Category: Current Affairs
Does drug interdiction work?
From GPT 5.1 Pro:
“In the economic literature, the dominant story is:
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Prohibition and enforcement do make illegal drugs much more expensive than they would be in a legal market.
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But marginal increases in interdiction (seizing shipments, crop eradication, etc.), especially in the Andes, have not produced sustained higher prices or lower quantities in consumer markets.
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Instead, retail, purity‑adjusted prices for cocaine and heroin show large long‑run declines (1980s–2000s) and then roughly flat or drifting patterns at historically low levels, while global production and consumption reach record highs. Reuters+4whitehouse.gov+4whitehouse.gov+4
So between your two stylized options—“successfully limit quantity and raise prices” vs. “long‑run steady decline in prices”—the long‑run price data look a lot more like the second story, with only temporary interruptions from big interdiction pushes.”
There is much more at the link. Blowing up a few boats is not going to change that logic.
I hope this is stupid and bad enough to change some things
Hegseth order on first Caribbean boat strike, officials say: Kill them all…As two men clung to a stricken, burning ship targeted by SEAL Team 6, the Joint Special Operations commander followed the defense secretary’s order to leave no survivors.
Here is the full article, of course that is a war crime.
Thanksgiving and the Lessons of Political Economy
Time to re-up my 2004 post on thanksgiving and the lessons of political economy. Here it is with no indent:
It’s one of the ironies of American history that when the Pilgrims first arrived at Plymouth rock they promptly set about creating a communist society. Of course, they were soon starving to death.
Fortunately, “after much debate of things,” Governor William Bradford ended corn collectivism, decreeing that each family should keep the corn that it produced. In one of the most insightful statements of political economy ever penned, Bradford described the results of the new and old systems.
[Ending corn collectivism] had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression.
The experience that was had in this common course and condition, tried sundry years and that amongst godly and sober men, may well evince the vanity of that conceit of Plato’s and other ancients applauded by some of later times; that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. For the young men, that were most able and fit for labour and service, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. The strong, or man of parts, had no more in division of victuals and clothes than he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labours and victuals, clothes, etc., with the meaner and younger sort, thought it some indignity and disrespect unto them. And for men’s wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc., they deemed it a kind of slavery, neither could many husbands well brook it. Upon the point all being to have alike, and all to do alike, they thought themselves in the like condition, and one as good as another; and so, if it did not cut off those relations that God hath set amongst men, yet it did at least much diminish and take off the mutual respects that should be preserved amongst them. And would have been worse if they had been men of another condition. Let none object this is men’s corruption, and nothing to the course itself. I answer, seeing all men have this corruption in them, God in His wisdom saw another course fitter for them.
Among Bradford’s many insights it’s amazing that he saw so clearly how collectivism failed not only as an economic system but that even among godly men “it did at least much diminish and take off the mutual respects that should be preserved amongst them.” And it shocks me to my core when he writes that to make the collectivist system work would have required “great tyranny and oppression.” Can you imagine how much pain the twentieth century could have avoided if Bradford’s insights been more widely recognized?
Addendum: Today (2025) I would add only that the twenty-first century could avoid a lot of pain if Bradford’s insights were more widely recognized.
“Why ‘Humane’ Immigration Policy Ends in Cruelty”
That is the title of my latest Free Press column, which is interesting throughout. Here is one bit from it:
Behind any immigration debate is an uncomfortable truth: In rich, successful democracies, every workable immigration policy, over enough time, offends liberal instincts or public opinion—often both. We oscillate between compassion and coercive control, and the more we do of one, the more we seem to need some of the other.
The dilemma: Due to the ever-rising numbers of migration to the United States, the enforcement of immigration restrictions has to become more oppressive and more unpleasant as time passes. The alternative course, which is equally unpleasant, is that immigration increases to levels that voters find unacceptable, and we fall under the rule of anti-immigrant parties—which are illiberal on many other issues as well.
The news gets worse. The more pro-immigration you are and the more you allow some foreigners to enter this country, the more others on the outside will wish to come too. Unless you are going to open the border entirely (not a good idea), you will end up having to impose increasingly harsh measures on illegal arrivals, and tougher and tougher restrictions on potentially legal applicants. The liberals in essence become the illiberals.
So I mourn our ongoing and intensifying moral dilemma. At the margin, there are so many people who want to come here (a sign of American success, of course) that there is no kind and gentle way to limit their numbers to a level the public finds acceptable.
And this:
A third alternative is to slow the intake. Keep it fast enough for America to remain “a nation of migrants,” but slow enough to avoid major backlash or to asymptotically approach open borders.
That sounds pretty good, right? But here is the illiberal catch: Given the growing attractiveness of migration to America, penalties and enforcement have to get tougher each year. There are no ways to send large numbers of people back that are not cruel and coercive. There are also few ways to keep people out that do not involve the extensive presence of coercive police, border arrests, imprisonment, and other unpleasant measures.
We might decide to let in more migrants, but still we will end up being cruel to the would-be migrants at the margin. And as demand to migrate continues to rise, we have to be increasingly coercive over time.
That does not have to mean masked ICE men grabbing people randomly off the streets (which leads to violating the constitutional rights of mistakenly identified citizens), but one way or another it is going to involve threats of violence against actual human bodies. That can mean turning away boats full of desperate people, flying people back home, putting them in interim jails, and in general treating them in ways I find deeply unpleasant and disturbing. It is no accident that the Biden administration could not completely avoid the Trumpian policy of separating illegal migrants from the children that accompany them.
Definitely recommended, one of my more interesting pieces this year.
Side-Walking Problems
Local Law 11 requires owners of New York City’s 16,000-plus buildings over six stories to get a “close-up, hands-on” facade inspection every five years. Repair costs in NYC’s bureaucratic and labor-union driven system are very high, so the owners throw up “temporary” plywood sheds that often sit there for a decade. NYC now has some 400 miles of ugly sheds.
The ~9,000 sheds stretching nearly 400 miles have installation costs around $100–150 per linear foot and ongoing rents of about 5–6% of that per month, implying something like $150 million plus a year in shed rentals citywide.
Well. at last something is being done! The sheds are being made prettier! Six new designs, some with transparent roofs as in the rendering below are now allowed. Looks nice in the picture. Will it look as nice in real life? Will it cost more? Almost certainly!
To be fair, City Hall is cracking down as well as doubling down: new laws cut shed permits from a year to three months and ratchet up fines for letting sheds linger. That’s a good idea. But the prettier sheds are the tell. Instead of reevaluating the law, doing a cost-benefit test or comparing with global standards, NYC wants to be less ugly.
How about using drones and AI to inspect buildings? Singapore requires inspections every 7 years but uses drones to do most of the work with a follow-up with hands-on check. How about investigating ways to cut the cost of repair? The best analysis of NYCs facade program indicates something surprising–the problem isn’t just deteriorating old buildings but also poorly installed glass in new buildings, thus more focus on installation quality is perhaps warranted. Moreover, are safety resources being optimized? Instead of looking up, New Yorkers might do better by looking down. Stray voltage continues to kill pets and shock residents. Manhole “incidents” including explosions happen in the thousands every year! What’s the best way to allocate a dollar to save a life in NYC?
Instead of dealing the with the tough but serious problems, NYC has decided to put on the paint.
*The Age of Disclosure*
I have now watched the whole movie. The first twenty-eight minutes are truly excellent, the best statement of the case for taking UAPs seriously. It is impressive how they lined up dozens of serious figures, from the military and intelligence services, willing to insist that UAPs are a real phenomenon, supported by multiple sources of evidence. Not sensor errors, not flocks of birds, and not mistakes in interpreting images. This part of the debate now should be considered closed. It is also amazing that Marco Rubio has such a large presence in the film, as of course he is now America’s Secretary of State.
You will note this earlier part of the movie does not insist that UAPs are aliens.
After that point, the film runs a lot of risks. About one-third of what is left is responsible, along the lines of the first twenty-eight minutes. But the other two-thirds or so consists of quite unsupported claims about alien beings, bodies discovered, reverse engineering, quantum bubbles, and so on. You will not find dozens of respected, credentialed, obviously non-crazy sources confirming any of those propositions. The presentation also becomes too conspiratorial. Still, part of the latter part of the movie remains good and responsible.
Overall I can recommend this as an informative and sometimes revelatory compendium of information. It does not have anything fundamentally new, but brings together the evidence in the aggregate better than any other source I know,and it assembles the best and most credible set of testifiers. And then there are the irresponsible bits, which you can either ignore (though still think about), or use as a reason to dismiss the entire film. I will do the former.
My very fun Conversation with Blake Scholl
Here is the audio, video, and transcript. This was at a live event (the excellent Roots of Progress conference), so it is only about forty minutes, shorter than usual. Here is the episode summary:
Blake Scholl is one of the leading figures working to bring back civilian supersonic flight. As the founder and CEO of Boom Supersonic, he’s building a new generation of supersonic aircraft and pushing for the policies needed to make commercial supersonic travel viable again. But he’s equally as impressive as someone who thinks systematically about improving dysfunction—whether it’s airport design, traffic congestion, or defense procurement—and sees creative solutions to problems everyone else has learned to accept.
Tyler and Blake discuss why airport terminals should be underground, why every road needs a toll, what’s wrong with how we board planes, the contrasting cultures of Amazon and Groupon, why Concorde and Apollo were impressive tech demos but terrible products, what Ayn Rand understood about supersonic transport in 1957, what’s wrong with aerospace manufacturing, his heuristic when confronting evident stupidity, his technique for mastering new domains, how LLMs are revolutionizing regulatory paperwork, and much more.
Excerpt:
COWEN: There’s plenty about Boom online and in your interviews, so I’d like to take some different tacks here. This general notion of having things move more quickly, I’m a big fan of that. Do you have a plan for how we could make moving through an airport happen more quickly? You’re in charge. You’re the dictator. You don’t have to worry about bureaucratic obstacles. You just do it.
SCHOLL: I think about this in the shower like every day. There is a much better airport design that, as best I can tell, has never been built. Here’s the idea: You should put the terminals underground. Airside is above ground. Terminals are below ground. Imagine a design with two runways. There’s an arrival runway, departure runway. Traffic flows from arrival runway to departure runway. You don’t need tugs. You can delete a whole bunch of airport infrastructure.
Imagine you pull into a gate. The jetway is actually an escalator that comes up from underneath the ground. Then you pull forward, so you can delete a whole bunch of claptrap that is just unnecessary. The terminal underground should have skylights so it can still be incredibly beautiful. If you model fundamentally the thing on a crossbar switch, there are a whole bunch of insights for how to make it radically more efficient. Sorry. This is a blog post I want to write one day. Actually, it’s an airport I want to build.
And;
COWEN: I’m at the United desk. I have some kind of question. There’s only two or three people in front of me, but it takes forever. I notice they’re just talking back and forth to the assistant. They’re discussing the weather or the future prospects for progress, total factor productivity. I don’t know. I’m frustrated. How can we make that process faster? What’s going wrong there?
SCHOLL: The thing I most don’t understand is why it requires so many keystrokes to check into a hotel room. What are they writing?
What are they writing?
Mexico facts of the day
I have been expecting this for a long time, but it came more quickly than I thought:
Mexico is now the world’s top buyer of U.S. goods, according to data released by the U.S. government on Wednesday, outpacing Canada for the first time in nearly 30 years.
The data highlighted how Mexico and the United States have, despite periodic political tensions, become deeply intertwined in business, and how much global trade patterns have shifted in a short period. Only two years ago, Mexico became the country that sold the most goods to the United States, surpassing China.
“Mexico is the United States’ main trading partner,” said Marcelo Ebrard, Mexico’s economy minister, during the president’s daily news conference on Wednesday.
Here is more from the NYT. Via Brian Winter. As I have been telling people for decades now, visiting Mexico, learning about Mexico, and learning Spanish are very good investments in understanding the world, most of all if you live in the USA.
American democracy is very much alive, though not in all regards well
The Democrats who won in the November elections are all going to assume office without incident or controversy.
The Supreme Court is likely to rule against at least major parts of the Trump tariff plan, his signature initiative. Trump already has complained vocally on social media about this. He also preemptively announced that some of the food tariffs would be reversed, in the interests of “affordability.”
National Guard troops have been removed from Chicago and Portland, in part due to court challenges. The troops in WDC have turned out to be a nothingburger from a civil liberties point of view.
Here is an account of November 18 and all that happened that day:
* House votes 427-1 to release the Epstein files, a veto-proof+ majority
* A federal judge blocked GOP redistricting map in Texas, meaning net net with CA measure passed, Democrats could pick up seats for 2026, KARMA!
* A federal appeals court, including two Trump appointed judges, rejected Trump’s defamation lawsuit against CNN over the term “Big Lie,” finding the case meritless
* Corporate Public Broadcasting agree to fulfill its $36 million annual contract with NPR, after a judge told Trump appointees at CPB that their defense was not credible
* A NY judge dismissed Trump’s calling of New York’s law barring immigration arrests in state and local courthouses.
The Senate also sided with the House on the Epstein files. Nate Silver and many others write about how Trump is now quite possibly a lame duck President.
I do not doubt that there are many bad policies, and also much more corruption, and a more transparent form of corruption, which is corrosive in its own right. But it was never the case that American democracy was going to disappear. That view was one of the biggest boo-boos held by (some) American elites in recent times, and I hope we will start seeing people repudiating it.
I think the causes of this error have been:
1. Extreme dislike of the Trump administration, leading to emotional reactions when a bit more analysis would have done better.
2. Pessimism bias in the general sense.
3. Recency bias — for the earlier part of the term, Congress was relatively quiescent.
4. Cognitive and emotional inability to admit the simple truth of “democracy itself can lead to pretty bad outcomes,” thus the need to paint the status quo as something other than democracy.
5. The (largely incorrect) theory of good things happening in politics is “good people will them,” so from that starting point if you see bad people willing bad things you freak out. The understanding was never “spontaneous order” enough to begin with.
Any other?
The MR Podcast: Tariffs!
On The Marginal Revolution Podcast this week, Tyler and I discuss tariffs! Here’s one bit:
COWEN: I have a new best argument against tariffs. It’s very soft. I think it’s hard to prove, but it might actually be the very best argument against tariffs.
TABARROK: All right, let’s hear it.
COWEN: If you think about COVID policy, the wealthy nations did a bunch of things. Some of them were quite bad, and the poorer nations all copied that. They didn’t have to copy it, but there was some kind of contagion effect, or that seemed like the high-status thing to do. I believe with tariffs, something similar goes on. There’s a huge literature about retaliation. Of course, retaliation is a cost, that’s bad, but simply the copying effect that it was high status for the wealthy nations to have tariffs. They can afford it better, but then places like India had their own version of the same thing. That was just terrible for India at a much higher human cost than, say, it was for the United States. Again, it’s hard to trace or prove, but that I think could actually be the best argument against tariffs, simply that poorer countries will copy what the high-status nations are doing.
This is like Rob Henderson’s idea of luxury beliefs, beliefs which the elite can proffer at low cost but which have negative consequences when adopted by working and lower classes. Tariffs aren’t great for the US but the US is so large and rich we can handle it but if the idea is adopted by poorer nations it will be much worse for them. I wish I had been clever enough to say this during the podcast but I never know what Tyler will say in advance.
Here’s another bit:
TABARROK: Here’s the question which the Trumpers or other people never really answer is, what are we going to have less of? Yes, we’ll have more investment. Let’s say we get another auto plant. The unemployment rate is 4%, so it’s not like we have a lot of free resources around. Most of the time, we’re in full equilibrium. If we have more auto plant workers and more cars being produced in the United States, we’re going to have less of something. I think it is incumbent on people who want tariffs in order to get more employment in manufacturing or something like that to say, “Well, what are we going to have less of?”
COWEN: The more sophisticated ones of them, I think, would say, well, the US is super high on the consumption scale, even relative to our very high per capita incomes. If we end up spending some of that consumption on boosting real wages, it’s actually a good investment, if only in political sanity, stability, fewer opioid deaths. It’s a very indirect chain of reasoning. I would say I’m skeptical. Again, it’s not a crazy argument. It’s a weird kind of industrial policy where you channel resources away from consumption into investment and higher wages. A lot of those plants are automated. They’re going to be automated much yet. It’s further stuff, maybe to other robotics companies or the AI companies. Again, I think that’s what they would say.
TABARROK: I don’t think they would say that.
COWEN: No, the more sophisticated ones.
TABARROK: Are there? I haven’t seen too many of those….
Here’s the episode. Subscribe now to take a small step toward a much better world: Apple Podcasts | Spotify | YouTube.
Waymo
Waymo now does highways in the Bay area.
Expanding our service territory in the Bay Area and introducing freeways is built on real-world performance and millions of miles logged on freeways, skillfully handling highway dynamics with our employees and guests in Phoenix, San Francisco, and Los Angeles. This experience, reinforced by comprehensive testing as well as extensive operational preparation, supports the delivery of a safe and reliable service.
The future is happening fast.
Prediction markets in everything? Tariff refund edition
Oppenheimer changed its terms from offers earlier this year. The firm said it would consider bids starting at 20 percent per refund claim pertaining to “reciprocal” or IEEPA tariffs and 10 percent for tariffs tied to fentanyl.
Gabriel Rodriguez, the president and co-founder of A Customs Brokerage, in Doral, Fla., and a recipient of several emails from Oppenheimer, said he believed Oppenheimer was offering to pay the equivalent of 80 cents on the dollar per claim.
Here is more from the NYT, via Amy.
UCSD Faculty Sound Alarm on Declining Student Skills
The UC San Diego Senate Report on Admissions documents a sharp decline in students’ math and reading skills—a warning that has been sounded before, but this time it’s coming from within the building.
At our campus, the picture is truly troubling. Between 2020 and 2025, the number of freshmen whose math placement exam results indicate they do not meet middle school standards grew nearly thirtyfold, despite almost all of these students having taken beyond the minimum UCOP required math curriculum, and many with high grades. In the 2025 incoming class, this group constitutes roughly one-eighth of our entire entering cohort. A similarly large share of students must take additional writing courses to reach the level expected of high school graduates, though this is a figure that has not varied much over the same time span.
Moreover, weaknesses in math and language tend to be more related in recent years. In 2024, two out of five students with severe deficiencies in math also required remedial writing instruction. Conversely, one in four students with inadequate writing skills also needed additional math preparation.
The math department created a remedial course, only to be so stunned by how little the students knew that the class had to be redesigned to cover material normally taught in grades 1 through 8.
Alarmingly, the instructors running the 2023-2024 Math 2 courses observed a marked change in the skill gaps compared to prior years. While Math 2 was designed in 2016 to remediate missing high school math knowledge, now most students had knowledge gaps that went back much further, to middle and even elementary school. To address the large number of underprepared students, the Mathematics Department redesigned Math 2 for Fall 2024 to focus entirely on elementary and middle school Common Core math subjects (grades 1-8), and introduced a new course, Math 3B, so as to cover missing high-school common core math subjects (Algebra I, Geometry, Algebra II or Math I, II, III; grades 9-11).
In Fall 2024, the numbers of students placing into Math 2 and 3B surged further, with over 900 students in the combined Math 2 and 3B population, representing an alarming 12.5% of the incoming first-year class (compared to under 1% of the first-year students testing into these courses prior to 2021)
(The figure gives some examples of remedial class material and the percentage of remedial students getting the answers correct.)
The report attributes the decline to several factors: the pandemic, the elimination of standardized testing—which has forced UCSD to rely on increasingly inflated and therefore useless high school grades—and political pressure from state lawmakers to admit more “low-income students and students from underrepresented minority groups.”
…This situation goes to the heart of the present conundrum: in order to holistically admit a diverse and representative class, we need to admit students who may be at a higher risk of not succeeding (e.g. with lower retention rates, higher DFW rates, and longer time-to-degree).
The report exposes a hard truth: expanding access without preserving standards risks the very idea of a higher education. Can the cultivation of excellence survive an egalitarian world?
Solve for the NIMBY equilibrium?
We are just beginning to think these issues through:
The government’s plan to use artificial intelligence to accelerate planning for new homes may be about to hit an unexpected roadblock: AI-powered nimbyism.
A new service called Objector is offering “policy-backed objections in minutes” to people who are upset about planning applications near their homes.
It uses generative AI to scan planning applications and check for grounds for objection, ranking these as “high”, “medium” or “low” impact. It then automatically creates objection letters, AI-written speeches to deliver to the planning committees, and even AI-generated videos to “influence councillors”.
Kent residents Hannah and Paul George designed the system after estimating they spent hundreds of hours attempting to navigate the planning process when they opposed plans to convert a building near their home into a mosque.
Here is the full story. Via Aaron K.
Mexico estimates of the day
Ms Sheinbaum’s government says Mexico’s murder rate has come down by 32% in the year since she took office. Analysis by The Economist confirms that the rate has fallen, though by a significantly smaller margin, 14%. Counting homicides alone misses an important part of the picture, namely the thousands of people who disappear in Mexico every year, many of whom are killed and buried in unmarked graves. A broader view of deadly crime that includes manslaughter, femicide and two-thirds of disappearances (the data for disappearances is imperfect), shows a more modest decline of 6% (see chart). Still, Mexico is on track for about 24,300 murders this year, horribly high, but well below the recent annual average of slightly over 30,000. Ms Sheinbaum is the first Mexican leader in years to push violent crime in the right direction.
Here is more from The Economist.