In this episode, “curiosity snobs” Russ Roberts and Ian Leslie talk about Leslie’s book, Curious: The Desire to Know and Why Your Future Depends On It, how parents can help kids be curious (ask questions back, provide things to be curious about), and how puzzles like Wordle are different from mysteries like how the universe began. A question that Leslie says was motivating for him is, “Why are some people incurious?” And I found myself wanting to respond that everyone is incurious about most things. Even children asking 40,000 questions a year come to the end of what they want to know at some point. How does my brain grow, where was I before I was born, and why can’t I wear mermaid make-up all the time. To focus on topics like “Curiosity” and “Conflict,” Leslie must turn away from many other topics. Roberts’ different shifts in the guests and topics for EconTalk are also a turning away from other infinite possibilities.  One exchange I particularly liked was this:  Russ Roberts: “It’s interesting to me that mysteries, you’re suggesting because they’re bottomless, there’s always more to discover, but for some people that’s just a source of endless frustration. ‘Why would I learn about that? Tell me about something I can figure out.’ Ian Leslie: Yeah. That’s true. But, I think it ultimately is a deeper satisfaction; and not just in terms of fiction or art, but I think that’s how scientists think about their fields of investigation. They think about them as mysteries, not puzzles. They’re not kind of thinking, ‘Okay, if I write one more paper, I can kill this whole field of inquiry.’ Maybe some of them are actually some of the time; but generally speaking, they feel like they’re part of a kind of great river of inquiry that’s going to go on a long time and won’t be solved with one more bit of information. And, that’s why they love it: they’re enthralled to the mystery. Much of what researchers and academics do is turn big mysteries into small, solvable puzzles. How did the prohibition of French cambrics into England in the 18th century affect the market for cotton from India? This is a puzzle in the larger mystery of the nature and causes of the wealth (and poverty) of nations. The scientific method and the Enlightenment increased the number and quality of puzzles and people engaging with them.  Much of the conversation is about education and learning, including thinking about the relationship between knowing things (the geography of Europe) and knowing how to think about things (like the causes of World War II). Your memory gives you the material for thinking and this is part of why good early education for children is so important.   Both Roberts and Leslie are fans of the open-ended seminar (listen to more on that here with Zena Hitz), because it encourages a kind of exploration that is different from listening to an expert lecture. And much of what a good education should consist of reminded me of a favorite Adam Smith quote:  The great secret of education is to direct vanity to proper objects. (TMS, Section III.: Of Self-Command) While there’s much one could disagree with (I, for one, would much rather reread Agatha Christie’s Murder on the Orient Express than reread F. Scott Fitzgerald’s The Great Gatsby. Hercule Poirot is as fascinating as Jay Gatsby and better company) the episode has clearly earned the EconTalk tagline, “Conversations for the Curious.”  Leslie has been on EconTalk once before talking about his book Conflicted. He also has a substack called The Ruffian that you can sign up for. He must have been an early adopter because his first post is dated Aug 27, 2017. You can read a recent, unlocked (free) post here: https://ianleslie.substack.com/p/creating-thinking-deciding.   In the meantime, we’d like to hear what you took away from this episode. We hope you’ll take a moment to consider one or more of the prompts below:   1- Leslie projects a rosy perspective of changes as a result of curiosity being mostly positive and good. To what extent do you think this is true?    2- Both Roberts and Leslie express skepticism about trusting academic studies but also both think that knowledge can be acquired and that the acquisition of knowledge has improved the lives of many people. What sorts of processes or structures for curiosity-based inquiry should people look to?   3- Cities and strangers are presented as “engines of curiosity.” Jane Jacobs would agree, as we can learn from Janet Bufton. But cities often have serious challenges with things like violence and illness and poverty. Does curiosity necessarily cause conflict between those who value it and those who don’t? (Maybe we’ll have to read Leslie’s other book to find out…)   4- Speaking of conflict, Leslie suggests that curiosity and judgment often conflict. When you are curious, you are abstaining from judgements. When you are actively judging, you aren’t engaging in the same kind of open-ended curiosity as when you are not. Is he right about that? Can one be judging and curious at the same time? If not, why not?    5- A young girl who reads Fitzgerald’s The Great Gatsby (or, perhaps worse, watches one of the many quite glamorous movie versions) could be forgiven for wanting to be more like Daisy Buchanan. That, presumably, isn’t the kind of transformation that Roberts and Leslie would likely encourage and yet it’s part of curiosity and sympathy. How can curiosity be guided to proper objects? Roberts and Leslie discuss the importance of reading literature and being sympathetic in entirely positive ways but are they missing a concern about improper sympathy? When is sympathy bad?      (0 COMMENTS)

I was on a Zoom discussion on Friday put on by the Atlas Society, an organization whose employees and contributors subscribe in various degrees to Ayn Rand’s philosophy of Objectivism. David Kelley, who ran the discussion, noted that we are coming up next month to the 65th anniversary of the publication of Rand’s magnum opus, Atlas Shrugged. It was published on October 10, 1957. The discussion caused me to go back to my dog-eared copy and reread various passages I had noted. Between now and October 10, I’ll highlight some of my favorite passages. Here’s one that caught my eye Sunday morning. It’s a statement by James Taggart, one of the villains in the novel, about Hank Rearden, who has invented Rearden Metal, which is much more durable than steel: He didn’t invent smelting and chemistry and air compression. He couldn’t have invented his Metal but for thousands and thousands of other people. His Metal! Why does he think it’s his? Why does he think it’s his invention? Everybody uses the work of everybody else. Nobody ever invents anything. The person talking to Taggart, Cherryl Brooks quickly points out that all those other things were there for quite a while and asks, “Why didn’t anybody else make that Metal, but Mr. Rearden did?” In short, Brooks gets that there’s a division of labor without which Rearden could not have invented Rearden Metal. But none of that means that he didn’t invent Rearden Metal. This passage, which I first read when I was 17, reminds me of President Obama’s famous 2012 statement to business people and entrepreneurs: “You didn’t build that. Somebody else made that happen.” Note: I posted about “You didn’t build that” here and here. (0 COMMENTS)

Philosopher William MacAskill of the University of Oxford and a founder of the effective altruism movement talks about his book What We Owe the Future with EconTalk host Russ Roberts. MacAskill advocates “longtermism,” giving great attention to the billions of people who will live on into the future long after we are gone. Topics discussed include […] The post Will MacAskill on Longtermism and What We Owe the Future appeared first on Econlib.

The Economist, a venerable magazine created a century and a half ago to promote free trade, argues against rent controls, which have been spreading in the United States during the past few years (“American Cities Want Rent Control to Rein in Housing Costs: Economists Still Think They Are a Bad Idea,” August 25, 2022). It would be inconsistent to defend international free trade and oppose domestic free exchange. It may be an excess of pessimism for me to wonder if the magazine’s opposition has a bit mellowed in the past couple of years (see “Rent Control Will Make Housing Shortages Worse,” and “Democrats Clamour Again for Rent Control,” September 19, 2019). By weakening price signals that rental accommodations have become scarcer, rent control (a form of price control) prevents market adjustment including supply increases. Moreover, rent control hurts many poor households, who can least avoid the queues that are generated by prices below market equilibrium. For example, richer households are more capable of buying the apartments that landlords transform into condominiums to avoid rent controls. The magazines writes: Rent control also tends to benefit rich tenants more than poor ones. “The targeting of the benefits of rent control is completely backwards,” says Rebecca Diamond, one of the authors of the Stanford study. She notes that rent-controlled tenants in San Francisco have higher incomes, on average, than those living in unregulated properties. Another factor often neglected is that waiting lines increase the incentives of landlords to discriminate against poorer (and more risky) potential tenants. It is less costly to discriminate when ten persons want your available apartment than when only one potential tenant answers your ad. Defenders of the poor and virtuous promoters of income redistribution are often only proponent of “solutions” that increase government power. According to the OECD, Sweden suffers from the most restrictive rent controls among its member states. A consequence is that the average waiting time for legally renting an apartment in Stockholm is 8 to 10 years. Interestingly, 10 years was the typical waiting time for the delivery of a brand-new car in the old Soviet empire; the powerful, including the apparatchiks, were the ones able to jump the queue (see my Regulation article “Dispelling Supply Chain Myths” and the research by Luminata Gătejel referenced there). Note that rent increases are not only a matter of inflation, which boosts wages too, but also of higher relative prices caused by fewer housing units due to zoning regulations, especially in large cities where population is growing. Rent control, clamored for by social activists, is in large part a response to the perverse effects of previous government intervention—a frequent phenomenon. It used to be that Democrats favored rent control while Republicans opposed it. The difference is less obvious now: Enthusiasm for such policies is less partisan today than it was in the past. For years rent-control regulations existed in just five Democratic strongholds: California, Maryland, New Jersey, New York and Washington. … Since 2019 rent-control laws have been enacted in three additional states—Maine, Minnesota and Oregon—and they are being considered in half a dozen more. In 2019, The Economist observed that it is normal for politicians to respond to vocal discontent with measures that, like rent control, have no apparent cost for government itself. The Economist wrote: It is unrealistic to expect politicians to ignore voters’ demands. But the danger is that one abuse of power is replaced by another as renters, just like nimbys, campaign for regulations to lock newcomers out of the market. Although today’s residents might benefit from capped rent increases, outsiders, faced with less supply and fewer opportunities, will suffer. … Rent control harms almost everyone eventually because the housing stock deteriorates. This calls for some additional observations. First, it is indeed unrealistic to expect politicians to ignore voters’ demands, at least the vocal or weighty ones. Second, politicians who introduce rent control are likely the main beneficiaries in terms of political support. Third, it is understandable, and perhaps inevitable, that the typical individual does not understand supply and demand, not to mention more complex economic phenomena: he has little incentive to learn since his own vote or political participation has a near-zero chance of changing the outcome. This factor explains the popular support for rent control. Fourth, the only acceptable solution lies in constitutional or institutional limits to governments’ capacity to satisfy all demands addresses to it. (0 COMMENTS)

It was just reported that South Korea’s birth rate fell to a record low: Korean women were estimated, based on 2021 data, to have an average of just 0.81 children over their lifetimes, down from 0.84 a year earlier, the statistics office said Wednesday. A graph in the Bloomberg article provides some context: People need to stop talking about Japan’s birth rate and start talking about Korea. The world’s highest fertility rate is in Niger, at 6.7 children per woman.  Of course, South Korea and Niger differ in all sorts of ways.  But it’s worth noting that South Korea’s lifetime fertility rate was roughly 5 per woman back in the 1950s, a time when Korea was as poor as sub-Saharan Africa. If you talk to people in Korea, they’ll say that the birth rate is low because Koreans cannot afford large families.  That’s a bit odd given that (since 1960) South Korea has become richer at a faster rate than any other country on Earth.  How could Koreans in the 1950s afford large families? How can residents of Niger afford large families?  Yes, you can amend the argument to reflect rising expectations of the Korean middle class, but it still seems somehow inadequate.  It’s too easy an answer—for instance it doesn’t explain the huge gap with equally rich Japan. There’s another area where Korea is a world leader—putting pressure on students to do well in school in order to get accepted at good universities (and ultimately to get good jobs.)  Perhaps that competitive drive is pushing down birth rates, as Korean families try to maximize the average success of their children, not the total success. I sometimes wonder if highly competitive cultures are engaged in a sort of zero sum game arms race, trying to do better on arbitrary academic tests in order to get one step ahead of their neighbor.  That seems wasteful. And yet, I just said South Korea has the world’s fastest growing economy since 1960, so it’s not obvious that a relentless drive to succeed is a bad thing.  But perhaps even a good thing can be pushed too far.  How important is lots of extra hours of studying, at the margin? People often like to compare the educational regimes of Sweden and Finland.  By conventional measures such as test scores, Finland’s approach is more successful than Sweden’s.  The Swedes seem to focus more on making students happy. But there’s more to life than test scores.  For instance, Sweden is richer than Finland, despite its less competitive education system.  It’s also worth noting that Sweden has a higher birthrate.  Notice that blue tinted Sweden is an island of fertility between the reddish-orange of Finland and Norway: (In fairness, the gap between the Swedish and Finnish educational systems has narrowed in recent years.) I am agnostic on the optimal fertility rate, and I’m also agnostic on the question of what makes people happy.  Is having students study hard a good thing?  Is more fertility a good thing?  Does more GDP per capita make us happier (once we are a developed country)?  I don’t see the answers to any of these questions as being obvious.  And yet I see other pundits talk about what’s best with a high degree of confidence. PS.  Israel is a case worth thinking about.  Secular Jews have about 2 children per woman, whereas the most highly religious groups have about 6.6 children per woman, comparable to residents of Niger.  This explains why Israel is an outlier among developed countries. Sci-fi books often have Earthlings exploring the universe in the year 3000.  But I never see sci-fi books where most of the starship crew is Amish people, Haredi Jews, and Africans.   Seriously, it’s foolish to extrapolate current exponential growth rates, as the one constant in fertility is unexpected change. (0 COMMENTS)

Libertarians often get worked up over issues that seem trivial to others. I recall more than a few snickers years ago about libertarians and their obsession with stuff like “drinking raw milk.” What makes raw milk such a big deal? Why make such a fuss if a farmer in Wisconsin is told he can’t produce or drink unpasteurized milk? Aren’t there more important things to worry about? At the object level, yes, there are many things more important than the kind of milk one drinks. But the object level isn’t always the right view. Seemingly trivial issues can ultimately turn on issues of great importance, and the raw milk case is one such event. It’s worth looking at why that is. Briefly, a couple who owned a small dairy farm wanted to be able to sell raw milk through their private store to shareholders of their herd, as well as drink the milk they had produced on their farm. The government said no, the case went through the court system, and the farmers lost. To some, this might look like an unfortunate ruling but still not worth getting too worried about. But a closer look reveals why this case is much more significant than it might appear, because of what exactly the courts said when they issued their ruling. In the ruling dismissing the appeal of the farmers, the courts agreed with the claims of  the FDA and the Department of Health and Human Services that, among other things, “There Is No Generalized Right to Bodily and Physical Health,” writing in support of this claim that “Plaintiffs’ assertion of a ‘fundamental right to their own bodily and physical health, which includes what foods they do and do not choose to consume for themselves and their families’ is similarly unavailing because plaintiffs do not have a fundamental right to obtain any food they wish.” The court also agreed that “There is no fundamental right to freedom of contract.” In a later ruling meant to clarity the position of the court, Judge Patrick Fiedler wrote: no, Plaintiffs do not have a fundamental right to own and use a dairy cow or a dairy herd; no, Plaintiffs do not have a fundamental right to consume the milk from their own cow; no, Plaintiffs do not have a fundamental right to produce and consume the foods of their choice. Notice how strong the language is in these rulings. The courts are not making the (comparatively) moderate claim that people have a right to eat as they wish or preserve their health as they see fit, or to engage in voluntary private contracts, but that these rights can be overridden by some compelling public need and that this is one such case. Instead, the courts, FDA, and HHS maintain that you have no such rights to begin with. To the extent that you currently eat as you wish, or maintain your health as you see fit, that is only allowed if your chosen means of doing so align with what the state has decided should be permitted. But if the state decides everyone should adopt, say, a vegan, plant-based diet, according to these rulings, you would have no grounds to object. After all, what kinds of food you eat was, apparently, never your decision to make in the first place. That choice belongs to the state. So what looks like a trivial worry over raw milk actually involves serious questions about bodily autonomy and free choice, with implications going far beyond the milk offerings available in a private store on a small farm. To badly paraphrase a certain poet – First they came for raw milk, and I did not speak out, because I did not drink raw milk But they haven’t come just for raw milk. They came for, and took, bodily autonomy, contract rights, property rights, rights to health, and even the right to decide how you wish to eat. That’s why raw milk matters – and that’s why libertarians were and are right to be alarmed by its infringement.   Kevin Corcoran is a Marine Corps veteran and a consultant in healthcare economics and analytics and holds a Bachelor of Science in Economics from George Mason University. (0 COMMENTS)

Whether a right of revolution exists, whether a revolution will happen, and whether it will be successful are three different questions. The first question is a normative or moral question; the second, an economic question (see Mancur Olson’s The Logic of Collective Action); the third one, both a normative question (what are the criteria of success?) and an economic question (how does the revolution develops?). The answer to the normative question—is there a right of revolution?—depends on one’s ethical philosophy, and many were developed since homo sapiens started thinking. A right of revolution exists if one adheres to a consistent individualist philosophy where all individuals have equal value and rights. More specifically, it exists in the individualist political philosophy (and probably the zenithal one) that underlies the work of economists James Buchanan and Gordon Tullock, as presented in their 1962 classic The Calculus of Consent: Logical Foundations of Constitutional Democracy (see also my Econlib review). An individual right of revolution follows from the primacy of the individual over the collective, which is not to say that waging a revolution is easy nor that it will necessarily be successful. The French Revolution, for example, was rather unsuccessful by any classical-liberal criterion, except perhaps in a long-term perspective. The right of revolution is a typical belief of modernity, which Buchanan and Tullock have pushed to its logical conclusion: The individual may choose to reject the [social] “contract” entirely; he may revert to a “state of nature”—in this case a revolt against established social order. On ethical grounds the individual must always be granted the “right” to make such a choice, but, once he has done so, the remaining members of the group have no contractual obligation to consider the revolutionary to be subject to the protections of the “contract.” (p. 261) In his appendix to the book (each of the two authors has one), Gordon Tullock points out one important, but often neglected, corollary: The State should not have a monopoly of force. The oriental states were “too strong for society” and we should do everything in our power to avoid a similar situation. The State should have enough power to “keep the peace” but not enough to provide temptation to ambitious men. The State should never be given enough power to prevent genuinely popular uprisings against it. … In this, as in other aspects of our construction of the constitutional implications of a consistent individualistic philosophy, the shifts in the fraction of the population approving or disapproving certain changes are not of central importance. (p. 348) The last sentence—which captures the gist of our authors’ philosophy—means that it is not morally “of central importance” whether it is one or 75 million individuals who revolt against the state because their rights have been trampled upon. (In my opinion, though, Tullock should have written “individualist” instead of “individualistic.”) See also James Buchanan’s 2006 book Why I, Too, Am Not a Conservative (and my review in the spring 2022 issue of Regulation). Whether or how such a state is possible appears to be a crucial question of political economy. (0 COMMENTS)

Most recessions begin from a position where the economy is operating at close to its natural rate. Therefore, when we visualize recessions we tend to think of economies where output is depressed to a level well below its natural rate.In principle, recessions could begin at any point in the business cycle. A recession could begin when the economy was already operating at well below potential, with the 1937-38 recession being the most famous example. A recession could also begin from a position where the economy is operating well above potential, as in the case of the 1946 recession (and to a lesser extent 1969). In some recent blog posts, George Selgin provides a really insightful analysis of the post-WWII recession (here, here and here), which in many respects didn’t look much like a recession at all. For instance, unemployment remained low even as measured RGDP fell sharply (as wartime industries were unwound.)This period is difficult to evaluate due to the distortions caused by the imposition of wartime price controls and their removal after the war, which artificially boosted measured RGDP during the war and artificially depressed growth after the war. It is difficult to accurately measure the value of war output that doesn’t sell at market prices. In my view, a situation where the economy returns from a position of above potential back to the trend line is so different from an ordinary recession that another term would be appropriate—say “correction”.  But I don’t get to make the rules, and I accept that the profession as a whole refers to this situation as a “recession”. During this sort of period, you might expect output figures to look much worse than employment figures.  That’s because when the economy is overheated, firms are not able to hire as many workers as they would like.  There is a shortage of workers.  Why don’t firms simply raise wages to eliminate the shortage?  Because they are monopsonists in the labor market. When the economy slows, firms will continue hiring workers for a period of time.  You will see very weak RGDP growth numbers combined with very strong gains in employment.  Sound familiar?  As long as the economy merely returns to the previous trend line, unemployment need not rise to very high levels.  It might look like a recession, but it won’t feel like one. This has implications for monetary policy.  Those of us that favor level targeting argue that the economy will be more stable if the Fed promises to return its target variable (prices or better yet NGDP) back to the previous trend line after a shock pushes it away from equilibrium.  The Fed accepted this argument, but only for making up demand shortfalls, not offsetting demand overshoots.  In 2020, they committed to make up the undershoot in inflation with higher than normal inflation in the future.  But in late 2021 they refused to commit to offsetting an overshoot in aggregate demand with lower than target inflation in future years.  That was the Fed’s key mistake.  (BTW, supply-side inflation over or undershoots need not be offset under the Fed’s dual mandate.) Why did they make this mistake?  I’m not sure, but perhaps they confused economic corrections with garden-variety recessions.  They might have assumed that if the economy had overheated, bringing aggregate demand back to the previous trend line would push us into recession.  In a technical sense that might be true (depending on how sharp the adjustment), but it would be a recession utterly unlike anything we’ve experienced since 1946.  A sort of painless recession. To be sure, the Fed could very easily overshoot and create an ordinary (painful) recession, with output well below trend and high unemployment.  Ironically, the Fed’s refusal to do symmetric level targeting makes that unfortunate outcome much more likely.  With level targeting, monetary policy mistakes have less severe consequences, as market anticipation of future make-up policy corrections prevents demand from moving as far off course as otherwise.  In other words, the Fed is making it hard on itself with its “let bygones be bygones” approach to stabilizing demand.   (0 COMMENTS)

Economist Elizabeth (Betsy) Bailey died on August 19. She was one of the key members of the Civil Aeronautics Board who helped deregulate airlines under President Carter. Carter nominated her to one of the Republican slots. Why do I call her Betsy? Because I saw her speak once–I can’t remember where–sometime in the mid to late 1970s, and she encouraged the audience to call her Betsy. Here are some nice quotes from the Washington Post obit: Dr. Bailey was a forceful supporter of deregulation and set out, as she put it, to “free the airline industry from the tentacles of restrictive government.” “I think we should rely more on market forces to determine the price and variety of air services,” Dr. Bailey told the New York Times upon her appointment to the panel. “What is so exciting about joining the board at this time is that I can point out what regulatory reform is all about — getting the regulatory agency out of making every little decision about how much a ticket costs, and leaving some things to the market.” And: “There are a lot of people who have never had enough money to go to Europe,” she added. “The idea of offering lower fares and special services is really appealing. I only wish I’d been at the board [sooner].” And: “I know lots of people who went to work for the government and found they were bored. I never had that experience,” she told Forbes in 1983, reflecting on her time on the Civil Aeronautics Board. “In fact, I never had as much fun professionally as I did in deregulating the airlines. Every time I step onto a [discount] flight I get to reap some of the benefits of my work in Washington.” And sadly: Elizabeth E. Bailey once reported for a meeting at Bell Laboratories, where she was chief of economic research in the 1970s, when a male executive directed her to take notes in the back of the room. He had assumed she was a stenographer. HT2 Tyler Cowen. Here are the two articles on airline deregulation in David R. Henderson, ed., The Concise Encyclopedia of Economics: 1st edition: Alfred E. Kahn, “Airline Deregulation.” 2nd edition: Fred L. Smith, Jr. and Braden Cox, “Airline Deregulation.” (0 COMMENTS)

Attempting to mask the ugliness of the Biden Administration’s ‘forgiveness’ of student loans, the President’s Democratic friends are comparing it favorably to the Payroll Protection Program (PPP), a program put in place during the pandemic that extended loans to businesses and then forgave these loans if the companies kept their employees. Here’s Sen. Bernie Sanders (I–VT) making the comparison: “If we could afford to cancel hundreds of billions in PPP loans to business owners in their time of need, please do not tell me we can’t afford to cancel all student debt for 45 million Americans.” This argument is lame. In this case, the massive $800 billion PPP that the government could “afford” to make is simply the inefficient and unfair disbursement of funds that the government is able to do because it has access to other people’s money – that is, to taxpayers’ money. What happened with the PPP provides no excuse to double down or pass an even worse program such as the ‘forgiveness’ student loans. It’s also a bad comparison. The student-loan forgiveness move was done unilaterally and likely on very shaky legal grounds while the PPP was passed with bipartisan support by Congress – and passed when the economy was being forcibly locked down. Further, student-loan forgiveness helps only those kids who went to college using funds borrowed willingly. These debts are now to be paid off by many people who didn’t go to college because they couldn’t afford to and those who have already paid in full their collegiate debts. In theory, the PPP applied to all “small” businesses not just to, say, green energy or other favored industry companies. (FYI, according to the Small Business Administration, 99.7 percent of businesses are “small,” thanks to its ridiculously large definition of the word “small.”) And loans from the PPP were designed to be forgiven from the get-go as an incentive for companies to keep their employees. There were no such expectations or requirements on students borrowing money to go to college. Now, many people are foolishly glorifying PPP as if it was a wonderful program. As I have written here (and in many other places ever since the PPP was announced), it wasn’t close to being wonderful. By most accounts, the PPP was a $800 billion failure. It was regressive in its own way, in part because the companies most likely to apply for PPP loans were those who were big enough to know how to navigate the bureaucratic nightmare that is the Small Business Administration’s application process. Also, many of the companies that got loans under the PPP which were subsequently forgiven where never at risk of getting rid of their employees, since these workers easily transitioned to working from home. Most of the loans went to economic sectors that were among those least economically affected by the pandemic. Also, many PPP loans went to big companies (shocker!). Finally, the whole point of the PPP was for companies to keep their workers, but as is always the case with bailouts, it mostly benefited shareholders, not workers. Peter Suderman writes: “A recent study of the program’s effects from the National Bureau of Economic Research (NBER) finds that the majority of the funds spent by the program went to business owners and shareholders rather than to workers themselves. Ultimately, “only 23 to 34 percent of the program’s funds went directly to workers who would have otherwise lost their jobs.” The jobs kept in place by the PPP were preserved at very high cost—somewhere between $170,000 and $257,000 a year, far more than the typical earnings of affected workers, which are closer to $58,000 per year. While the PPP was able to save some jobs, albeit at a very high cost, the overall result of the program was precisely the opposite of what was intended. The purpose of the program was to preserve the jobs of wage workers, not to funnel money to business owners. As David Autor, a Massachusetts Institute of Technology economist and the lead researcher behind the paper, told The New York Times recently, “it turns out [the money] didn’t primarily go to workers who would have lost jobs. It went to business owners and their shareholders and their creditors.” The program, he added, was “highly regressive.” “ So there you have it; PPP and student loan forgiveness are comparable after all. They are both terrible policies. The student loan forgiveness one is simply much worse.   Veronique de Rugy is a Senior research fellow at the Mercatus Center and syndicated columnist at Creators. (0 COMMENTS)