A Century of Progressive Apartheid.

By Paul Moreno, Law & Liberty, May 26, 2026.

Excerpts:

This year marks the centennial of zoning in the United States, when the Supreme Court upheld comprehensive municipal land-use restrictions over the claims of property owners. The decision, Euclid v. Ambler Realty, was a milestone in the progressives’ campaign to overcome constitutional impediments to their plans for social engineering. In the ensuing century, zoning fundamentally altered the geography of American life, turning what had just become an urban-majority nation into a suburban one. Critics on both the libertarian right and woke left condemn zoning as a back-door version of apartheid, a stealthy way to keep immigrants and blacks out of “desirable” neighborhoods.

And:

Baltimore enacted the first residential segregation law in 1910. Louisville enacted a law that prohibited members of one race from moving into a block in which the other race was a majority. The NAACP cleverly arranged a case in which a white man, Buchanan, sued to overturn the law. Buchanan sold his house on a white-majority block (situated between the only two black-owned houses on the block) to a black man, Warley. When Warley refused to complete the purchase because of the Louisville ordinance, Buchanan sued him. Given his house’s situation between the only two black-owned houses on the block, Buchanan argued, no white man would buy it. In Buchanan v. Warley (1917), the Supreme Court struck down the Louisville law as a violation of individual property rights. Edward Bassett, the “father of zoning,” lamented that cases like this indicated that American law “gave real estate owners almost total control over the use of their property.”

DRH comment: “American law ‘gave real estate owners almost total control over the use of their property.’”

Oh, the horror.

The proponents of such laws supposed they would manage unruly new immigrant populations. Progressive economists like Richard Ely characterized these immigrants as “beaten men from beaten races, representing the worst failures in the struggle for existence,” and planners promoted zoning as a “means for preventing race deterioration.” Progressive sociologist Edward A. Ross had coined the term “race suicide.” (Stanford University fired him for his advocacy of Asian immigration exclusion, which gave rise to the movement for tenure to protect “academic freedom.”) Theodore Roosevelt popularized it. He called the limited child exemption in the first income tax “a premium on race suicide.” Eugenicists believed that zoning to promote single-family homes would encourage the fertility of the native-born, and the tax code still provides for the deduction of home mortgage interest payments.

Spencer Pratt is now pressure-washing ads into dirty LA sidewalks.

By Cardinal Pritchard, notthebee.com, May 25, 2026.

Excerpt:

This might be the single most impressive political advertisement of all time, and I’m not even trying to exaggerate.

Expanding Treasury’s Do Not Pay System Would Strengthen Welfare Program Integrity.

By Romina Boccia and Tyler Turman, Cato at Liberty, May 26, 2026.

Excerpt:

State-run, federally funded welfare programs lose billions of dollars to improper payments every year. Examples abound. Medicaid paid more than $200 million to deceased enrollees in one year; 2.8 million peoplewere enrolled in two or more Medicaid/​Obamacare exchange plans in 2024; and half a million Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) recipients were reportedly receiving benefits twice or more under the same name.

Medicaid and SNAP alone combined for nearly $50 billion in payment errors in fiscal year (FY) 2025. Most of that money is never recouped.

The Treasury’s Do Not Pay (DNP) system, a data-sharing tool that screens payments for eligibility in real-time, is designed to solve these problems by catching erroneous payments before the money goes out the door. But the system is underutilized and underequipped, and agencies are not required to respond when it flags potential errors. Congress should address these shortcomings by strengthening

and expanding the use of DNP. More importantly, Congress should pair it with structural reforms that give states a stronger reason to use the system properly.

Trump Policy Could Send Legal Residents Abroad To Apply for Green Cards.

By Tosin Akintola, Reason, May 26, 2026

Excerpt:

As the Trump administration continues its deportation crackdown, it’s finding new ways to make it harder for people to immigrate to the United States legally.

On Thursday, U.S. Citizenship and Immigration Services (USCIS) published a policy memo requiring anyone seeking an adjustment of immigration status to do so “outside the United States,” unless they qualify for “extraordinary circumstances.”

This policy—which is effective immediately but lacks the force of law, as it’s a guidance document—would be a sharp departure from the current process that allows those here on temporary status to apply for permanent residency without leaving the country. According to the memo, the shift in policy is an attempt to “faithfully apply the statutes” of the Immigration and Nationality Act (INA), specifically section 245, which governs the process for transitioning from temporary to permanent residence status.

DRH comment: Notice that the author says that the policy lacks the force of law. The problem is that that might not stop the feds. A case in point is the friend of a friend. She’s from Venezuela and came here legally. She married an American and applied for her green card. The feds are taking years to grant it and so every year she needs to show up to maintain her status. That has been easy until now. But, as I understand it from our mutual friend, she’s afraid that because of this new policy the next time she shows up she will either be arrested or be required to self-deport. The good news is that her husband could do his job almost as easily from Toronto or Monterrey, Mexico. Whatever she and her husband decide, I recommend getting a first-rate immigration lawyer.

As I noted last week, the Wayback Machine has come to the rescue on the articles that appeared in the first edition of my Concise Encyclopedia of Economics. I’ve read rumors, though, that we can’t depend on its being around forever.

So occasionally I will post some of my favorite articles from that edition so that if the Wayback Machine disappears or drops links, those articles will still be available online.

Today I’m highlighting “Drug Lag.”

Drug Lag

By Daniel Henninger

The modern history of drug regulation in the United States has been marked by the simultaneous pursuit of two goals—safety and efficacy. Since passage of the 1962 amendments to the Food and Drug Act, most members of the medical and regulatory establishment have regarded those two goals as complementary. By the early seventies, however, critics had begun to charge that the Food and Drug Administration (FDA), in its pursuit of these goals, was delaying or preventing the timely introduction of promising new drugs for seriously ill patients.

With the 1962 amendments, Congress gave the FDA authority to judge a drug’s efficacy—whether it produced the results for which it had been developed. Formerly the agency had monitored only safety. Indeed, from 1938 until 1962, the FDA had just sixty days to disapprove the application of a new drug. If it did not, the drug could be marketed. The system worked without significant incident. But in 1962 the thalidomide tragedy hit the world.

A sedative used to prevent miscarriage, thalidomide caused the birth of several thousand deformed babies in Europe. Thalidomide was not so major a tragedy in the United States, however, because the existing safety regulations allowed the FDA to catch it early. Ironically, the publicity generated by pictures of deformed newborns in Europe led Congress to amend the U.S. drug laws to add an efficacy requirement to the existing safety rules, even though the problem with thalidomide was safety, not efficacy. Congress gave the FDA the authority and latitude in judgment to decide whether a new drug did what it claimed it could do. It was not long after this expansion of regulatory responsibility that the phrase “drug lag” entered the lexicon.

Some critics charged that the efficacy requirement was extraneous to the agency’s central mission to monitor safety. The often complicated procedures created for assessing a drug’s efficacy added to the years required to get a new drug into general use. A 1974 study by University of Chicago economist Sam Peltzman concluded that since 1962 the new rules had reduced the rate of introduction of effective new drugs significantly—from an average of forty-three annually in the decade before the amendments to just sixteen annually in the ten years afterward. Peltzman also found that the regulations also made it difficult for companies to introduce drugs that competed with existing drugs, thus reducing competition in the industry.

The drug lag controversy intensified with the rise of the AIDS epidemic. On October 12, 1988, a large group of AIDS activists staged a demonstration at the FDA’s headquarters in suburban Washington, chanting, “No more deaths!” They were protesting the snail’s pace at which the FDA was approving new drugs to combat AIDS. These and other critics, who complained about the agency’s handling of drugs to treat cancer and heart disease, posed a new and controversial question about drug delays: was not the federal agency charged by Congress with protecting ill Americans from harmful or useless drugs actually causing great harm to patients, precisely for exercising its congressional mandate?

Have patients in other countries gained access to new drugs sooner than patients in the United States? The Center for Drug Development at Tufts University studied forty-six new drugs approved by the United States in 1985 and 1986 and found that 72 percent were available on average 5.5 years earlier in foreign markets. Other studies, comparing drug approvals back to 1972, have suggested a similar time lag in the United States. Meanwhile, the costs of development rise. The cost of developing a new drug in the United States is estimated to have risen to $231 million today from $54 million in 1976 (all in 1987 dollars), with the approval time from earliest development to final marketing typically about twelve years.

The FDA responded to complaints about drug lag and the availability of promising experimental drugs by introducing a number of reforms. The most notable was “fast track” approval of the AIDS drug AZT, which was cleared for use within two years after it was discovered to be effective against the HIV virus. Other reforms allow patients access to promising experimental drugs. Unfortunately, to qualify to provide experimental drugs, administering physicians must meet burdensome paperwork requirements, such as the need to draft a “treatment protocol” for submission to an institutional review board, a practice more common to university-based clinical investigators. Also, because insurers will often resist payment for unapproved drugs, the rules limit the amount manufacturers may charge to “cost recovery,” loosely defined as excluding charges that would constitute “commercialization” of the drug. Manufacturers, therefore, have little incentive to provide the drugs.

The severest criticism leveled at the drug lag is that without access to a drug available elsewhere, seriously ill patients will suffer or even die. Peltzman raised the subject in his 1974 study. He noted pharmacologist William Wardell’s estimate that because the relatively safe hypnotic drug nitrazepam was not cleared for use in the United States until 1971, five years after it was available in Britain, more than 3,700 Americans may have died from less safe sedatives and hypnotics. After earning the Nobel Prize for chemistry in 1988, U.S. drug researcher George Hitchings of Burroughs Wellcome Company said of an antileukemia drug he helped develop before the 1962 amendments: “We went from synthesis to the commercial drug in three years. That is absolutely impossible today.”

The issue of lost lives became more widely discussed with the controversy over the availability in the United States of drugs known as beta blockers. Beta blockers, administered to reduce risk to patients who have experienced a heart attack, were available in Europe in 1967 but not in the United States until 1976, primarily because of the FDA’s concerns that long-term use might cause malignant tumors. When the agency ordered long-term animal studies to investigate this risk, critics argued that in risk-benefit terms, the agency’s delay was unjustified, because beta blockers were estimated to save at least ten thousand lives annually. Similar arguments over delayed approvals have erupted over the FDA’s handling of anticancer agents and drugs that dissolve blood clots in heart attack victims.

Those attempting to explain the FDA’s cautious approach often cite one factor peculiar to the American system: politics. A 1972 remark by former FDA commissioner Alexander Schmidt aptly describes political pressures on the agency:

The times when [congressional] hearings have been held to criticize our approval of new drugs have been so frequent that we aren’t able to count them.... The message to FDA staff could not be clearer. Whenever a controversy over a new drug is resolved by its approval, the agency and the individuals involved likely will be investigated.... The congressional pressure for our negative action on new drug applications is, therefore, intense.

With the FDA facing such incentives, drug lag is inevitable.

To a great extent the FDA’s caution in approving new drugs has reflected prevailing political and social attitudes toward risk in the United States. An analogous example of zero-risk policy-making in this period is the Delaney Amendment of 1958, which mandated the banning of any substance that caused cancer in one type of animal, even if the doses are extreme and the substance does not cause cancer in other animals.

In the eighties scientific and public attitudes toward risk began to change. Researchers, for example, developed more sophisticated methods of detecting levels of toxicity and carcinogenicity in chemicals, which, in turn, caused regulators to reassess the kind of absolute prohibitions imposed by Delaney. In 1986 the FDA said that based on state-of-the-art toxicological testing, it intended to reclassify certain dyes as safe to use in cosmetics. It noted that a scientific review panel of the U.S. Public Health Service had calculated the risk of cancer in humans from orange dye no. 17 to be, at worst, 1 in 19 billion. A court challenge from Public Citizen, an advocacy group founded by Ralph Nader, prevented the agency from following through with its plan, but the debate over zero-risk regulation continues. Studies by analysts such as Aaron Wildavsky (see Riskless Society) also have popularized the idea that in assessing the value of a drug, chemical, or technology, its benefits ought to be balanced against apparent risks.

The AIDS crisis forced the FDA and the rest of the medical establishment to consider these evolving attitudes toward risk. Many of the compounds under study to treat AIDS were unfamiliar, and some were known to be highly toxic. Under traditional regulatory practice the agency would have approached these therapies with time-consuming caution. Activist groups representing AIDS patients, however, argued that individuals with a terminal illness would willingly assume levels of risk higher than those normally allowed by the FDA. To press their claims, AIDS groups engaged in acts of civil disobedience, such as smuggling unapproved drugs into the United States from Mexico, disrupting important conferences of AIDS researchers, and picketing the FDA’s headquarters. Press coverage, historically supportive of the agency’s bias against risk, became supportive of these new concerns from patients.

This pressure led to a significant reassessment of the entire system of developing and approving drugs in the United States. AZT was approved in record time even though it was highly toxic and often produced severe side effects during clinical trials. Though the U.S. drug-approval system responded positively to the AIDS crisis, whether the system will undergo lasting, institutional change remains unknown. Patients’ demands that they determine for themselves the risks they find acceptable often conflict with the FDA’s long history of making decisions for patients in spite of their desires.

Moreover, even if regulators, patients, and researchers settle on a system that gives greater weight to benefits in setting acceptable levels of risk, the question of legal liability remains. FDA approval does not fully protect a drug manufacturer from liability claims, and however much society’s sympathies may evolve in the direction of benefits, a single lawsuit on behalf of one plaintiff can expose manufacturers to enormous claims.

After settling 450 cases, G. D. Searle, in 1986, took its Copper-7 IUD off the market because the costs of defending a product ruled safe by the FDA had become prohibitive. Perhaps the most notorious case of a safe drug driven off the market by personal-injury litigation is Merrill Dow’s Bendectin, a remedy for morning sickness in pregnant women. Though 33 million women had used the approved drug between 1956 and 1983, and though Merrill had never lost a case filed against it, the prospect of litigating some 700 cases filed by plaintiffs’ attorneys caused the company to drop the drug.

Ultimately, the political process will decide whether U.S. regulatory practices should be changed to accommodate the desires of patients and to shorten the lag between approvals here and in Europe. Normally, political decisions about regulatory practice are made among a small community of specialists. Today, the intense interest in curing, or at least ameliorating, diseases such as cancer, AIDS, heart disease, arthritis, and Alzheimer’s means that the outcome of the debate over the drug lag is likely to reflect the values of an unprecedentedly large community of public interests.

About the Author

Daniel Henninger is the deputy editor of The Wall Street Journal‘s editorial page. He wrote most of the Journal‘s editorials on drug regulation that appeared in the 1980s.

Further Reading

Henninger, Daniel. “Will the FDA Revert to Type?” The Wall Street Journal, December 12, 1990, A16.

Kaitin, K. I., B. W. Richard, and Louis Lasagna. “Trends in Drug Development: The 1985-86 New Drug Approvals.” Journal of Clinical Pharmacology 27 (August 1987): 542-48.

Kazman, Sam. “Deadly Overcaution: FDA’s Drug Approval Process.” Journal of Regulation and Social Costs 1, no. 1 (September 1990): 35-54.

Kessler, David A., M.D., J.D. “The Regulation of Investigational Drugs.” New England Journal of Medicine 320, no. 5 (February 2, 1989): 281-88.

President’s Cancer Panel. National Cancer Program of the National Cancer Institute. Final Report of the National Committee to Review Current Procedures for Approval of New Drugs for Cancer and AIDS.August 15, 1990.

Report of the Presidential Commission on the Human Immunodeficiency Virus Epidemic. February 1988.

Wildavsky, Aaron. Searching for Safety. 1988.

I was talking to a friend yesterday who told me that Charley Hooper’s and my book, Making Great Decisions in Business and Life, actually helped him with important decisions in his life. He singled out the first story we tell: The Case of the Stanford Limousine. The point he got was that it doesn’t make sense to forego important benefits to save small costs. That’s not a bad summary of the point.

I told him how it had affected my decision about having dinner with John Stossel and his wife.

First the story, copied from our book.

The Case of the Stanford Limousine

My (Charles’) brother Douglas Hooper has photographed hundreds of weddings in the San Francisco Bay Area. One of them was at Stanford’s Faculty Club in the summer of 1999. The ceremony was complete and the reception was progressing nicely. The mariachi band had gotten everyone in a celebratory mood, and the disk jockey took charge of the dance music. The wedding couple’s 225 guests were enjoying themselves, lost in conversation, food, and drink at this upscale, prestigious university restaurant. Douglas was preparing to photograph the remaining elements of the reception—the cake cutting, bouquet throwing, and garter toss—when the wedding couple, looking harried, approached him. They explained that they had to leave at precisely 5:00 PM, a time that was quickly approaching. And leave they did.

The mystery of their sudden departure was soon revealed. They had left at precisely 5:00 to avoid paying their limousine driver’s customary fine of one dollar a minute for tardy passengers.

Think about it. After planning for a year, inviting hundreds of people, and spending many thousands of dollars, the happy couple cut short the event they will remember their whole lives to avoid paying a fine of $1 a minute.

Let’s put that dollar-a-minute into perspective. Assume that, on average, the 225 attendees spent $200 for clothing, travel, gifts, and lodging—a total of $45,000. Assume, also, that the bride and groom spent $30,000 (probably more) for rental of the Stanford Faculty Club, food, drinks, music, and everything else. Then the total cost of the wedding was $75,000. Including the ceremony, the event lasted just over five hours, for a cost of $15,000 per hour. Had the bride and groom stayed the extra hour, from 5:00 to 6:00, the cost would have been an additional $60, or one two hundred and fiftieth (1/250^th) as much. Even ignoring what everyone else spent, the additional $60 would have been only one one hundredth (1/100^th) as much per hour as what the bride and groom had already spent. What were they thinking?! Perhaps they weren’tthinking.

If they had stopped to consider the situation differently—if someone had asked them if they would like to extend their party for a mere $60—no doubt they would have happily agreed. They could have even passed around a hat and collected 27 cents from each guest. If their wedding guests were typical, the newlyweds would have been fighting off uncles and aunts shoving fistfuls of money at them and demanding to pay the whole amount.

Now my story. I had done a study of how the Canadian government, from about the mid-1990s to the middle of the first decade of this century, had slashed government spending as a percent of GDP, turning budget deficits into budget surpluses, and reducing the federal debt as a percent of GDP by over half. My friend Veronique De Rugy had done a study showing the French government had gone in the opposite direction. We were both invited to tape a show with John Stossel on the Fox Business Network.

When we sat down in the studio, John jokingly pointed to Vero and said “bad” and to me, saying “good.” Vero was to talk about the bad French experience, and I was to discuss the good Canadian experience.

Then he surprised me. He asked both Vero and me to come back to his apartment and have dinner with his wife. Vero answered that she needed to get back to D.C. that evening because she had two young daughters depending on her. I answered that I needed to fly home to Monterey that evening.

“Oh well,” said John, “maybe some other time.”

We taped our show and it went well. I left the studio to go into the next room while John was recording another segment.

That’s when it hit me: there was probably not going to be a next time. How often did I make it back to NYC to do a segment with John while he also had time in his schedule to invite me for dinner.

“You idiot,” I said to myself. “This is the Stanford limo. I don’t even have classes tomorrow. I can pay for one more night of a hotel and, given the airfare they got me, it can be changed without penalty.”

I found his assistant and told her that I had changed my mind. She contacted John with a walkie-talkie or some other communication device. John said it would work.

Together we took the subway to his beautiful apartment, and I had a wonderful dinner with John and his delightful wife. All because I remembered the story of the Stanford limo.

Banks Are Not Immigration Enforcement, Mr. President.

By Nicholas Anthony, Cato at Liberty, May 20, 2026.

Excerpt:

When the original executive order leaked, David Bier and I both warned that forcing banks to collect citizenship information would be a mistake. Despite claims from Treasury Secretary Scott Bessent that he doesn’t read our work, it seems our warning didn’t go unheard because the new executive order takes a slightly different path.

Rather than immediately deputize banks as immigration officers, President Trump ordered the Department of the Treasury to advise banks of the risks of serving undocumented immigrants. That would be small on its own, but then President Trump goes further, saying banks need to start reporting people they suspect of being in the country illegally or of engaging in other illegal activity. This reporting would be done through suspicious activity reports (SARs) under the Bank Secrecy Act.

The SEC Throws in the Towel on Gag Orders.

By Clark Nelly, Cato at Liberty, May 20, 2026.

Excerpt:

Earlier this week, the Securities and Exchange Commission quietly repealed a self-servingly speech-suppressing policy it had maintained for more than 50 years: the so-called “no-deny” rule, which required settling defendants in civil enforcement actions to promise—as a non-negotiable condition of settlement—that they would never publicly dispute any of the SEC’s sometimes spurious allegations against them. And while the repeal of this policy is welcome, the timing suggests that it had far more to do with avoiding a smackdown from SCOTUS than any genuine solicitude for the First Amendment.

The gag rule was promulgated in 1972 and was purportedly intended to prevent the public from getting the “incorrect impression” that a sanction had been imposed for misconduct that didn’t actually occur—in other words, to protect the agency’s reputation. But its practical effect was far more corrosive: the gag order systematically silenced precisely those people with the most credible stories to tell about the SEC’s abuse of its enforcement power.

The Causal Effect of Income is (Often) Zero.

By Maxwell Tabarrok, Maximum Progress, May 19, 2026.

Excerpt:

The causal effect of wealth on mortality is zero. That means that if you took someone from the poorer cohort, who is 2% more likely to die than someone with $140k in extra cash and you gave them $140,000, they would still be 2% more likely to die than the people who started with that money.

Put another way, the reason that richer people live longer is not because of what they can afford. It’s not because of better health care, private doctors, fancy food, safer cars, bigger houses, or longer vacations. If it was [sic], then the people who win the money could buy those things too and get all the same benefits.

This result cuts against most of the popular and academic theories for why the correlation between wealth and mortality exists. In particular, it discredits theories which put the ability of the rich to afford healthcare front-and-center in their explanations for why the rich live longer. It’s not true that poor people would have the same health outcomes as rich people if only they had the same resources.

And:

In a previous post I covered three high-sample randomized control trials that also test the causal effect of income on a slew of possible outcomes (the fourth RCT was about the minimum wage).

The first trial relieved $169 million dollars of medical debt for a randomly selected group of 83,401 Americans over two years from 2018-2020. They find precise null effects on a range of economic outcomes like credit access, utilization, and financial distress. They find mostly no effect and a few determinantal effects on mental health and stress.

The second trial tests a UBI of $1000 a month over three years with a sample size of 1,000 treated participants and 2,000 controls in the United States. They find precise null effects on health, career prospects, and investments in education. After the first year even measures closely connected to income like food insecurity didn’t differ between the treated and control group.

The final RCT on the effect of income is the Denver Basic Income Project which also tested a UBI of $1000 a month but enrolled only homeless people and did not find any statistically distinguishable impact of the extra money on homelessness rates.

The Billionaire Who Wired San Francisco.

By Lauren Smiley, New Yorker, May something, 2026.

Excerpt:

Larsen called a private camera company and paid to post networked cameras on the homes of willing neighbors. He toured a web of cameras already operating in the Union Square shopping district, run by a nonprofit that used special fees levied on area property owners to fund street cleaning and safety upgrades. To him, the system struck a balance between safety and privacy: The cameras took no audio recordings and used no facial recognition but were networked so they could follow suspects as they moved through city blocks. The footage was high definition and time-stamped, ready to hold up in court.

And:

Still, Larsen’s views on policing and privacy frequently resist easy classification. He will often point to the dangers of overzealous policing. “The U.S. has a habit of swinging from one extreme to the other,” Larsen said at a press conference last year — from tough-on-crime measures like three-strikes laws to “defund the police.” In lieu of jail time, some suspects whose arrests were coordinated by RTIC have been ordered into court diversion programs, which, as it turns out, Larsen also helped pay for.

The way he sees it, RTIC actually represents a continuation of his long-standing interest in weighing privacy and safety. Last year, Larsen spoke with Barry Friedman, an NYU law professor who advocates for legislative authorization of and guardrails on police surveillance. (Friedman wrote me that while he spoke to Larsen, “I have not expressed any view about the propriety of what is happening in San Francisco.”) “Police can easily go too far,” Larsen says, “and you can have the safest city in the world but everybody feels violated.” He views the omnipresent CCTV systems in New York and London as overreach — China’s, obviously so — and he doesn’t like any practice that has the whiff of profiling. “Hey, if we want to just end all crime, that’s pretty easy to do. That’s why I question what really goes on in Singapore, right? To be that good, what really has to happen?” He turns back to home: “I think San Francisco has the best, because we are” — he smirks — “the privacy groups are incredibly, you know, active.”

And:

Larsen said he supports higher taxes on the rich federally, but doing it just in California will make more of his billionaire cohort bail. (They don’t expect the January 1, 2026, residency deadline to hold up in court.) With the AI industry here and IPOs on the way, “it’s like the entire world is sending a check to California. We’re taxing at 13 percent, and that’s going right into our general fund,” he told me. “Let’s not kill the golden goose at a moment when it’s about to deliver, like, hundreds of golden eggs.”

DRH comment:

There’s so much I like about this guy, plus one big thing I dislike: his push to regulate AI. The main thing I like is probably obvious: his willingness to use his own wealth to improve things for others. Yes, there’s a danger of oversurveillance, but I like the fact that it’s funded by a wealthy guy and not a government. Also, this adds evidence to my claim that rich people often do good for society in ways that government wouldn’t do if it forcibly took their money.

Learning to “Code.”

By Adam Smith, James G. Martin Center, May 22, 2026.

Excerpt:

By “learn to code,” I certainly don’t mean we need to bring a bunch of new apps and devices into our classrooms to “upgrade our pedagogy.” That’s a lot of what broke us. We can talk about the demographic cliff and administrative bloat, but all that could go away tomorrow, and the deeper problem would still be there. I’m talking about the problem with the students. A few years ago, we read about “the elite college kids who can’t read books.” A few months ago, it was “the film students who can no longer sit through films.” It’s reasonable to be skeptical of trend-spotting pieces about “the kids these days,” but the kids in my classes really can’t read books, and they really can’t sit through movies, and every professor I know says the same about their own students. The simple truth is that their attention spans have been wrecked, and they’re no longer capable of receiving what we faculty are currently capable of offering.

I noted yesterday that sometime after the second edition of The Concise Encyclopedia of Economics went online, Liberty Fund decided to pull down the first edition. I don’t have access to the articles from the first edition. The good news is that the combination of updated articles and improved articles in the second edition makes this loss much less than catastrophic. The bad news is that there is some number of articles in the old edition that, even though less good or less complete than the new articles, have some great virtues. My guess is that that number is between 10 and 25.

There’s further good news. I found the Alfred Kahn article on “Airline Deregulation” on the Wayback Machine. Here it is.

Airline Deregulation

by Alfred E. Kahn

About the Author

[An updated version of this article can be found at Airline Deregulation in the 2nd edition.]

The United States Airline Deregulation Act of 1978 was a dramatic event in the history of economic policy. It was the first thorough dismantling of a comprehensive system of government control since the Supreme Court declared the National Recovery Act unconstitutional in 1935. It also was part of a broader movement that, with varying degrees of thoroughness, transformed such industries as trucking, railroads, buses, cable television, stock exchange brokerage, oil and gas, telecommunications, financial markets, and even local electric and gas utilities.

Most disinterested observers agree that airline deregulation has been a success. The overwhelming majority of travelers have enjoyed the benefits that its proponents expected. Deregulation also has given rise to a number of problems, including congestion and a limited reemergence of monopoly power and, with it, the exploitation of a minority of customers. It would be a mistake, however, to regard these developments merely as failures of deregulation: in important measure they are manifestations of its success.

These problems drive home the lesson that the dismantling of comprehensive regulation should not be understood as synonymous with total government laissez-faire. The principal failures over the last fifteen years have been failures on the part of government to vigorously and imaginatively fulfill responsibilities that we, in deregulating the industry, never intended it to abdicate.

The Benefits of Deregulation

The two most important consequences of deregulation have been lower fares and higher productivity.

Fares. Between 1976 and 1990 average yields per passenger mile—the average of the fares that passengers actually paid—declined 30 percent in real, inflation-adjusted terms. Average yields were declining in the decades before deregulation as well, thanks largely to the introduction of jets and jumbo jets. The best estimates, however, are that deregulated fares have been 10 to 18 percent lower, on average, than they would have been under the previous regulatory formulas. The savings to travelers have been in the range of $5 billion to $10 billion per year.

The overwhelming majority of the traveling public has enjoyed these lower fares. In 1990, according to the Air Transport Association, 91 percent of all passenger miles traveled were on discount tickets, at an average discount of 65 percent from the posted coach fare. The benefits of the price competition unleashed by deregulation, however, have been unevenly distributed among travelers. That is because the intensity of competition varies from one market to another. Prices per mile are usually much higher on thinly traveled than on densely traveled routes. They also are higher for the minority of travelers who have to pay full coach fares because they are unwilling or unable to meet the typical conditions for discounts (advance purchase, nonrefundability, and staying over a weekend).

These differentials are not necessarily discriminatory. It genuinely costs more per passenger to provide service on thinner routes, largely because a seat-mile on small planes costs much more than on large planes. Short flights also cost more per mile than long ones. Similarly, it is costly to provide the frequent service preferred by business travelers.

Evidence accumulates, however, that full fares on routes served by only one or two airlines, particularly on flights originating or terminating at a so-called hub city dominated by a single airline, reflect some substantial amount of monopoly power. The Department of Transportation found in 1990, for example, that after adjusting for differences in the average length of trip and density of traffic, fares on routes served by the eight most concentrated hubs averaged 18.7 percent higher than for similar markets served by other airports.

Productivity. The other major accomplishment of deregulation has been the improvement in airline productivity. Deregulation fostered this improvement by removing the previous detailed restrictions on airline prices and on where they can fly. Decontrol of prices allowed airlines to fill their planes by offering large numbers of heavily discounted fares for seats that would otherwise go unused. Decontrol of routes permitted them to plan their operations as they see fit. And deregulation has compelled improvements in efficiency through the intense pressures of the price competition it unleashed. Carriers have put more seats on their planes—the average went up from 136.9 in 1977 to 153.1 in 1988—and succeeded in filling a greater percentage of those seats—from an average of 52.6 percent in the ten years before 1978 to 61.0 percent in the twelve years after.

The dramatic move to hub-and-spoke operations (in which an airline routes its flights through one or several “hub” cities) has increased efficiency in a number of ways. It has allowed better adaptation of equipment to markets: small props and jet props for short hops and few passengers; big jets for dense, long-haul routes. It has also allowed the use of larger and more efficient planes, and the offer of a wider variety of destinations—albeit at the cost of a slight increase (estimated around 5 percent on average) in the circuity of routes. The industry’s failure to realize the huge potential economies of hub-and-spoke operations under regulation is compelling evidence of the inefficiency of centralized government planning and the superiority of free competitive markets.

Tendencies to Increased Concentration and Price Discrimination

The recent wave of mergers and airline failures has made the industry more concentrated at the national level than it was before deregulation. The trend continues or threatens to do so, with the failure of Eastern Airlines, Midway, and Pan American, and the bankruptcy of carriers such as Continental, America West, and TWA. Most hubs will support only a single airline, and the superior efficiency of hubbing tends to insulate an airline from direct competition on short trips originating or terminating at its hub. All of this means that pricing may well become less competitive in the future.

On average and in the aggregate, however, it has not happened yet. That is mainly because concentration at the national level is not as important as concentration on individual routes. What passengers care about are the choices available to them between two particular points. By its detailed and pervasive restrictions on the routes that carriers could serve, regulation had substantially insulated each airline from the competition of the others. By wiping out all these restrictions and freeing carriers to enter any market, deregulation produced an estimated 25 percent increase in the average number of airlines per route despite the recent mergers.

For example, between 1979 and 1988 American Airlines increased the number of domestic airports it served from 50 to 173, and United Airlines from 80 to 169, both without major benefit of mergers. As of February 1992 a traveler between Boston and Phoenix could choose among six airlines; in 1977 there were only two. Again, back in 1979 only 27 percent of all passengers traveled on routes served by three or more competitors; by 1988 more than 55 percent enjoyed that kind of choice.

In this as in all other unregulated industries, there is always the possibility of anti-competitive behavior. That is why we have antitrust laws. The reconcentration of the industry reflects, in part, the failure of the Department of Transportation to disallow even one merger of direct competitors. Also, some of the largest airlines have, at least in the past, used their computerized reservations systems to handicap their smaller competitors. Frequent-flyer programs, operating agreements and mergers with regional feeder airlines, and deeply discounted discriminatory fares have all put smaller competitors at a severe disadvantage and contributed to the demise of many of them. Like the hub-and-spoke system itself, these practices also have large efficiency advantages and so pose a familiar dilemma to scholars and practitioners of antitrust. Moreover, these potentially anti-competitive stratagems were scarcer before deregulation because they were unnecessary. Under that regime the government forced the airlines to operate as an effective cartel.

The instances of sharply increased price discrimination that deregulation has made possible are both a competitive and monopolistic phenomenon. They reflect intense competition for the travelers most likely to be attracted by price differences among competitors. They also have promoted economic efficiency in very important ways. The deeply discounted fares to discretionary air travelers have helped fill planes and, by doing so, helped make possible more frequent scheduling, which is particularly valuable to the full-fare travelers.

Still, the discrimination also reflects the exercise of monopoly power, no longer curbed by direct price regulation. The increasing sophistication with which the leading carriers practice what the industry euphemistically calls “yield management” enables them to take full advantage of that monopoly power, particularly in the unrestricted full fares paid by about 10 percent of the travelers. The continuing reconcentration of the industry threatens to extend that exploitation to an increasing proportion of the flying public in the future.

There are three possible ways in which government might respond to this dilemma. First, it could do nothing. After all, we put up with a great deal of competitive imperfection in industries that we would not think of regulating—very high profits on razor blades, discriminatory pricing by railroads and doctors, and automobile prices that go up when demand goes down. The high, unrestricted fares paid by the minority of passengers who cannot qualify for discounts may well be compensated for by frequent-flyer credits and by the improved convenience of schedules that the high fares and hubbing help make possible. The airline industry is far more competitive than it was; the benefits of that competition have been widely distributed; and industry profits have been lower, on average, since deregulation. In these circumstances it would be reasonable to conclude that no remedy was required.

Second, the government could actively attempt to make markets more competitive by assuming responsibilities that it has neglected. It could vigorously enforce the antitrust laws. It could also remove barriers to competition by expanding airport capacity enough to allow new competitors to operate on routes, by dissolving preferential arrangements between hub-dominating carriers and their hub airports, and above all, by allowing foreign airlines to compete for domestic traffic, either directly or by investing in American carriers.

Third, where restoration of more effective competition proves infeasible, price ceilings could be reimposed to protect travelers subject to monopolistic exploitation.

My own strong preference—with which most economists would probably agree—is for the second approach. Once introduced, price controls have an almost irresistible tendency to breed further controls (see Price Controls). Because airlines could adjust to price ceilings by reducing quality, price ceilings would have to be accompanied by regulations imposing minimum quality standards. It takes no imagination to see where that might lead: to prohibitions of reductions in frequent-flyer benefits, in scheduling, or in the frequency with which full-fare-paying customers are upgraded to first class, and to stipulations about the minimum quality of meals and maximum charges for headsets. These examples are not fanciful. All of them were adopted under regulation, in mirror image, to prevent competitive evasions of governmentally set price floors.

In any event it would be thoroughly irrational to restore regulation as it was practiced between 1938 and 1978. It would make no sense to respond to the limited reemergence of monopoly by reimposing a regime under which the government thoroughly and systematically suppressed all price competition.

Safety in the Skies

Air travel is unequivocally safer now than it was before deregulation. Accident rates during the twelve-year period from 1979 to 1990 were 20 to 45 percent (depending on the specific measures used) below their average levels in the six or twelve years before deregulation. Moreover, by taking intercity travelers out of cars, the low airfares made possible by deregulation have saved many more lives than the total number lost annually in air crashes.

Of course, the margin of safety may have narrowed. The skies have become more crowded and airlines may, under pressure of competition, have cut corners. If so, the proper remedy is not economic regulation, but more spending on policing safety, air traffic control, and airports.

The Quality of Service

The question of what has happened to the quality of service is more complicated.

First, service for small towns and rural communities has improved. They have, on average, experienced a 35 to 40 percent increase in the number of scheduled departures and, thanks to hub-and-spoke operations, have an increased number of destinations available to them. On the other hand, the planes serving them are, on average, smaller and less comfortable. Critics of deregulation note that 95 towns, net, lost uncertificated (that is, unregulated) service between February 1978 and February 1991. That is true. But 137 towns suffered a similar fate during the last decade of regulation.

Second, travelers have endured an undeniable increase in congestion, delays, and discomfort. But these are not, in themselves, a sign of failure. After deregulation, low-cost, aggressively competing airlines, such as People Express, offered the public low fares, with correspondingly lower-cost service—narrower seating, longer lines, and fewer amenities. The incumbents responded with very deep discounts, accompanied by similarly poorer service. The enormous response of travelers to the availability of these new options is a vindication of deregulation, not a condemnation, even though the quality of the air travel experience has deteriorated as a result.

Third, much of the congestion is the result of the failure of governments to do their job. When the demand for any service exceeds the available supply, it means two things. First, the service is probably being produced in inadequate quantity. Second, it is underpriced.

As for the supply side, the airline industry relies primarily on the federal government to provide sufficient air traffic control and on federal and local authorities for airports. The governments have not fulfilled those responsibilities. As for the demand side, the spectacle of airplanes filled with passengers, queued up on runways for an hour or more, proves that the price of access to airports and to the air traffic control system at those times and places is too low.

Most airports charge landing fees based primarily on the weight of the aircraft. The charge for landing at Washington National Airport, for example, is $1.34 per thousand pounds, with a minimum fee of $8.00. Thus, a small plane would pay only $8.00 while a Boeing 707 would pay under $300. With prices that low for access to some of the most precious real estate in the world, no wonder demand outruns supply. Highly congested airports might properly charge thousands of dollars for landings at peak hours, whether the planes are large or small. The consequence would be that travelers who place a high value on taking off and landing at peak times and on using convenient airports would pay higher fares in exchange for shorter delays. Travelers who value money more than convenience could be offered bargains to travel off-peak or to use uncrowded feeder airports.

Conclusion

Airline deregulation has worked. It would be ironic if, by misdiagnosing our present discontents, we were to return to policies of protectionism and centralized planning at the very time when countries as dissimilar as China, the Soviet Union, Chile, Australia, France, Spain, and Poland are all discovering the superiority of the free market.

About the Author

Alfred E. Kahn is the Robert Julius Thorne Professor of Political Economy, Emeritus, at Cornell University. He was formerly an economic adviser to President Carter and chairman of the Civil Aeronautics Board. He wishes to thank Melanie Mauldin for her assistance.

Further Reading

Kahn, A. E. “Surprises of Airline Deregulation.” American Economic Review, Papers and Proceedings 78, no. 2 (May 1988): 316-22.

McKenzie, Richard B. Airline Deregulation and Air-Travel Safety: The American Experience. July 1991.

Morrison, Steven A., and Clifford Winston. “Airline Deregulation and Public Policy.” Science, August 1989, 707-11.

Transportation Research Board, National Research Council. Winds of Change, Domestic Air Transport Since Deregulation. Special report 230. 1991.

U.S. Department of Transportation. Report of the Secretary’s Task Force on Competition in the U.S. Domestic Airline Industry. February 1990.

Note to readers: You may notice that Fred Kahn writes some things that I don’t agree with, such as his recommendation of antitrust. Keep in mind that I saw my job as editor to be commissioning and editing high-quality articles but not to have my voice substitute for the voice of the author.

Rarely do I cite a non-economist explaining a subtle economic concept clearly. But in a May 7 letter to the Wall Street Journal, Ben Hirst, a former executive vice-president of Delta Airlines, explained airline pricing beautifully.

He was addressing the view that because Spirit Airlines had lower costs, it should have been able to use lower fares to compete effectively. On the surface, that seems reasonable. But here’s Hirst’s explanation of why it’s not:

On any route involving a hub city of a major airline, the major airline’s network will support more flights (and therefore more possible connection options) than the low-cost carrier, which relies on point-to-point traffic. This product advantage, among others, generally allows the major airlines to charge and receive higher ticket prices than the low-cost carriers.

The revenue from these premium tickets will normally cover the cost of a network carrier’s flight before all the seats are sold. This means the remaining seats can be sold profitably at any price necessary to fill them. Unless travel demand is so high, or industry capacity so low, that major airlines can fill their planes at premium prices, it will generally make economic sense for them to match any price that a low-cost carrier offers if doing so is necessary to fill a seat.

In his last paragraph, he noted that he had been on the staff of the now-defunct Civil Aeronautics Board when the “architects of deregulation, Michael Levine and Alfred Kahn,” were deregulating. He also pointed out that both Levine and Kahn were not so arrogant as to know what form airline competition would take but were confident that competition in that industry would work. Unfortunately, he noted, “the Biden administration’s antitrust enforcers and Judge William Young prevented Spirit Airlines and JetBlue from helping airline competition continue to evolve.”

Here’s my obit of Fred Kahn. Unfortunately, the link to his article in the first edition of my Concise Encyclopedia of Economics takes you to an entry in the second edition. Liberty Fund deleted Kahn’s article, which is a pity.

The World’s Most Surprising Capitalist Makeover Is Under Way in Sweden.

By Tom Fairless, Wall Street Journal, May 11, 2026.

Excerpt:

For decades, Sweden was shorthand for the brand of high-tax, high-spend government that managed people’s lives from cradle to grave through state-run hospitals, schools and care homes.

No longer. With little fanfare, this Nordic country of 11 million has embraced capitalism.

Today, nearly half of primary healthcare clinics are privately owned, many by private-equity firms. One in three public high schools is privately run, up from 20% in 2011. School operators are listed on the stock exchange.

DRH comment: A graph in the article shows that government expenditure in Sweden fell from 69.3% of GDP in 1993 to 49.4% in 2024. Compare that to 37.9% for the United States and 57.2% for France.

Is France poorer than America? You don’t have to ‘walk around’ to know.

By Megan McArlde, Washington Post, May 17, 2026.

Excerpt:

In 2024, France had a per capita GDP of $46,103. Mississippi’s was$55,876. As recently as 10 years ago, French GDP was ahead ($37,024 versus $36,184), but since then U.S. GDP and productivity have grown significantly faster than Western Europe’s. This fact has caused much social media friction between smug Americans and defensive Europeans (allied with American progressives) who argue that you can’t measure what makes their way of life better.

And:

The European endowment of beautiful architecture feels much richer than American acreage when you’re, well, walking around. That effect is magnified by lower crime and public disorder in Europe. But when you drive out to where the highways and modern houses are, you often find European places just as mundane as American exurbs, and considerably more cramped. French homes average slightly under 1,076 square feet, while the average U.S. home is around 1,800 square feet and has energy-intensive amenities that most European homes lack, such as air conditioning and tumble dryers. Prosaic developments optimized for space and comfort rather than beauty might not scream “wealth,” but it’s pretty luxurious to ride out a heat wave in a 2,000-square-foot home chilled to 68 degrees.

Samurai vs. Squatters: On the Street With the Hired Swords Reclaiming California Property Owners’ Stolen Homes.

By Christian Britschgi, Reason, May 18, 2026.

Excerpt:

James Jacobs had hired a motley crew of toughs online to help him clear squatters out of an Oakland, California, apartment building. None of the hired muscle accept the offer of smoke grenades. They intend to complete this job with the baseball bats and firearms they brought from home.

“All right, let’s do this,” says Jacobs. He grabs his katana and sets off in his long black leather jacket toward the apartment. His improvised militia follows single-file behind him. Half a minute later, they confidently walk through the front door of a two-story building off of Oakland’s busy International Boulevard.

From across the street, I watch them enter and wait anxiously for the sound of gunshots.

It was another battle in California’s low-burning turf war between the squatters who invade homes and the enforcers hired to reclaim them.

DRH comment: This article is VERY long. I got through only about half of it. But I recommend reading more than I quoted above to get a real feel for how messed up the law in California is.

Justice Department announces nearly $1.8B fund to compensate Trump allies in a deal to drop IRS suit.

By Fatima Hussein, Eric Tucker, and Alanna Durkin Richer, Associated Press, May 18, 2026

Excerpt:

The Trump administration announced Monday the creation of a nearly $1.8 billion fund to compensate allies of the Republican president who believe they have been unjustly investigated and prosecuted, an arrangement that Democrats and government watchdogs derided as “corrupt” and unconstitutional.

The “Anti-Weaponization Fund” of $1.776 billion is part of a settlement that resolves President Donald Trump’s lawsuit against the Internal Revenue Service over the leak of his tax returns. It will allow people who believe they were targeted for prosecution for political purposes, including by the Biden administration Justice Department, to apply for payouts, creating what acting Attorney General Todd Blanche called “a lawful process for victims of lawfare and weaponization to be heard and seek redress.”

DRH comment: Trump hits a new low. As Jeff Singer said on Facebook:

So let me get this straight: Donald Trump sues his own IRS, and before a judge even sees the case, Trump’s lawyers and Trump’s IRS lawyers strike a deal creating a $1.776 billion taxpayer-funded settlement fund that Trump himself will oversee—deciding who deserves compensation for supposedly being “weaponized” by the justice system. The agreement also bars the IRS from ever investigating Trump, his businesses, or his family again. Then they tell the court the case was settled before it was even filed, so the judge has no jurisdiction. Corruption on a scale “we’ve never seen before!” 4-D level corruption.

I’ve just returned from a 2.5 hour presentation by Dick Rutan, the man who, with Jeana Yeager, flew the first non-stop non-refueled flight around the world. They did so in December 1986. It was an amazing show that I recommend to anyone who is fascinated with people taking risks and putting it on the line to do amazing things. Very inspiring.

I remember well the day they landed. We turned on the TV to watch it. He and Jeana got out of the plane, sat there a while, and stretched. My wife commented, “Where are all the government officials to take them away the way they always do?” I said, “Rena, this is a privately funded, non-government enterprise.” She was amazed. I remember the feeling of wonder that day. It reminded me of the excitement when I read the section of Atlas Shrugged on the first test of a train on a track made of Rearden Metal. I was inspired to write about it and compare it to the Rearden Metal train ride. I submitted it to National Review as one of the short unsigned items in the front of the magazine. (I had been the economics editor for the previous five months and, despite their warning that they would probably publish only half of the items I wrote, they had published everything.) I knew it was a risk, given NR’s attitude to Rand. But damn it, it was a risk worth taking. That’s how inspired I felt. They didn’t publish this one. Guess whom Buckley wrote to fire a month later.

Rutan would occasionally light in to the government for slowing down progress. Some good lines follow:

On the White Knight, his and his brother Burt’s later successful attempt to win the X prize:

“This had nothing to do with your tax money and the incompetent organization called Naysay.”

He thought of Shakespeare’s line when he was dealing with a government official trying to throw roadblocks in the way of their goal of space travel (this is the quote verbatim, although I was unable to find it on the web):

“Pardon me, sir, but I must leave lest I soil my hands with the blood of a fool.”

On the Shuttle, he asked us to guess what percent of the weight is the payload. I yelled out “2 percent” and other people guessed bigger numbers. He pointed at me and said:

“He’s right. 2 percent of the Scuttle weight is payload.”

On a federal official who got involved when they did the White Knight:

“There was one guy whose only job was to make sure there wasn’t a desert tortoise that could get hurt.”

And finally:

“The greatest challenge to getting things done is our damn government.”

I’m posting today what would have been my Monday post because I have to get up before dawn on Monday to drive to an all-day conference at Hoover.

A little over a year ago, I made a bet with my good friend and co-author Charley Hooper and announced it on this site.

Here was the bet:

If on May 15, 2026, the overall tariff rate on imports from Canada, Mexico, or China is 10% or less, I, David R. Henderson, will pay Charles L. Hooper $100. Otherwise, Charles will pay David $100.

Except I got the amount wrong. As Charley reminded me, I had agreed to bet $300. He won.

I bet on political and economic issues for four main reasons.

The first is to teach something to the other person who’s betting. People often make extravagant claims and I like to put them on the spot to put their money where their mouths are. Charley is not that kind of person. He thinks hard about things. But at the time, I thought that Trump was so out of control that my side of the bet had better than 50/50 odds.

The second is to put myself on the spot. What do I really believe? Betting is a way of keeping myself honest.

The third, which applies sometimes and not others but did apply here, is to diversify risk. I knew that I would probably pay well over $1,000 if the tariffs were above 10%. So at least I would get $300 back.

The fourth is that it’s fun.

I’ve noticed that my former co-blogger Bryan Caplan, who has won almost all of his over 20 bets, wins for one or both of two reasons: (1) the person he’s betting against is unduly pessimistic or (2) the person he’s betting against assumes that the world will change more quickly than it usually does.

In this bet with Charley, I turned out to be unduly pessimistic. But I have actually done well by betting on the pessimistic side. It looks as if I’ll easily win my bet with Mike Gibbs about the FY2026 federal budget deficit. Even Mike tells me that he thinks now that I will win. (Indeed, he invited me over to pay me. If he wins, I will owe him $200.) I also won a bet against Charley on the number of U.S. deaths from Covid-19 and that was an easy win. He had bet that it would be under 100,000 and the number came in much closer to 1 million. Even at the time, if Charley had insisted, I would have bet that it would be over 200,000.

I’m not sure there’s a lesson here. Betting optimistically isn’t always the right move. And betting pessimistically isn’t either.

Postscript: Here’s Charley’s Substack post about the bet.

Why Postliberalism Failed.

By Catharine Ruth Pakaluk, Religion and Liberty Online, May 14, 2026.

Excerpts:

Pilkington held court. His paper argued that forty years of “neoliberal” economic orthodoxy—deregulation, free trade, the erosion of unions—had hollowed out the Western middle class and rotted its moral fiber. Some of his instincts struck me as sound: yes, elites had grown detached; yes, communities were fraying. But his framework was troubling. His training in economics was thin, and it showed—not in his diagnosis of symptoms, which was often vivid, but in his inability to distinguish a market failure from a policy failure, or a structural trend from a moral choice. Economics as a discipline was not being critiqued. It was being indicted.

I discovered that afternoon that I was, in the eyes of the room, both a neo-conservative and a neo-liberal—and that both were terms of contempt. I had never heard the word “neo-liberal” used this way. I did not think of myself as a neo-conservative, either, though I had learned from men so labeled, such as Richard John Neuhaus. At one point, growing worried about his interventionist prescriptions, I asked Pilkington a basic question: “Where do prices come from?” Annoyed, he waved me off. Later, I suggested that some of his claims could be tested—that we could do studies. One American academic, who today works in Hungary, sneered: “How many more studies do we need?” The room murmured its assent. I saw then that something was afoot that I had not encountered before. It was not that these conservatives had reached different conclusions than I had. It was that the enterprise of reaching conclusions—of fixing claims to evidence, of reasoning from principles of human action to testable propositions—was itself under suspicion.

And:

The postliberals claim to be classical—to stand in the tradition of Aristotle and Thomas Aquinas, of natural law and the common good. But they reject what is perhaps the most fundamental tenet of classical political philosophy: that the family and civil society are prior to the political order. For Aristotle, the household comes first. The village comes next. The polis emerges to serve these natural communities, not to constitute them. For Aquinas, the same principle holds, deepened later by the Leonine doctrine of subsidiarity—that what can be accomplished by smaller and lower communities should not be absorbed by larger and higher ones. The political order exists for the sake of human life well lived, and a good life begins in the family, not in the state.

The postliberals have inverted this. For them, the political is primary. The state is the great instrument—the lever by which a fallen civilization will be righted. They speak of “regime change” without irony, of capturing bureaucracies and redirecting them toward a theological vision of the good. They imagine that if the right people held the right offices, the right culture would follow. This is not a recovery of classical thought. It is a betrayal. It is, in fact, a form of the very liberal constructivism they claim to oppose—the belief that the right design can produce the right decision.

And:

Where does this leave us? The postliberal moment is not over, but its intellectual peak has passed. What remains is the political residue—figures in positions of influence who absorbed the rhetoric without ever interrogating the history, and a generation of young Catholics who were promised a heroic counter-narrative and given a graduate seminar in resentment. The real danger now is not that postliberalism will succeed but that its failure will discredit the legitimate concerns that gave it an audience: the fraying of communities, the loss of dignified work, and the sense that the nation’s institutions no longer serve its people.

Marty Makary’s Irrational Resistance to Flavored Nicotine Vapes Drove His FDA Resignation.

By Jacob Sullum, Reason, May 12, 2026.

Excerpts:

A week ago, the Food and Drug Administration (FDA) approved the marketing of electronic nicotine delivery systems (ENDS) made by Glas, a Los Angeles company that specializes in devices that incorporate age verification technology. “The authorized pods include Classic Menthol, Fresh Menthol, Gold, and Sapphire,” the FDA noted. “This action marks the FDA’s first authorization of non-tobacco and non-menthol ENDS products.”

That decision was significant because the FDA had previously frowned upon nicotine vaping products in flavors other than tobacco and menthol, viewing them as dangerously appealing to minors. It was also too much for FDA Commissioner Marty Makary, who resigned on Tuesday, reportedly because he disapproved of the policy shift.

And:

Whatever those students might have been saying, that statement was hard to reconcile with data from the National Youth Tobacco Survey (NYTS). In the 2024 NYTS, 7.8 percent of high school students reported that they had used e-cigarettes during the previous 30 days. Yet Makary implied that 50 percent of students at certain high schools are “addicted to these vaping products,” which is more than six times the nationwide prevalence of past-month use in the 2024 NYTS and about 22 times the rate of daily use (assuming 30 percent of past-month users were daily users, as in the 2023 survey).

Contrary to the impression that Makary left, underage vaping has fallen sharply in recent years. The prevalence of past-month use among high school students in 2024 was down from 10 percent in 2023 and about 72 percent lower than the peak of 27.5 percent recorded in 2019. The rate fell again last year, from 7.8 percent to 5.2 percent.

And:

During his Senate testimony, by contrast, Makary did not even acknowledge vaping’s promise as an alternative to smoking, let alone the tension between the goals that the FDA later tried to reconcile by greenlighting Glas. His obliviousness to such tradeoffs made him ill-suited for the job of deciding which nicotine products adults are allowed to consume, even if you take it for granted that federal bureaucrats should be making such decisions in the first place.

Friday Feature: Start Bright Learning Center.

By Colleen Hroncich, Cato at Liberty, May 15, 2026.

Excerpts:

When Valeria Oquendo—known to her students simply as Miss V—finished her education degree in Florida, her plan was to become a public school teacher. But during her internship, she realized that wasn’t the future she wanted. “I didn’t like what I was seeing in the classroom, and I wasn’t happy with all of that,” she says.

She quit the internship, turned her van into a mobile classroom, and started tutoring kids who were struggling. She’d meet families at parks, community centers, and even the grocery store parking lot. Kids were grouped into pods of three, and she could serve nine children a day.

The parents saw how well their kids were doing academically and emotionally. They began withdrawing them from school and asking Valeria to homeschool them. “They were basically creating the business for me. I didn’t even realize that at the moment,” she recalls. She learned about microschooling and realized that’s what she wanted to do, so she began offering classes for homeschoolers.

And:

The families Valeria serves would not be able to access the program without Florida’s school choice programs. Every Start Bright family uses a scholarship to pay tuition. Before Valeria knew the scholarships existed, parents were paying out of pocket, and she was undercharging because she didn’t know what to ask. Other microschool founders had to tell her. The scholarships enabled her to set sustainable rates without, as she puts it, hurting families’ pockets.

How a UN Agency Misled the World on Cancer Risk.

By Geoffrey C. Kabat, Quillette, May 17, 2026.

Excerpts:

The International Agency for Research on Cancer (IARC) based in Lyon, France, is a highly regarded branch of the World Health Organisation. Its assessments and classifications of carcinogens are designed to alert the public as well as the cancer researchers, for whom such announcements are supposedly intended. However, the agency’s determinations have been the subject of increased scrutiny in recent years, and some of its findings have caused great controversy:

In 2011, the IARC classified exposure to cell phones as “possibly carcinogenic to humans.”

In March, 2015, the IARC classified glyphosate (the active ingredient in Roundup weedkiller) as “probably carcinogenic.”

In October, 2015, the IARC classified red meat as “probably carcinogenic to humans” and processed meat as “carcinogenic to humans.”

And:

In the working group convened to evaluate cell phones, a highly qualified epidemiologist—who had conducted research on radiofrequency radiation—was dismissed from participation due to an alleged conflict of interest. Another epidemiologist—who had published research purporting to show an association of heavy cell-phone use with brain cancer, and who had testified in court cases on the question—was allowed to play a prominent role in the working group. Furthermore, the “possible carcinogen” determination was based primarily on what the working group itself considered “limited evidence” from two case-control studies, whereas data from a large prospective study, which showed no association, was ignored, along with extensive “ecologic” data from many countries showing no increase in brain-cancer rates in the two decades following the introduction of cell phones.

The IARC’s assessment of the herbicide glyphosate, published in March 2015, is even more problematic. Glyphosate has been in use since 1974, and it remains the most popular weedkiller worldwide. Twenty-two national and international health agencies have found it to be safe and not carcinogenic at the levels to which most people are exposed. The IARC’s determination is at odds with the findings of all of these other agencies. Furthermore, scrutiny of the IARC’s process in evaluating glyphosate has revealed improprieties, including statistical errors, selective editing, and conflicts-of-interest.

I learned this morning that economist Edmund Phelps died earlier this month. This is the biography I wrote of him in David R. Henderson, ed., The Concise Encyclopedia of Economics.

Edmund S. Phelps was awarded the 2006 Nobel Prize in economic science “for his analysis of intertemporal tradeoffs in macroeconomic policy.” He focused on two distinct areas of macroeconomics: the tradeoff between unemployment and inflation and capital accumulation and economic growth.

In the early 1960s, many economists believed that the tradeoff between unemployment and inflation was stable. (See phillips curve) Government policy makers, according to this view, could pick a combination of inflation and unemployment almost as if they were ordering from a menu.

In the late 1960s, however, Phelps challenged this view by going back to basics—that is, by considering how individual employees and employers act. He assumed that employees would act based on their expectations of future inflation. If they expected, say, 3% inflation, they would build this into their wage bargains.

But what if the Federal Reserve increased the money supply at a rate that caused a 5% inflation rate? Then, with this higher inflation rate, wages offered would be higher than expected also. Unemployed workers looking for work would see wages that they would mistakenly think were higher in real terms and would, therefore, accept jobs at these wages sooner than otherwise. Millions of unemployed workers taking jobs just a few weeks earlier would result in a lower unemployment rate. Then, however, workers’ expectations would be adaptive; that is, they would adjust to reality. They would realize that the wages weren’t as high in real terms as they had thought, and some would quit and look for more lucrative work, thus slowly raising the unemployment rate. In other words, policy makers could temporarily reduce the unemployment rate by making inflation higher than people expected, but they could not achieve a long-run reduction in unemployment with an increase in inflation. In the long run, then, there is no tradeoff between inflation and unemployment. This striking finding is now mainstream economic wisdom.

Phelps was not the first to point this out. 1976 Nobel laureate milton friedman had done so in his 1967 Presidential Address to the American Economic Association,1 as Phelps himself noted. And Phelps also credited Austrian economist ludwig von mises’ book The Theory of Money and Credit, first published in 1911. But Phelps gets the credit because—this is not his fault— academic economists now insist on formal models. Nor was Phelps the last to point out the “no tradeoff” result. 1995 Nobel laureate robert lucas introduced “rational expectations” rather than “adaptive expectations.” The idea is that people would try to anticipate the future based on how the monetary authorities had acted in similar circumstances in the past. With this approach, Lucas found even stronger results. Lucas’s model implied that the only way that policy makers could use monetary policy to affect the unemployment rate was by being unpredictable.

Phelps’s other major work acknowledged by the Swedish Academy was on capital accumulation and economic growth. In the early 1960s, he derived the “Golden Rule” of capital formation. The rule is that if one’s goal is to attain the maximum consumption per capita that is sustainable in the long run, annual saving as a percent of national income should equal capital’s income as a percent of national income. In the late 1960s, Phelps did further work in this area with Robert Pollak. They argued that the government should force people to save more than they wish, on the grounds that people put too little weight on their children’s well-being. It seems that the political system, though, does the opposite, especially at the federal level. The federal government taxes the politically powerless younger generation to subsidize—through Medicare and Social Security—today’s politically powerful elderly.

Edmund S. Phelps is difficult to categorize politically. On the one hand, he decries the lack of dynamism in Europe and wants European governments to deregulate their economies.2 On the other, he believes that low-end jobs do not pay enough and wants the government to subsidize such jobs. He understands that the minimum wage prices people out of labor markets, resulting in “idleness, deprivation, drugs and crime.” So, in his 1997 book, Rewarding Work: How to Restore Participation and Self-Support to Free Enterprise, he advocated a vast subsidy program that would have cost $125 billion in 1997 dollars, a substantial 1.5% of that year’s GDP.

Among Phelps’s other contributions, two stand out. The first is on dynamism and entrepreneurship. In Mass Flourishing: How Grassroots Innovation Creates Jobs, Challenge, and Change, Phelps argues that a competitive innovative economy is good, not just for consumers, as joseph schumpeter argued (see creative destruction), but also for workers and producers. In Phelps’s view, a dynamic competitive economy helps humans to flourish. Phelps worries that the U.S. economy has become as sclerotic and corporatist as European economies. What is needed for dynamism, he argues, is not just a good amount of economic freedom but also individualism.

The second is on population. In 1968, long before Julian Simon popularized the idea that population growth is good, Phelps made the same argument: The more people there are, the more ideas are developed, and ideas, once developed, can be transferred to others at almost no cost. He wrote: “One can hardly imagine, I think, how poor we would be today were it not for the rapid population growth of the past to which we owe the enormous number of technological advances enjoyed today. . . . If I could re-do the history of the world, halving population size each year from the beginning of time on some random basis, I would not do it for fear of losing Mozart in the process.”3

Edmund S. Phelps earned his B.A. from Amherst College in 1955, majoring in economics. He earned his Ph.D. in economics from Yale University in 1959, studying under future Nobel laureates James Tobin and Thomas Schelling. After graduating, he worked for the RAND Corporation for a year. He then taught at Yale (1960-1962), the Massachusetts Institute of Technology (1962-1963), Yale again (1963-1966), the University of Pennsylvania (1966-1971), New York University (1978-1979), and Columbia University (1971-Present), where he has been the Director of the Center on Capitalism and Society since 2001. He has also held positions in Europe, as a consultant for the European Bank for Reconstruction and Development (1992-1993), a Senior Advisor to the Consiglio delle Ricerche (1997-2000), and a Research Fellow at the Observatoire Français des Conjonctures Économiques (2001-Present).

About the Author

David R. Henderson is the editor of The Concise Encyclopedia of Economics. He is also an emeritus professor of economics with the Naval Postgraduate School and a research fellow with the Hoover Institution at Stanford University. He earned his Ph.D. in economics at UCLA.

Selected Works

1961. “The Golden Rule of Accumulation: A Fable for Growthmen.” The American Economic Review Vol. 51, No. 4 (Sep., 1961), pp. 638-643.

1966 (with Richard R. Nelson). “Investment in Humans, Technological Diffusion, and Economic Growth.” The American Economic Review Vol. 56, No. 2 (Mar., 1966), pp. 69-75.

1967. “Phillips Curves, Expectations of Inflation and Optimal Unemployment over Time.” Economica Vol. 34, No. 135 (Aug., 1967), pp. 254-281.

1968 (with Robert Pollak). “On Second-Best National Saving and Game-Equilibrium Growth.” The Review of Economic Studies Vol. 35, No. 2 (Apr., 1968), pp. 185-199.

1968. “Money-Wage Dynamics and Labor-Market Equilibrium.” Journal of Political Economy Vol. 76, No. 4, Part 2 (Jul. – Aug., 1968), pp. 678-711.

1979 (with Janusz Ordover). “On the Concept of Optimal Taxation in the Overlapping-Generations Model of Economic Growth.” The Journal of Public Economics Vol. 12, Iss. 1 (August 1979), pp. 1–26.

1979. “Justice in the Theory of Public Finance.” The Journal of Philosophy Vol. 76, No. 11 (Nov., 1979), pp. 677-692.

1997 (with Gylfi Zoega). “Persistent Unemployment: The Rise and Downward Trend of the Natural Rate.” The American Economic Review Vol. 87, No. 2 (May, 1997), pp. 283-289.

2013. Mass Flourishing: How Grassroots Innovation Creates Jobs, Challenge, and Change. Princeton, NJ: Princeton University Press.

Footnotes

1. Friedman, Milton. “The Role of Monetary Policy.” American Economic Review Vol. 58, No. 1 (Mar. 1968), pp. 1-17. http://www.aeaweb.org/aer/top20/58.1.1-17.pdf

2. See, for example, Phelps, Edmund S., “Capitalism vs. Corporatism”, Critical Review Vol. 21, No. 4, pp. 401-414.

3. Phelps, Edmund S. “Population Increase”, The Canadian Journal of Economics, Vol. 1, No. 3 (Aug., 1968), p. 512.

Elon Musk, Sam Altman of OpenAI, and some other major executives of artificial intelligence (AI) firms are sure that AI will destroy millions of American jobs and that many of those who lose work will not find gainful employment. Musk, Altman, and Marc Benioff, CEO of Salesforce, advocate a universal basic income (UBI) for those who they think will never find work. I’ve written elsewhere about the fact that a UBI, even one that replaced means-tested welfare programs, would enormously increase both government spending and our federal budget deficit.

There’s another problem, and it’s the one I focus on here. A large UBI would assure that millions of people will never work. As a result, we would miss the products and services that those people would have produced. One way to see that is to imagine that at various times in our history the federal government had implemented a UBI.

These are the opening two paragraphs of my latest Hoover article, “The Unseen Costs of a Universal Basic Income,” Defining Ideas, May 14, 2026.

And:

Imagine that we’re back in 1900. Approximately 40 percent of American workers work on farms. A visionary back then foresees the replacement of horses with tractors and the use of fertilizers and irrigation. Together those improvements in technology will multiply farm output and shrink farm employment. He foresees correctly that by 1980, only 3.4 percent of American workers will work on farms. That visionary also advocates a federal government program to give everyone enough money to live modestly without working. Such a proposal is now known as a universal basic income (UBI.) People don’t take him seriously. Very few people believe that the federal government should have any role in subsidizing people so that they don’t have to work.

But what if key politicians back then had taken him seriously and, in the next few years, had implemented a UBI?

Then many of the millions of people who lost jobs on the farm would not have become factory workers. Manufacturing employment replaced many jobs on the farm. In 1900, 11.1 million people were employed in US agriculture.; the total labor force then was 27.6 million. By 1980, that was down to 3.4 million, even though the labor force in 1980 was 99.3 million, which was 3.6 times as large as the labor force in 1900. With a UBI, there would still be millions of people leaving farm jobs and working in manufacturing. But there would also be millions who would not work. Think of the cars, trucks, televisions, automatic washers and dryers, and other valuable products we would not have. Fortunately, we dodged a bullet. We didn’t get a universal basic income.

And:

What if I’m wrong and AI does destroy, on net, a large percentage of jobs? What then? First, if that happened, productivity and, with it, real gross domestic product, would explode. That would then substantially reduce the federal budget deficit. Second, with the federal budget deficit falling to zero or even turning into a budget surplus, a UBI would be easier to finance, and we could do it then. But let’s not short-circuit the process and reduce economic growth by paying people who aren’t working. I’m humble about what we can know about the future of employment. Experts in AI, who know more than I do about AI—but less than I do about economics—should be similarly humble.

Read the whole thing.

In his May 12 Substack post titled, “What Happens When Americans Realize How Miserable We Are?” Paul Krugman makes the case that we are more miserable than we think. He writes:

What will happen when Americans realize how miserable we are? Not in all respects, of course. But my guess is that relatively few Americans realize how much we are falling behind other nations on basic aspects of a civilized life, like health and safety.

The first graph he uses to make his case is a comparison of deaths from road injuries. Deaths include deaths of drivers and passengers and deaths of motorcyclists, cyclists, and pedestrians. He compares the United States with Portugal and France.

His measure is deaths per 100,000 population.

I’ll say that again: His measure is deaths per 100,000 population.

Do you see a problem? I do. In which of the three countries are the miles driven per person highest? Think about how undense our population is and how low our gas taxes are, all compared to the numbers for Portugal and France, and you know the answer: Miles driven per person are much higher here; fatalities are highly positively correlated with miles driven.

But let’s make sure. In 2025, American vehicles traveled 3.28 trillion miles. In 2024, Portuguese vehicles traveled 79.7 billion kilometers, which is 49.5 billion miles. In 2024, French vehicles traveled 377.7 billion miles.

Let’s do the simple math on vehicle miles per person.

U.S. population in 2025: 341.8 million.

Portugal’s population in 2024: 10.75 million.

France’s population in 2024: 68.5 million.

So:

U.S. vehicle miles per person: 3.28 trillion divided by 341.8 million = 9,596.

Portugal’s vehicle miles per person: 49.5 billion divided by 10.75 million = 4,604.

France’s vehicle miles per person: 377.7 billion divided by 68.5 million = 5,514.

So the average U.S. vehicle travels 108% more than the average Portuguese vehicle and about 74% more than the average French vehicle.

What all that means, of course, is that the relevant comparison, deaths per miles traveled rather than per resident of the country, shows a much small difference among the three countries.

As a check, I asked ChatGPT to compare fatalities per million miles between the United States and Portugal. Here’s what it said.

Country

Fatalities per million vehicle miles

Source basis

United States

0.0126

2023

France

0.0085

2021–2023 average

Portugal

0.0134

2021–2023 average

United States vs. France

The U.S. rate was about 48% higher than France’s:

France’s reported rate was 5.3 deaths per billion vehicle-kilometres, which converts to 0.0085 per million vehicle miles.

United States vs. Portugal

Portugal’s rate was about 6% higher than the U.S. rate:

Portugal’s reported rate was 8.3 deaths per billion vehicle-kilometres, which converts to 0.0134 per million vehicle miles. The ETSC report notes that Portugal’s vehicle-distance figure excludes motorcycles, so this comparison is not perfectly clean; including motorcycle mileage would likely lower Portugal’s rate somewhat.

Now go to back to Krugman.

His graph shows the United States being about 200% more dangerous than France and over 100% more dangerous than Portugal. But norming by vehicle miles driven rather than population shows the United States being 48% more dangerous than France and comparable to Portugal.

Big difference.

Krugman made a living by carefully examining macroeconomic data and data on international trade. It’s too bad that didn’t use his analytic tools on this one.

The Secret Team Blowing Up Ford’s Assembly Line to Make a $30,000 Electric Truck.

By Sharon Terlep, Wall Street Journal, May 4, 2026 (May 6 print)

We can look at it as, ‘The Chinese are really far ahead, it’s really scary that they’re coming,’” Clarke said. “But, get off your ass and do something about it. Go figure out a way to compete.”

To do that, they need to solve a conundrum: Car-size batteries are expensive. To sell EVs at competitive prices and make them profitable, engineers need to cut costs everywhere else, from labor to parts.“

DRH comment: First, this is an outstanding job of reporting. Second, it reminds us economists of something we sometimes fail to say in defending free trade: One of the potentially biggest benefits of free trade or almost-free trade is that it spurs domestic firms to innovate. I wrote Ms. Terlep a letter thanking her for this and she was pleased to get it. Unfortunately, the article is available only to subscribers to the WSJ.

Ted Turner, Entrepreneur of His Age.

By Thomas W. Hazlett, Reason, May 10, 2026.

Excerpts:

The cartoon character he cultivated was for fun and to amortize the lithium load. His real role was Entrepreneur of His Age. Turner held the lead spear when the Late 20th Century Barbarians stormed the gates of the Old Order in American media. Meeting the moment at the perfect instant—when a “deregulation wave” was opening doors long shut—Turner flipped the script on “public interest” regulation concocted during the Progressive Era. Intellectuals largely bemoaned the passing of the administrative state, and the Cronkite audience it favored, devoid of controversy and offered as the “news from nowhere” (as a CBS executive bragged). But the closed-loop spoon feeding was inimical to freedom, open inquiry, and honest debate.

And:

A young Malcolm Gladwell ridiculed the upstart Turner in “Ted Turner’s Cable Scam,” a 1987 essay in The American Spectator. In Gladwell’s account, “Turner went to Congress in 1976, asking for special favors for his fledgling industry.” Gladwell deemed Turner a Svengali, selling naïve policy makers a bill of goods. “Over and over again,” he complained, “the regulatory and legislative bodies responsible for cable television’s direction have ratified Turner’s vision of cable as the salvation of television.” Gladwell thought it “incredible, in retrospect, that Turner was able to get away with this,” given that all the Mouth of the South brought to the table was a product of “technological breakthrough and really not much else.”

Just the reverse! The technologies being liberated had long been boxed in by regulation, and freeing them unleashed a new world. It began with satellite, which in 1962 was monopolized by COMSAT, a partnership between the private AT&T and the public U.S. government that had been given legal dominion over all space communications. Prices were high and innovation anemic until the Open Skies policy was implemented in 1975. Then rivals were legalized, and the purportedly “natural” monopoly was defunct. Hughes, GTE, RCA, Western Union, and other AT&T substitutes emerged. Transmission prices to distribute nationwide programming dropped 95 percent. This data transport opening made a national cable TV market possible.

And:

In 1970, cable TV service was essentially outlawed in 90 percent of American households. The powerful VHF stations, dominated by the NBC-CBS-ABC triopoly, ruled the world. Weak UHF stations were virtually worthless, given their stunted reception under FCC rules, though cable operators wanted to retransmit their signals to homes in crystal clarity.

Turner’s simple vision was to think of a world with such stupid rules gone. Then a nothingburger outlet in Charlotte could be delivered via cable, ending its “UHF discount.” Then a losing proposition like WTBS could bounce its product to 30,000 communities via satellite, produce its own popular programs, and compete head-to-head—against the choice set of My Mother the Car, Hello Larry, or SuperTrain—in households everywhere.

DRH comments:

First comment: I asked Tom about the “lithium load” phrase. He explained:

Turner often referenced his both casual and serious use of lithium. In some situations he claimed to take it to smooth out his bipolar disorder. Later in life he denied that affliction and claimed he had been hit by Lewy body demential, the malady that (it is now reported) appears to have killed him.

But this is how jocular of the subject often was - from The Google:

Ted Turner jokingly referenced taking lithium during his intense, decades-long rivalry with Rupert Murdoch, even suggesting in a hypothetical scenario that he could stop taking his medication to defeat his rival. [1]

According to a 2026 article in The New York Times, Turner once said during the peak of their competition: “I could get off my lithium, do away with Rupert, plead not guilty by virtue of insanity, get acquitted, and then get back on my meds”.

Second comment: In 1969, after attending a weeklong-long conference at Rockford College that was sponsored by the Intercollegiate Studies Institute, my mentor Clancy Smith and I hitchhiked and took buses from there to Philadelphia. We went on to New York. Clancy was always very observant. He pointed to the “Stop Pay TV” line on many movie marquees in the Midwest. He also noted the more sophisticated usage in New York: “Save free TV.”

How Much Has Shale Gas Saved U.S. Consumers?

By Lucas Davis, Energy Institute at Haas, May 11, 2026.

Excerpt:

The war in Iran has pushed up natural gas prices in most of the world. Liquefied natural gas (LNG) prices nearly doubled in the first half of March, and attacks on LNG infrastructure in Qatar and elsewhere squeezed prices even further.

U.S. natural gas prices, meanwhile, have barely budged. U.S. LNG export facilities were already running at near 100% capacity factor, so there is little scope in the short-run to increase exports. Consequently, U.S. natural gas prices have remained at about $3 per Mcf, about 1/6th of the price in Europe and Japan.

This is not the first time this has happened. Market data show that U.S. natural gas prices have been consistently well below natural gas prices elsewhere in the world for the last 20 years. Why? Shale gas.

And:

It may seem like a distant memory now, but back in the mid 2000s, U.S. natural gas production had been flat for a decade, and the U.S was importing LNG – not exporting it – and with plans to import much more. As of February 2007, there were four additional U.S. LNG import terminals under construction and another 10 U.S. LNG import terminalshad received approval from FERC.

Then shale gas happened. Advances in hydraulic fracturing and horizontal drilling opened up vast new areas to development and super-sized U.S. natural gas production. Since Daniel Yergin and Robert Ineson wrote about “America’s Natural Gas Revolution” in the Wall Street Journal in 2009, U.S. natural gas production has approximately doubled, driven overwhelmingly by shale gas.

Bottom line:

In the meantime, U.S. natural gas consumers have benefited mightily from cheap U.S. shale gas. According to the calculations in the paper, shale gas has saved U.S. natural gas consumers $4.5-$5.3 trillion since 2007, equivalent to savings of $237-$276 billion annually.

DRH comment: The author, who writes for a site that pushes the worry about global warming, somehow manages to avoid the work fracking.

The People vs. CEQA.

By Christian Britschgi, Reason, May 5, 2026.

Excerpt:

Simple though those requirements might sound, CEQA has become a vast, unpredictable area of law that can see a long list of projects, from housing to bike lanes to state college admission plans, bogged down in years of study and litigation.

The law has enabled a cynical shakedown racket whereby special interests with no real environmental objections to a project will threaten to delay it with CEQA litigation unless the sponsor provides some sought-after concession.

To reduce the burden of CEQA on building new things, the Chamber’s measure would create binding timelines for CEQA reviews and lawsuits for a broadly defined list of “essential projects” that includes housing, transportation infrastructure, water projects, energy projects, wildfire mitigation projects, and more.

Reviews would have to be completed within 365 days. Lawsuits would have to be decided within another 270 days.

A U.S. Citizen Is Suing ICE for Arresting Him Twice. He Just Got Arrested a Third Time.

By C.J. Ciaramella, Reason, May 12, 2026.

Excerpt:

An Alabama construction worker who is suing the Department of Homeland Security (DHS) after he was arrested twice last year, despite being a U.S. citizen, was shackled and detained by federal immigration officers for a third time earlier this month, according to court documents.

In a declaration filed in federal court, Leo Garcia Venegas said he was parking in front of his house in Silverhill, Alabama, on the morning of May 2 when an unmarked SUV blocked him in. Venegas claimed that before he could hand his Alabama-issued REAL ID to the two federal Immigration and Customs Enforcement (ICE) officers who approached him, they pulled him out of the truck he was driving and handcuffed him.

What makes the incident extraordinary is that Venegas is the lead plaintiff in a class-action lawsuit challenging DHS’ immigration enforcement policies, and it was the third time he’s been handcuffed and detained by ICE agents. Venegas was detained twice in 2025 during raids on private construction sites where he was working, even though he had a REAL ID identifying him as a U.S. citizen.

My wife and I watch Call the Midwife on PBS faithfully. The final episode for the season ran on Sunday. In it, Sister Monica Joan, who is close to death, has her undertaker wheel her through an outdoor fruit and vegetable market.

A seller named Mr. Morris is friendly to her and then she remembers him. He notes that the sisters had delivered all their babies and that she had delivered the first and the last. Sister Monica Joan, whose memory is like a steel trap, brightens up and recalls that the last one was a “footling breech.” Mr. Morris smiles and says, “My Mildred said afterwards, ‘Don’t you ever charge her for bananas again.’” He then hands her some bananas.

What a great illustration of consumer surplus. Sister Monica Joan performed a very valuable service that was clearly more valuable than the small amount, if any, that Mr. Morris and Mildred Morris had paid.

Economics is everywhere. You just have to pay attention.

As an American economist studying international trade and protectionism, Anne Krueger had her own method: she traveled to poorer countries to talk, not just to government officials, but also to businesspeople in those countries. She also often asked to see the businesses’ books, not just the books that they prepared for the government and the books they showed the public, but also the third set of books, which were the ones they used to operate their businesses. Krueger was quite successful at getting the businesses to cooperate.

As a result of her careful observations of the political economy of Turkey and India, she developed the concept of rent-seeking. She has been an outspoken advocate of multilateral trade negotiations and opponent of protectionism. She also defends the idea that increased globalization has been good for virtually everyone who has experienced it.

These are the first two paragraphs of my biography of Anne Krueger, recently published in David R. Henderson, ed., The Concise Encyclopedia of Economics. Writing this was a labor of love. I enjoyed going through her work, especially her recent book, International Trade: What Everyone Needs to Know. I also enjoyed, and learned a lot from, the two recent interviews that I quote extensively in the bio.

I used to think that her concept of rent-seeking owed a lot to Gordon Tullock, who had covered some of the same ground 7 years earlier. But writing this bio caused me to reread both her and Tullock’s articles more carefully. It’s funny how writing something causes one to do that. And I discovered a key difference:

Krueger’s focus on competition for import licenses implicitly points to a major difference between her thinking and that of Tullock. In Krueger’s model, each potential importer is willing to spend a lot to get a license. Therefore, much of the rent is competed away, causing a large efficiency loss. Tullock, though, did not consider competition for import licenses; he dealt with companies’ investments in obtaining tariffs. But because tariffs benefit all producers of an import-competing product, those firms that invest in tariffs are, essentially, investing in a public good that benefits other domestic firms in the industry. All firms, recognizing this, will underinvest in getting tariffs. Although economists generally treat underinvestment in public goods as a bad thing, in this case, it’s good because the public good to the firms is not the same as the public good to society; indeed, the public good to the firms consists of their gains from charging consumers more for their outputs.

Another highlight from the bio, on multilateral trade agreements:

Krueger has long been an advocate of multilateral trade agreements rather than of trade agreements between two countries. In International Trade: What Everyone Needs to Know, she pointed to the tremendous success that multilateral trade negotiations had led to after World War II. She wrote, “In the first (Geneva) round of MTNs [multilateral trade negotiations], the pre-agreement tariff rates before 1947 averaged 48 percent across the advanced countries. The rates as of the end of 1947 pre-Geneva had fallen to 32.2 percent, and the January 1, 1948, rates post-Geneva averaged 25.4 percent.” She also noted that after the Kennedy Round (1964-67), the Tokyo Round (1973-79), and the Uruguay Round (1986-94) of trade negotiations, each of which had brought tariffs down, the average tariff rate imposed by the United States was 3.1 percent, by the European Community was 2.9 percent, by Japan was 1.4 percent, and by Canada was 2.6 percent. These rates were on dutiable manufactured items. Because not all manufactured items were subject to tariffs, the average tariff rates for all manufactured items were even lower.

I also learned a lot from Krueger’s recent book about the fundamental disagreement between the U.S. government and foreign governments on the role of the World Trade Organization:

Krueger has been a strong supporter of the World Trade Organization (WTO), the successor to the General Agreement on Trade and Tariffs (GATT.) The WTO has mechanisms for resolving disputes between the member countries. Contrary to what many casual observers believe, Krueger has noted that the U.S. government had won approximately 90 percent of the cases that it had brought to the WTO. Moreover, she noted, it had “lost a smaller share of the cases brought against it.” (International Trade, 2020, p. 157.) Also, compliance rates were fairly high.

Nevertheless, the U.S. government, under Republican and Democratic presidents, has had a philosophical problem with how the WTO operates. The U.S. government sees the WTO as a contract among sovereign states, whereas other countries’ governments see it as a legal system that evolves. During President Trump’s first term, his administration blocked new appointments to the Board. President Biden did nothing to change this. Although the WTO can still issue rulings in trade disputes, since December 2019, the WTO’s Appellate Body, which used to be the final court of appeal, has no members and, therefore, can no longer hear appeals. As a result, the governments of countries that lose in dispute cases can avoid complying.

And I love this quote from her interview with Dylan Matthews:

Some of these arguments about the market assume that if there are market failures, then whatever the government will do will be better. Maybe the market failures are huge, but that does not persuade me that government failures will not automatically be as huge. That’s the part that’s wrong. I still think that when you’re talking about lots of economic activities, you want to just look at incentives. If there’s something wrong with the market, get the incentives right. Giving bureaucrats the incentive to regulate is not the incentive that will work best in most cases.

Krueger is badly overdue for a Nobel Prize. Come on, Sveriges Riksbank (Swedish central bank.)

Thanks to Doug Irwin, LFL, and Tyler Cowen for many suggestions, almost all of which I took.

How Measurement Choices Shape the Housing Debate—and the Charts in the President’s Economic Report.

By Norbert J. Michel and Jerome Famularo, Cato at Liberty, May 7, 2026.

Excerpt:

The Council of Economic Advisers’ 2026 Economic Report of the President tells a familiar story: The American dream of homeownership is slipping away. Chapter 6, in particular, leans heavily on a series of charts meant to show that housing has become less affordable, less attainable, and more distorted by regulation.

While it is true that regulation adds unnecessary costs and distortions to the housing market, much of this “unaffordability” narrative depends on how the data are presented. Change the framing, even slightly, and the story starts to look very different.

Take the report’s central claim that housing has become dramatically less affordable because home prices have outpaced income. That conclusion rests on a simple comparison of real house prices to real median income. Among other problems, this comparison ignores the fact that homes being built in recent years are not the same as those built in years past: They have more standard featuresand, most notably, are larger in size on average.

America’s Worst Appeals Court.

By Robert G. Natelson, Law & Liberty, May 7, 2026.

Excerpt:

Favored parties are those in the traditional liberal political pantheon: labor unions, public schools, environmental groups, government interests, liberal Democrats, and undocumented immigrants. Disfavored parties include property owners, taxpayers, businesses, traditional religions, and conservative Republicans. By way of illustration, in the 2012 case of Reichert v. State ex rel. McCulloch, the justices permitted a group of liberal citizens with no apparent standing to maintain a challenge to a referendum proposed by the legislature. But in the same case, they prohibited the referendum’s conservative sponsors from intervening to defend the measure.

And:

In theory, the people of Montana may reverse the court’s constitutional decisions by initiating and ratifying constitutional amendments. But, again, in 1999, the justices began to protect themselves from that by converting an administrative regulation into an absolute veto over the amendment process.

The court’s specific formula and rationale have differed over time. As initially stated, the rule was that an amendment may not expressly alter more than one section of the Constitution. As later stated, the rule was that an amendment may not expressly or impliedly alter more than one part of the Constitution, unless all changes are “closely related.” Moreover, the court announced that it would consider an amendment’s wording as one change and its effect as a second change—thereby rendering any proposed amendment, no matter how insignificant, potentially voidable as embodying more than one change.

Flipping the script: Coloradans no longer run their government.

By Jon Caldara, Complete Colorado, May 6, 2026.

Excerpt:

Recently, when the legislature arrogantly exempted themselves from open meetings laws, it started a chain reaction I’ve never witnessed in all my decades in politics.

Independence Institute, which I run, helped bring together nearly 50 highly diverse organizations that are usually at each other’s throats. We all shared a common concern: government in Colorado is turning opaque.

Open records are getting harder to access, open meetings are closing. The “people’s” work is being hidden from the people.

And when I say organizations from all over the political spectrum worked together, I’m not exaggerating: Independence Institute, the ACLU, Heidi Ganahl’s conservative Rocky Mountain Voice, the progressive Colorado Times Recorder, Colorado Public Radio, League of Women Voters, Colorado Press Association, Colorado Broadcasters Association, Common Cause, Colorado Black Women for Action, and many, many more.

Engineering the disposable diaper.

By Virginia Postrel, Works in Progress, April 24, 2026.

Excerpt:

P&G’s first design flopped. Tested in the extreme heat of a Dallas summer, the pleated absorbent pad with plastic pants made babies miserable and left them with heat rashes. Starting over, the group had a one piece diaper ready for testing in March 1959. With an improved rayon moisture barrier between the baby and the absorbent tissue wadding, the new diaper was softer and more comfortable. An initial test of 37,000 hand-assembled prototypes went well, with about two thirds of the parents deeming the disposables as good or better than cloth. The next step was mass production.

Designing one well-functioning disposable was hard enough. Turning out hundreds a minute was practically impossible. ‘I think it was the most complex production operation the company had ever faced’, an engineer recalled.

And:

Lowering the price of a diaper required much larger volumes. Aiming at about six cents a diaper, P&G engineers spent several years developing what Harvard Business School’s Michael E. Porter described as ‘a highly sophisticated block-long, continuous-process machine that could assemble diapers at speeds of up to a remarkable 400 a minute’. After successfully testing Pampers at 5.5 cents each, P&G began a national rollout in 1966. By 1973, disposables accounted for 42 percent of the US diaper market.

My Hoover colleague Jon Hartley wrote an article this week titled “Why Amtrak Needs Airport-Level Security.” It’s a short article, so I suggest reading it for yourself.

Jon starts by pointing out that Cole Allen, who attempted to assassinate President Trump, took the train from California to the East Coast and carried his weapons with him. Jon writes:

The details of this event point to a broader problem about security within the US: Passenger rail in the United States, unlike air travel, allows individuals to board with minimal identity verification and little baggage screening. Passengers can arrive shortly before departure and carry large amounts of luggage without inspection.

Jon makes an economic argument:

The economic case for enhanced rail security is also relevant. A single significant security incident would impose large costs, including loss of life, disruption to transportation networks, and reduced public confidence. Preventive measures can be viewed as an investment in our nation’s security infrastructure that meaningfully reduces the probability of these left-tail outcomes. While there are upfront costs, these could be justified by the reduction in long term risk.

Notice the absence of actual numbers. How big would the costs of a single security incident be? And, more important, how likely would such an incident be? With our current system for Amtrak, where the government does not check people’s bags, we haven’t had such an incident yet. That suggests that the probability of a very bad outcome is extremely low. Jon says that the infrastructure would meaningfully reduce the probability of a bad outcome. But that’s not clear at all. The probability is already very low and so it can’t be reduced very much.

The Cole Allen case was not such an incident. He was stopped by the Secret Service employees who were doing their job.

But the one sure thing is that the measures Jon proposes would carry recurring costs. The three main categories would be: (1) the cost of hiring people to run the system; (2) passengers’ loss of time; and (3) passengers’ loss of freedom to travel. Those costs would be borne every day.

Let’s consider each in turn. Having a comprehensive system of baggage and passenger checks would require hiring thousands of employees. That’s not cheap. Let’s say that the government could keep the number at a thousand, which I think is unrealistically low. The employees would cost the government an average of at least $100,000 annually, inclusive of benefits. Right there, that’s $100 million. In the federal government’s grand scheme of things, that’s a small number but remember that the way we got to a federal budget deficit of about $2 trillion was with thousands of special “small number” programs.

The loss of valuable time for millions of passengers would also be substantial. In 2024, Amtrak had 32.8 million passengers. If the Amtrak version of TSA were implemented, a reasonable estimate is that the average amount of time to get through the screen would be 20 minutes. If the average passenger had a time value of even $30 an hour, which is probably an underestimate, the average loss for a passenger would be $10. [1/3 of an hour times $30 per hour.] So the overall cost to passengers from lost time would be over $300 million per year.

Finally, and most important, is the loss of freedom. The federal government has already ended our freedom to fly on commercial airlines without government permission. Extending that regulation to railroads would further reduce our freedom to travel.

Also, I should not let go unanswered this claim that Jon Harley makes:

Airports now rely on multiple layers of screening, including identification checks, baggage scans, and physical screening of passengers. Each layer contributes to reducing the probability of a successful security breach. The combined effect is a system that deters and detects threats more effectively than a single measure could achieve.

Every sentence in the above paragraph is true. But they give the impression that TSA is highly effective and competent. The reality is that when the system is tested, it fails dramatically. Here’s what ChatGPT tells me:

In covert tests, TSA has done poorly. The best-known result was in 2015, when DHS “Red Team” testers reportedly got mock explosives or banned weapons through checkpoints in 67 of 70 tests, a 95% failure rate. ABC reported that undercover investigators were able to smuggle mock explosives or weapons through checkpoints in 95% of trials; RAND’s Brian Michael Jenkins summarized the same result as TSA failing to detect 67 of 70 weapons or fake explosives. (bold in original)

The likely result of the measures Jon Hartley favors would be a relatively ineffective bureaucracy that itself is costly, that costs passengers, and that reduces freedom.

A version of this was posted in 2009 on EconLog on the 20^th anniversary of the fall of the Berlin Wall, a glorious day for human freedom.

I thought of it when I was telling my wife this morning about my post on Richard Scarry yesterday. We reminisced about Karen’s enjoyment of his book What Do People Do All Day?

In Chapter 3 of my book The Joy of Freedom: An Economist’s Odyssey, I tell the story of the fall of the wall and integrate it with my recollections of explaining my excitement back then to my 4-year-old daughter, Karen.

I wrote most of the book between 1998 and 2001 and, for the passage about Karen, went from memory. But a year ago, while cleaning out my home office, I found a diary I kept occasionally about Karen when she was younger. I had written this passage on November 29, 1989, when my memory of what had happened earlier that month was much fresher. Here it is:

On Friday morning, November 10, I came into Karen’s room while Rena [my wife] was waking her up and told her [Rena] all excitedly about the Berlin Wall coming down.

A couple of days later, when the new Newsweek came out with a cover story on the Wall, I decided to try to explain to her [Karen] what was going on. It was one of those significant events I really wanted her to understand, and I thought I could do so without prejudicing her but simply by telling her the facts. [DRH comment in 2026: “Without prejudicing her?” Seriously, David? I realize how un-PC I am now compared to then, and I like myself much better now.]

I told her that the Wall was built to prevent people from leaving a certain area and that it was built when I was a young kid. If people tried to climb over it without permission, I told her, the men who built it shot them and tried to kill them. “That’s not nice,” said Karen. “That’s rude.”

But, I told her, the people who built it decided that it was wrong to stop people from leaving. And now I’m excited, I said, because they can leave. I said, “Now they can do things that they’ve always wanted to do like, like . . .” “Go to Disneyland!” said Karen. “That’s right,” I said. “And they can go to stores and buy neat things they haven’t been able to buy like . . .” “Candy!” shouted Karen excitedly. “That’s right!” I said. “Oh, boy!” [My notes don’t make clear who said “Oh, boy!”] We got all excited together.

I think the two things she focused on are things that the Berliners really would think of first. (The media reported a few days later that the candy shops in West Berlin had sold out.) And by putting it in her terms, I helped a 4-yeare-old understood a lot of the excitement and importance of the event.

California’s ACA 7 Is Affirmative Action With a New Name.

By Wenyuan Wu, Minding the Campus, April 1, 2026.

Excerpt:

In 2014, California State Senator Edward Hernandez introduced Senate Constitutional Amendment 5 (SCA 5) to eliminate the state’s ban on racial preference in higher education. The bill was killed in the State Assembly after a grassroots movement of concerned Chinese Americans forced three Democrats to retract their support. In 2020, the State Legislature placed ACA 5—a blanket repeal of Proposition 209, the state’s ban on race-based affirmative action in public education, employment, and contracting, on the ballot. 9.65 million Californians, many of whom voted for Joe Biden in the same election, rejected the proposal. But that didn’t stop Sacramento’s leftist lawmakers from trying again. In 2023, the State Assembly passed ACA 7, scheming a “research-based” exemption mechanism to Prop. 209. That ACA 7 was stranded in the State Senate, as a few sober-minded Democrats decided not to move the bill beyond the Senate Judiciary Committee.

But the urge to reinsert racial discrimination at the front and center of public life is like a “gift” that keeps giving. The politicians are at it again with a new ACA 7, intended to gut Prop. 209’s educational provisions.

This time, the proposal is embedded in the “Road to Repair” reparations priority package of the California Legislative Black Caucus. Nowhere in the proposal was California’s broken K-12 education pipeline mentioned. Neither did its proponents consider the public’s bipartisan disdain for race-based education policies. There is only raw and rudimentary mathematics of zero-sum calculations: if California’s black students are “underrepresented” for whatever reasons, “reparations,” legislators say, must be given to position them preferentially in the education system. Never mind the state’s pronounced past of anti-Chinese discrimination. If the Chinese, and Asians in general, stand in the way, sacrifice them.

If codified into state law, the new ACA 7 would aid in the de facto practice of racial preferences in all areas of public education. In higher education, race considerations in areas like financial aid and scholarship decisions will replace merit, rendering it particularly disadvantageous for Asian-American students, who have already been targeted by race proxies in admissions.

How the Free Market Cancelled BP’s Renewable Energy Push.

By Eric Worrall, Watts Up With That?, May 5, 2026.

Excerpt:

Across the global energy industry, a quiet but consequential correction has been underway. The post-pandemic era briefly convinced investors, policymakers, and corporate boardrooms that the energy majors could simultaneously fund large-scale renewable transitions while sustaining the upstream productivity that built their balance sheets over decades. That experiment, for several of the world’s largest oil and gas producers, has not delivered the returns that justified the capital deployed. The result is a generational recalibration of investment priorities, and no company illustrates this more starkly than BP.

And:

The underperformance created an opening for activist investors. Elliott Management, one of the world’s most aggressive hedge funds, acquired approximately a 5% stake in BP valued at around $3.8 billion, and used that position to intensify pressure on the board to simplify the business and refocus on fossil fuel value creation. The arrival of Elliott shifted the governance dynamic decisively, accelerating a strategic reset that was already quietly underway under Looney’s successor, Murray Auchincloss.

…

The results that BP reported for the first quarter of 2026 validated the strategic repositioning in the most direct way possible: through financial performance that far exceeded expectations.

The Happy Capitalism of Richard Scarry’s Busytown.

By Elizabeth Nolan Brown, Reason, June 2026.

Excerpt:

Farmer Alfalfa heads to town with an old truck full of corn. The truck is on the verge of collapse. But after selling his corn to Grocer Cat, Farmer Alfalfa uses the money to buy a new truck.

On another day, Alfalfa sells all kinds of produce and uses the money to make purchases from local merchants, including Stitches the tailor and Blacksmith Fox. Stitches, in turn, uses the money from Alfalfa to buy “an egg beater so that his family can make fudge,” while Fox buys more iron to use in his blacksmith business.

Welcome to the very busy—and pro-market—world of children’s book author and illustrator Richard Scarry. If you were a child in the latter half of the last century, there’s a good chance you read some of Scarry’s books. The man was prolific, completing more than 150 works from the 1950s to the 1980s (with many more Scarry books published after his death in 1994).

And:

To me, the book’s most notable feature is its uncomplicated and nonchalant promotion of free market economics. Again and again in What Do People Do All Day?, Scarry illustrates how capitalism can benefit both buyer and seller. Busytown characters use their labor and skills to provide products and services their neighbors want and, in exchange, earn money that they use to fulfill their own families’ needs or invest in their own business activities.

What makes this especially great is that the book’s pro-market bent feels more incidental than ideological. This isn’t a book that hits readers over the head with a particular worldview. Rather, it implies a defense of free market capitalism just by describing the simple and symbiotic way that free markets work.

DRH note: I remember reading Scarry’s books, especially What Do People Do All Day?, to my daughter, Karen, when we was about 3 or 4. She loved them. I read them as a way of telling her how the world works. But as Brown points out, simply doing that gives a view that free markets benefit both buyers and sellers.

Related point: I also read Karen the story “The Little Red Hen.” It’s about the hen doing all the work but her lazy friends—a cat, a dog, and a mouse—wanting to share in the rewards. I thought this an important lesson. But I blew it. I got to the parts where she asks the questions—“Who planted the seeds?” “Who watered the plants?” etc.—and answering each one with “I did.” But when I got to the “I did” on each one, I beat my chest and said it with righteous anger. Karen said, “Daddy, you’re scaring me.” I should have put a little less into it.

Abuse of Power in the Second Trump Administration.

By William Baude, U. St. Thomas L.J. (forthcoming 2026)

Abstract:

The law firm orders are not the most unconstitutional thing the Trump administration has done to date. But they are emblematic of a constitutional problem frequently raised by the Second Trump Administration: the use - and abuse - of a broad range of powers to reward the friends and punish the enemies of the regime. While courts may not be able to stop many of these abuses, that does not mean they are constitutional.

And, as a bonus:

Sean Duffy stands up for taxpayers.

By Editorial Board, Washington Post, May 3, 2026.

Excerpt:

Transportation Secretary Sean P. Duffy opposed bailing out Spirit Airlines and went one step further on Saturday to say that there is no need for a federal bailout of any low-cost airline. While limited-government instincts seem to have atrophied for many Republicans, Duffy has retained the good sense of opposing government bailouts for private companies.

And:

Duffy reportedly opposed Commerce Secretary Howard Lutnick, who pushed for the bailout with the possibility of an up to 90 percent stake in Spirit for the federal government. Lutnick previously supported government ownership in other companies, such as Intel and U.S. Steel.

Deputy White House Chief of Staff Stephen Miller, National Economic Council Director Kevin Hassett and the White House counsel’s office also reportedly expressed reservations about a bailout.

The prospect of a Spirit rescue sent other low-cost airlines to D.C.’s feeding trough, a possibility that Duffy warned about in his April 21 comments. If the government is going to help Spirit deal with high fuel prices, the trade group for low-cost airlines said, why not set up a $2.5 billion fund to help all of them? That would have been five times larger than the proposed Spirit bailout, showing how quickly government interventions in the economy spiral.

DRH comment: Duffy took an important step in opposing the Trump administration’s attempt to fill the swamp. He seems like a smart guy. It would be great to see him follow Canada’s lead and bring air traffic control into the 21^stcentury, although Canada actually did it in the late 20^thcentury.