their preferred policy on the other by any means necessary. This is a tell that
many now view their fellow Americans as subjects, not fellow citizens.

The Biden Administration is battling what it terms “junk fees.” Is this consumer protection, or will it simply create additional costly regulation? The answer depends largely on how one views competition in markets.

The term junk fees include bank overdraft fees, credit card late fees, airline baggage and seat selection fees, hotel resort and destination fees, and entertainment ticket fees. In addition to capping or eliminating such fees, the Administration also wants transparency in pricing.

Before discussing any fees in detail, let’s consider the pricing process in markets. As economist Thomas Sowell observes, most intellectuals believe businesses exercise
considerable discretion over prices. Only public pressure or potential government
action checks corporate greed. Junk fees emerge from this rapaciousness to increase
revenue extraction from hapless consumers.

An alternative view recognizes that every purchase in the market is voluntary and that businesses face competition. The competition can be direct – from a rival airline – or indirect – travelers driving instead of flying. Businesses can set whatever price they want but are not guaranteed sales. Consumers are not hapless and as a groupdetermine which businesses profit and which fail.

Businesses seek profits but face real constraints if they wish to sell what they produce. The power of the market is real but intangible. A primary lesson of economics involves recognizing these invisible market forces at work.

Once we reject the exploitative view of markets, we can explore the functions different fees serve. Let’s start with checked bag fees. Airlines will be happy to provide baggage service, but travelers will have to pay for this. The question is how airlines charge for baggage service.

One possibility is through higher ticket prices and no baggage charges. In this case, passengers travelling light pay for others’ bags. Alternatively, airlines could offer lower ticket prices and bag charges, with the travelers checking bags paying for this service.

Fees provide an additional benefit. Each bag shipped involves costs; the marginal cost of extra baggage is not zero. With no bag charge travelers act as if shipping a bag is costless. Imagine a traveler who could pack light with one bag or heavy with two bags. If the traveler is unwilling to pay for the second bag, packing heavy is inefficient: the costs of shipping the bag exceed the value to the traveler.

How about bank overdraft fees? Banks charge these fees when a customer writes a check or uses a debit card without money to cover the transaction. The bank honors the transaction and charges the customer, including sometimes a fee for each day the account is overdrawn. Covering the check is effectively a short-term loan and costly. The fee also prods the customer to keep a higher account balance.

If banks cannot charge overdraft fees, all customers would share the cost of these loans, raising fairness concerns for customers never bouncing checks. Banks would likely end overdraft protection and possibly drop customers without sufficient account balances.

All-inclusive pricing raises different issues. It is frustrating when added charges yield a much higher price than promised. Yet this undermines the value of comparison shopping using an online booking site. Sites already have an incentive to address the resulting problem and will make better decisions here than federal bureaucrats who face no consequences for the destruction their regulations create.

One practice included with junk fees are free trials converting to paid subscriptions you can “cancel anytime.” Except that canceling is infinitely harder than signing up. This scheme is only profitable because the business makes cancelling more costly than continuing to pay. The customer does not value the service enough to willingly pay for it, so value is not being created. This is more like extortion than honest business and I will not defend this.

The “junk fees” characterization draws on a worldview where businesses abuse customers for sport and profit. Protecting consumers from junk fees promises to inject government into every detail of commerce. Americans should remember Ronald Reagan’s line about the nine most frightening words in the English language: “I’m from the government and I’m here to help.”

Diversity, Equity, and Inclusion (DEI) initiatives in business and higher education have become controversial. Texas A&M and Texas Tech recently ended DEI statements for faculty hiring and tenure. What is problematic about being welcoming and inclusive?

Let’s consider the underrepresentation of women in engineering. According to the National Science Foundation, in 2016 women earned 21 and 24% of engineering bachelor’s and doctoral degrees. The disparity exists across white, Black, and Hispanic students.

Everyone should be free to pursue the career of their choice regardless of gender or race. Such inclusion I hope is not controversial. Historical discrimination calls for extensive efforts to make women feel welcome today. Ivy League universities, for instance, did not admit women until 1969 (Yale). The service academies only admitted women in 1976.

Gender segregation did not reflect pure animus. Many educators believed separate men’s and women’s schools facilitated learning. The all-male Ivies had the prestigious Seven Sisters as counterparts, colleges like Barnard and Vassar.

Pioneering women in male-dominated fields faced discrimination and harassment. According to a 1960s survey, 90% of law firms would not interview women. Pioneers in law enforcement and firefighting had to overcome horrific harassment.

Discrimination can yield perceptions of hostility long after reforms. It is not enough to treat women in STEM fields fairly; young women must feel welcome. I favor strongly worded commitments to inclusion by universities and businesses.

Will this yield equal representation of men and women in every field? No. Career choices depend on preferences regarding work, which may differ between the sexes.

Consider building skyscrapers. This would be a nightmare job for anyone afraid of heights. If more women are afraid of heights than men, the free choices of individuals may yield a male-dominated job, but one in an economy where everyone can choose their career. Alternatively, drafting women afraid of heights to work on high steel to achieve gender balance is preposterous.

Once we eliminate legal barriers and harassment, can we attribute any STEM gender disparities to preference differences? Not necessarily. We also must consider the shaping of preferences.

Our preferences are at least partially socially constructed, shaped by many influences in our lives. Economists take preferences as given and as reflecting our genuine selves. Suppose young Jack and Jill both want to be rocket scientists. Adults encourage Jack and discourage Jill, who does not choose a STEM career. I think many people fear that these numerous social cues push gender roles on young people.

The interpretation of these cues gets to the DEI controversy. Here I mean the programmatic elements of DEI and the academic theories behind them. Consider the research on microaggressions, “brief and commonplace daily … indignities, whether intentional or unintentional…” But as Greg Lukianoff and Jonathan Haidt observe in “The Coddling of the American Mind,” intention matters significantly in evaluating action; the difference between murder and an accident is intention.

DEI programs have evolved from critical theory, the application of Marxist analysis to gender and race instead of economic class. Karl Marx viewed the features of markets as deliberately designed by capitalists. Similarly critical theory views slights as deliberate aggressive acts designed to discriminate against women. This worldview views all gender or racial disparities as intentional.

The alternative to Marx’s deliberate design is Adam Smith’s spontaneous (or emergent or unplanned) order. As one example, money evolved spontaneously as people recognized that trading with stones or gold or silver made life easier. The cues and prompts shaping preferences reflect the personal values and actions of millions of Americans, or an unplanned order.

Unplanned orders can be enormously complex, creating the potential for policies to have unintended consequences. Policies can negatively impact the intended beneficiaries. Since the impacts are not intended, we can modify the policies once werecognize the impacts.

Welcoming and inclusive universities are desirable. But programmatic DEI, including litmus tests for hiring, threaten to impose one ideology on higher education, impinging on open inquiry. Programs sold under the banner of diversity may enforce conformity.

The House Energy and Commerce Committee grilled ByteDance CEO Show Zi Chew as Congress seeks to either force a sale of TikTok to a U.S. company or ban the app. Multiple factors are producing a coalition to ban something enjoyed by millions of Americans.

One factor is social media’s alleged impact on anxiety and depression on teens. The research is out of my field of expertise so I will not comment on its strength. History though reminds that new media frequently produce panic. TV and video games supposedly harmed prior generations of Americans.

Even if social media and specifically TikTok harmed teens, we should try a more focused protection strategy first. Limiting minors’ social media access is not something I favor but would consider before a ban for all Americans.

National security issues have been more prominent, both the sharing of Americans’ personal data with the Chinese Communist Party (CCP) and TikTok’s propaganda potential. CEO Chew says the company will store American users’ data on servers outside of China and not share this with the CCP. Data sharing does not appear to have occurred to date.

I seriously doubt the company’s ability to keep users’ data from the CCP. The increasingly authoritarian CCP could, even if they do not already have backdoor access, threaten company executives (and their families) for access.

TikTok users should assume that the CCP can access their data. So what? Facebook, Google, and Twitter collect (and share and sell) similar data to TikTok. Lots of information about each of us is already available. The CCP could likely find out everything they could get about a user from TikTok through alternative means. TikTok’s critics are never specific about how the CCP will use all this personal data.

Big data is a boon for advertising, allowing companies to identify many other things their customers do, browse, or buy online. This helps target ads to persons most likely to buy a product.

Advertising is part of the voluntary market economy. Targeted ads might be disconcerting – like seeing an ad for a book I just browsed on Amazon pop up on another website – but help companies be more persuasive. No matter how many ads you see, you still must choose to make a purchase.

How does improving the effectiveness of persuasion affect government spying?

Do we fear targeted ads recruiting Americans to spy for China?

Now let’s consider TikTok as a communist propaganda tool. The competition for eyeballs on TikTok and social media is incredibly intense. Users looking for content from top TikTokers such as The Rock, Jason Derulo, Charlie D’Amelio, or Bella Poarch are not going to watch boring propaganda videos instead. I suspect propagandistic ads would be similarly ineffective.

Fears of CCP propaganda seemingly reflect the same mindset that Russian social media trolls swung the 2016 election. Yes, Russian government employees posted material on Facebook. And bot accounts liked and shared other content. The Russian-linked accounts posted little material and attracted less attention.

Furthermore, the CCP can more directly and effectively influence Americans. The lure of access to the Chinese market leads Apple, Disney, and the NBA to remain silent about China’s human rights violations. Many elected officials have lucrative Chinese business deals.

Politicians are proposing shutting down a successful business. Forbes’ John Tamny has described this as a “mugging.” Tens of millions of Americans choose to post and watch TikTok content, seemingly without fear of becoming pawns of the CCP.

Americans use TikTok to earn a living. Charlie D’Amelio makes over $100,000 per post from sponsorships. She and other TikTok influencers achieve this through their own talent and effort. The bar to shut down or disrupt the livelihoods of law-abiding Americans should be extremely high.

Valid national security claims must go beyond fears and possibilities. Otherwise, any business could be shuttered for its potential future foreign collaboration. Politicians should not be allowed to disrupt business and life because they fear monsters under the bed or seek votes in the next election.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.