The Bad and Good Vaccine Passports

On his blog this morning, my friend and fellow blogger Donald Boudreaux has given three cheers to Florida governor Ron DeSantis for his opposition to vaccine passports. I would give the governor at most two cheers.


Because one type of vaccine passport is horrendous and a huge violation of individual rights. Moreover, even aside from principle, it’s less and less effective as we get closer and closer to herd immunity. That type of vaccine passport is one that governments are considering requiring. That’s the issue on which I agree with DeSantis.

But the other type of vaccine passport is one that firms and businesses are thinking of requiring before letting people into their buildings. This raises no issue of individual liberty. Well, actually, it does, but not in the way that opponents of these vaccine passports argue. The issue of individual liberty is whether companies should be free to decide whom they get to deal with. I say they should. I have long been a supporter of freedom of association, even in cases where that view has been unpopular. I wouldn’t require someone to be vaccinated before dealing with that person because I had my second Moderna shot 20 days ago. But other people have different attitudes to risk. And a business needs to take into account the different attitudes people have. Some may decide that they can get more business by assuring the public that anyone who enters their business has been vaccinated. This is a great solution to a tricky problem. It also has the side benefit of giving people an incentive to be vaccinated. We still hear about people who are nervous or hesitant about, or even opposed to, getting vaccinated. They should be free not to be vaccinated. But other people should be free not to deal with them.


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The cultural impact of rent control

The Economist has an article discussing the predictable failure of Berlin’s new rent control law:

And indeed a recent study by the German Institute for Economic Research found that rents in the newly regulated market of flats built before 2014 have declined by 11% compared with the still-unregulated market for newer buildings.

But the problem, entirely foreseeable and foreseen, is that the caps have made the city’s housing shortage much worse: the number of classified ads for rentals has fallen by more than half. Tenants, naturally enough, stick to their rent-capped apartments like glue. Landlords use flats for themselves, sell them or simply keep them empty in the hope that the court will nix the new regulation. Meanwhile, rents and sale prices in the still-unregulated part of the market, and in cities close to Berlin, such as Potsdam, have risen far faster than in other big German cities.

In addition, rent control also discourages landlords from properly maintaining their buildings.  In the long run, the quality of rent-controlled buildings will tend to approximate their price.  And this can cause discord between tenants and landlords:

The rent cap has managed to make Berlin’s housing shortage even worse—and poisoned relations between tenants and their landlords.

Socialism is sometimes defined as statism plus egalitarianism.  But these are actually quite different policies, and in my view statism is far worse.  Regulations such as rent controls, minimum wage laws and immigration restrictions tend to pit one person against another, reducing cooperation and making society more cruel in the process.  Egalitarian policies such as progressive taxes can also have negative effects in areas such as work incentives, but they don’t tend to undermine civic virtue in quite as pronounced fashion as statist policies.  I’d rather live in a free market country with progressive taxes than a statist economy with flat taxes.



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Privileges and Privacy for the Rulers

Recent journalistic investigations revealed that the family and friends of New York governor Andrew Cuomo benefited from nomenklatura privileges at the time when ordinary people had problems getting Covid-19 tests and timely results. These state-privileged people could be tested rapidly, often at home and many times if they wished. Their tests were often rushed to laboratories by state troopers and treated in priority. Liz Wolfe of Reason Magazine writes:

There was limited testing if you thought you’d been exposed, and long wait times if you did manage to nab one of those precious few tests.

But not if your last name starts with a C and ends with an uomo! …

The Albany Times Union reported last night that Democratic Gov. Andrew Cuomo directed the state’s top health officials to prioritize COVID testing for “the governor’s relatives as well as influential people with ties to the administration.”

This reminded me that, in late December, I reported on Cuomo’s intention to prosecute those who would give or sell Covid-19 vaccines to anybody outside the groups favored by the state and its priorities (“Free Enterprise: A Daring New Year Wish”). At that time, I asked the governor’s office, through its website, if he had himself received the vaccine. Two weeks later, having received no reply, I rapidly drafted a freedom-of-information request (called Freedom of Information Law or FOIL request in New York State) and emailed it to both the governor’s office and the New York State Department of Health.

The two replies landed in my virtual mailbox a few days apart in January. The letter from the Executive Chamber of the State of New York said:

This letter responds to your correspondence dated January 12, 2021, which pursuant to FOIL, requested:

“the dates Governor Cuomo, members of his family, and immediate staff have received vaccines against Covid-19; and indicate in which group of priority recipients (according to the State of New York’s policies) they fall.”

To the extent your request is reasonably described, these records are not maintained by the NYS Executive Chamber.

Please be advised that even assuming such records were maintained by the Executive Chamber, they would be exempt pursuant to Public Officers Law § 87(2)(b) because, if disclosed, would “constitute an unwarranted invasion of personal privacy.

Additionally, pursuant to Public Officers Law § 87(2)(a), an agency may deny access to records or portions thereof that are “specifically exempted from disclosure by state or federal statute.” Accordingly, to the extent records may exist said records are exempt from production pursuant to Health Insurance Portability and Accountability Act of 1996, Public. Law 104-191 and New York State Public Health Law §18.

The reply from the Department of Health was not very different:

This letter responds to your Freedom of Information Law (FOIL) request of January 12, 2021, in which you requested “the dates Governor Cuomo, members of his family, and immediate staff have received vaccines against Covid-19; and indicate in which group of priority recipients (according to the State of New York’s policies) they fall.”

Please be advised, the records you are requesting, to the extent such records exist, contain protected health information (PHI) regarding the individuals referenced in your request. In accordance with New York State law and the Health Insurance Portability and Accountability Act of 1996 (HIPAA) (Federal Law 45 C.F.R. §164.524), the Department requires a duly executed HIPAA authorization form in order to release PHI regarding any individual. We note your request was not accompanied by any HIPAA authorization forms.

Accordingly, your request is denied pursuant to POL §87(2)(a) as “specifically exempted from disclosure by state or federal statute” in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) (Federal Law 45 C.F.R. §164.524), and §87(2)(b), because disclosure “would constitute an unwarranted invasion of personal privacy.”

We now know that the governor himself waited his turn and received the vaccine in mid-March with much public fanfare.

The replies to my FOIL requests, however, show something interesting. One might have thought that privacy laws were meant to protect individuals against Leviathan’s lust for private information. But these laws seem to have been hijacked to protect the privacy of the rulers themselves. Perhaps actual governments don’t work as their ideal models?

Is “highjack” exaggerated? Consider the following. If, as current legal doctrine claims, ordinary individuals have no expectation of privacy when they enter an air terminal or cross the U.S. border or relate to their loving governments in certain other ways, why would political rulers have an expectation of privacy while they serve the people and sacrifice themselves for the “public good”?


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Whose Body Is It Anyway?

When I taught benefit‐​cost analysis at the Naval Postgraduate School, one of the first principles I explained was that, to do a good analysis, you need to consider the costs and benefits to the various people affected rather than taking as gospel the desires of policymakers. We studied both good and bad examples of benefit‐​cost analyses. In the bad ones, a common error was to leave out the gains to consumers when they consumed items that policymakers did not want them to. A typical case was alcoholic beverages; policymakers kept overlooking the enjoyment that consumers receive from a drink.

In his book The Rediscovery of Tobacco: Smoking, Vaping, and the Creative Destruction of the Cigarette, independent journalist (and one‐​time Cato staffer) Jacob Grier avoids that error. Not only does he consider the costs of cigarettes and other forms of tobacco to their users and to nonsmokers, but he also considers the benefits to users. In doing so, he makes a case for people’s freedom to smoke or inhale what they want when it does not inflict harm on non‐​users. Along the way, he details how the antismoking movement has shown its disregard for the interests of smokers. He also shows that the damage from secondhand and “thirdhand” smoke is often overstated and that the harm from e‐​cigarettes is overstated and the benefits understated. Although I am a dyed‐​in‐​the‐​wool nonsmoker and non‐​vaper and Grier did not persuade me to try these substances (nor did he attempt to change readers’ minds), I learned a lot from this book. You could say that I “rediscovered tobacco.”

This is from David R. Henderson, “Whose Body Is It Anyway?” Regulation, Spring 2021.

Another highlight:

Grier notes an interesting difference in research methodologies between studies of the health effects on smokers in the 1940s and 1950s and the later studies of researchers on secondhand smoke. The earlier researchers had noticed a huge increase in deaths from lung cancer in the first half of the 20th century and wanted to figure out why. They established a clear relationship between smoking cigarettes and lung cancer. But, notes Grier, research on secondhand smoke “reversed that approach.” He writes, “Scientists started out with a hypothesis — that secondhand smoke was causing lung cancer in nonsmokers — and took on the task of finding the bodies.”

My one criticism:

Antismoking activists, he notes, didn’t stop with secondhand smoke. They raised the ante by stirring up concern about “thirdhand smoke.” What’s that? Grier quotes a definition the New York Times posited in 2009: “the invisible yet toxic brew of gases and particles clinging to smokers’ hair and clothing, not to mention cushions and carpeting, that lingers long after secondhand smoke has cleared the room.” Grier comments that he does not know “if studies will ever successfully demonstrate that thirdhand smoke increases the risk of any particular disease, and, crucially neither do the researchers who have been promoting these fears to the public for more than a decade.” This is awkward wording. He seems to be saying that the researchers have no evidence, but I wish he had stated his point more clearly.

Read the whole thing. To do so, you need to go to the link and then download the pdf.



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The Solution to Expensive Housing Is More Housing


Finally, a book by a New York Times reporter who understands the crucial link between restrictions on the supply of housing and the price of housing! Golden Gates, by economics reporter Conor Dougherty, is a tour de force. It’s a rare book that mixes careful, nuanced reporting, painless economics lessons, interesting history of California, and pitch‐​perfect humor, but Dougherty has written one.

Dougherty, who was a housing reporter for the Wall Street Journal for a decade, must have learned a lot in that job. He knows and understands the economics literature on the connection between supply and price, as evidenced by his treatment of the pathbreaking work of Harvard’s Ed Glaeser and Wharton’s Joseph Gyourko. (See “Zoning’s Steep Price,” Fall 2002.) Furthermore, Dougherty understands that when more luxury housing is built, that frees up housing that is then sold to people slightly lower on the wealth scale, and on down. He also understands the negative consequences of rent control.

That’s not to say that I agree with everything in the book. In particular, the author underplays both the bad consequences of rent control and the good that would result from massive housing deregulation. But those defects are way more than offset by his understanding of the harm done by restrictions on building.

This is from David R. Henderson, “The Solution to Expensive Housing Is More Housing,” Regulation, Spring 2021. It’s the lead book review, an honor I rarely get.

Another highlight:

Early in the book, Dougherty introduces a number of important players. First is a colorful character named Sonja Trauss, a teacher in the East Bay who dropped out of the doctoral economics program at Washington University in St. Louis, emerging with a master’s degree. Trauss started San Francisco Bay Area Renters’ Federation, an organization that favors allowing more housing to be built. She was an early advocate of YIMBY (Yes In My Back Yard), the opposite of NIMBY (Not In My Back Yard). As Dougherty puts it, “Sonja was for anything and everything, so long as it was built tall and fast and had people living in it.” Trauss later became a full‐​time activist for the cause of more housing, and Dougherty tracks her movements carefully.

Trauss has a way with words and Dougherty has a keen ear for those words. She understands 19th‐​century writer Frederic Bastiat’s point about the unseen consequences of government regulation. At a hearing in the East Bay city of Lafayette, she pointed out that many of the people who would be affected by a decision to allow more housing “don’t know who they are yet” and that some of them are not even born. It’s Bastiat’s seen versus unseen.

One more highlight:

The book also discusses Harvard labor economist Lawrence Katz. Few people probably know — I didn’t — that when he graduated as Berkeley’s top economics undergrad, Katz devoted his whole 1981 commencement speech to one of the main causes of the high price of housing in the Bay Area: restriction of supply. He pointed out something that few of his classmates probably knew: just 10 years earlier, “California house prices were not much greater than the national median.”

Read the whole thing and read the book.



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Repealing Political Discrimination

Most skilled American workers are now at least somewhat afraid to criticize fashionable left-wing views.  They feel quite fearful to do so on the job, and fairly fearful to do so on social media.  One tempting way to quell this high anxiety is to pass new laws against political discrimination.  Washington, DC already has such a law:

[T]he District of Columbia Human Rights Act prohibits all employers in the District from refusing to hire, terminating, or otherwise discriminating against any individual with respect to his or her “compensation, terms, conditions, or privileges of employment” on the basis of the individual’s political affiliation.  D.C. Code § 2-1402.11.

Before passing a new law, however, one should always ask, “Can we accomplish the same end by repealing – or liberalizing – an existing law?”  And in this case, the answer is clearly yes.

But first, let’s back up.  Why are high-skilled employers almost uniformly eager to enforce left-wing fashions, such as adopting an official “anti-racist” philosophy?  Sincere commitment is part of the reason, but far from the whole story.  Political philosophy is too variable to explain such uniform workplace policies.  A better story, in my view, is that almost all employers – left, right, and in-between – fear race and gender discrimination lawsuits.  And since their inception, such lawsuits have been sliding down a slippery slope.

The slippery slope looks something like this:

1. The law initially bans conscious decisions by employers to base hiring, promotion, or compensation on race or gender.

2. Discrimination gradually gets reinterpreted to include “unconscious” behavior with similar effects.

3. The next step is to blame employers for saying “the wrong thing,” even if there’s no discernable effect on workers’ objective career outcomes.

4. Then you blame employers for failing to deter their employees from saying “the wrong thing” to each other.  This is when workers go from looking over their shoulder before they say something negative about a specific person, to looking over their shoulder before they say anything that would upset their most hypersensitive colleague.

5. Finally, you blame employers for failing to failing to induce employees to say “the right thing” loudly and often.  In other words, for failing to build a “culture of inclusion.”

Why has the slope been so slippery?  Because if you’re doing less to “fight discrimination” than other firms, you worry that you might be perceived as “soft on discrimination” and get sued.  (And if you do more to “fight discrimination” than other firms, even better). You definitely don’t want to loudly announce, “We’ve gone far enough.”  Such words are financially dangerous.  As I’ve said before:

Imagine what would happen if a firm’s top brass loudly declared that, “Discrimination simply isn’t a problem here” – and routinely fired complainers for contradicting the party line.  Picture a firm blanketed in propaganda telling workers to “Be color-blind,” “Laugh it off,” and “No one likes a tattle-tale.”  A small business in a conservative area might get away with this for a few years, but a Fortune 500 company that stuck to its right-wing guns would go down in flames.

You could argue that employers still overreact to the risk of lawsuits.  I’m sympathetic; contrary to what you’ve heard, even hiring by IQ is fairly safe.  But there’s no need to resolve this debate here, because what I’m going to propose is similarly good at defusing both justified and unjustified fear.

My proposal:

1. Amend discrimination law to explicitly state: “Political speech by employers or employees, on or off the job, shall never be considered a form or indicator of ‘discrimination.’  ‘Political speech’ includes the expression of any allegedly racist or sexist views.”

2. For further teeth, add: “Any employee who lodges any formal complaint – internal or external – about a co-worker or employer’s political speech forfeits any right to sue that employer for discrimination for any reason whatsoever.”  This preserves firms’ right to handle offensive speech internally; they can still fire you for singing Hitler’s praises on the job.  But it also gives firms a free hand to handle these internal complaints as it sees fit, without fear of legal blowback or second-guessing.  In fact, it gives firms an incentive to urge employees to voice their complaints internally to ensure that the firm won’t have to deal with such complaints in court.

Most people, I suspect, will object that these legal changes for going too far.  Since I think discrimination laws do little to reduce genuine discrimination, I obviously disagree.  But I’m unlikely to persuade such people here.

On the other hand, many who share my concerns about freedom of expression will object that my proposed legal changes don’t go far enough.  Under my system, stridently left-wing employers can continue to impose a rigid orthodoxy.  Toning down the fear of lawsuits only changes the behavior of employers who were motivated by fear in the first place.

Fair enough, but I maintain that my proposal strikes a reasonable balance.

Reducing the threat of lawsuits will restore variety by reviving competition.  Strident left-wing workplaces aren’t a big deal as long as we unbelievers can take our labor and go elsewhere at reasonable cost.  And yes, strident left-wing employers have rights, too.  If they want to spend every Friday doing struggle sessions, they should be free to do so.

Other employers, however, shouldn’t lose sleep over lawsuits if they offer their workers a more genteel experience.  While I’m not sure, I definitely predict that my proposed revisions of existing discrimination law would lead to robust competition between employers to create workplaces where no one walks on eggshells.  Since worker preferences vary, we will witness a wide range of options.  But since only a few fanatics savor stifling left-wing dogma, we’ll no longer witness much of that.

I for one have already seen enough stifling left-wing dogma to last a lifetime.


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Alain Bertaud and the Future of Cities

Recently, our parent organization, Liberty Fund, embarked on a series of programs aimed at our local (Indianapolis, Indiana) community. The first topic we endeavored to explore was the future of cities.

One of the programs we hosted was a virtual “town hall,” in which I was privileged to interview former EconTalk guest and urban planner Alain Bertaud.

I asked Bertaud what a city like Indianapolis, whose goal is to attract and retain talented young professionals, ought to focus on, as well as why we might not want our city planners to have a “vision” for the future.

Here’s the video of our conversation:



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Reverse Musical Chairs

One of the main problems with selling housing deregulation is the perception that new construction “only benefits the rich.”  Rich developers of course, but also rich home-buyers.  It’s easy to see where casual observers get this idea.  New housing is usually nice housing, because over time technology improves and capital depreciates.  Since richer people are more willing to pay the upcharge for nicer housing, the future residents of new construction are usually well-to-do.

So what do casual observers miss?  They miss the big picture: People who move into new construction are moving away from older construction.  When they move, those older units become available for others.  While those others probably won’t be drastically poorer than those they replace, they tend to be slightly poorer.  Think: “one rung down.”  When these slightly poorer people move, their prior dwellings will tend to be taken over by those who are a further rung down.  And so on, in a great chain reaction.  Allowing new construction really does help the whole income distribution.

Since this is hard to visualize, picture a game of musical chairs.  With one key difference.  A normal game of musical chairs starts out with one chair per person, then subtracts a chair every turn.  The result: Faster, aggressive kids push out everyone else, until the fastest, most aggressive kid wins.  In my variant game, we start out with fewer chairs than people, then add a chair every turn.  The result: Slower and more pacific kids start getting places to sit, until there are enough chairs for everyone.

Both games feature a competitive scramble.  In conventional musical chairs, however, the competition gets more and more cutthroat and in the end almost everyone loses.  In my reverse musical chairs, in contrast, competition gets milder and milder and in the end everyone wins.

I don’t advocate playing reverse musical chairs at children’s birthday parties.  Games and stories where everyone wins are notoriously dull.  The struggle is part of the fun.  In real life, however, the Alice in Wonderland outcome of “All have won, and all must have prizes” is a dream come true.  Deregulating construction won’t instantly deliver high-quality, affordable housing to everyone.  Instead, it’s like my game of reverse chairs.  Every new structure built makes the competition for housing a little milder, until practically everyone comes out a winner.


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Covid Minimizing on One Variable

Back in July or August, I was walking along Alvarado Street minding my own business. Suddenly, someone with a Monterey city government worker logo on his shirt came up to me and told me I had to wear a mask. I asked him to show me in the regulations where it said that. The sign above admits of no exceptions but the regulatory document is pages long. A local lawyer friend only a few days earlier had explained to me that one wasn’t legally required to wear a mask if one were exercising. I was on my daily quick walk.

So he pulled out the regulations to show me that there wasn’t such an exception. I walked over to look over his shoulder do I could show him the exception. He told me he was uncomfortable with my being so close without a mask. That’s fair, I thought, so I donned my mask. Neither Bill (his name) nor I could find the exception that my lawyer friend had told me about. For that reason, I wore my mask for the rest of my walk.

But when I got back to my office and got on line, I did find a 6-foot exception but not the exercise exception. I printed out the regs and started carrying them with me on my daily walk.

A couple of days later, I was starting out on my walk with no other pedestrians nearby when I saw a car with the Monterey city government logo drive by and turn the corner on the one-way street I had just crossed. I thought it might be Bill, the guy who had stopped me a few days earlier, but I couldn’t tell because he had had his mask on when he was walking. I figured I was safe because he was turning down a one-way street. Not wanting another confrontation, I ignored the fact that he was shouting out his window at me as he turned the corner, but I put on my mask just in case.

Then something amazing happened. Even though I couldn’t see him because it was a blind corner, I heard his car back up. He backed up all the way the wrong way on a one-way street and then turned to follow me in the road. He lowered his window to tell me that he had checked the regulations on line after having stopped me and that there was no exercise exception. I waved and thanked him.

But notice what happened. Bill thought that informing me of the absence of the exercise exception was so important that it was reasonable for him to risk backing up the wrong way when a car easily could have come around the corner and rear-ended him.

This was a microcosm of what’s so wrong with the regulatory mindset that so many bureaucrats bring to the Covid issue. Don’t worry about causing an accident because it’s so important to tell this pedestrian (me) what he had already told me a few days earlier: that there was no exercise exception to the Covid regulations.


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Should AstraZeneca Vaccine Be Paused?

Millions of people in dozens of countries have received the AstraZeneca Covid vaccine with few reports of ill effects, and its prior testing in tens of thousands of people found it to be safe.

But recently, blood clots and abnormal bleeding in a small number of vaccine recipients in European countries have cast doubt on its safety, although no causative link has been found between the patients’ conditions and the vaccine. The reports have prompted more than a dozen countries to either partly or fully suspend the vaccine’s use while the cases are investigated. Most of the nations said they were doing so as a precaution until leading health agencies could review the cases.

This is from Denise Grady and Rebecca Robbins, “Should You Be Concerned About Blood Clots, Bleeding and the AZ-Vaccine?,” New York Times, March 15, 2021.

The countries that have paused include Germany, Italy, France, Spain, Denmark, Ireland, Norway, the Netherlands, and Iceland.

This makes no sense, but it is, unfortunately, not so unusual for governments to substitute their own risk assessments for those of their sheep citizens.

There’s such an obvious solution: have the governments of those countries warn people that there might be blood clots, tell them the data, and leave them free to choose. I guarantee that millions of Europeans would be willing to take the small risk of blood clots and go ahead and get vaccinated.

Oh and, by the way, my solution applies to the United States, whose government is even worse: the Food and Drug Administration has not yet allowed people to take the AstraZeneca vaccine.

Economist Thomas Sowell is famous for saying “There are no solutions. There are only tradeoffs.” I don’t agree. I’ve just given a solution, one that lets people make their own tradeoffs.


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