Category: Current Affairs
Updates
In a justified resurgence of interest in the topic, The Telegraph covers the Rotherham scandals. Liz Truss has spoken up too. This is not a welcome issue for Starmer, to say the least. No matter what you think he did/did not do wrong in this matter, he cannot come out ahead. One implication is that ethnic enclaves sometimes are a big mistake, and that suburban sprawl is underrated. Note that Pakistanis in the United States have median income above the U.S. average, and comparable to other Asians.
Elsewhere, Thierry Breton remains an Ayn Rand villain.
That’s all.
Africa facts of the day
This corridor of conflict stretches across approximately 4,000 miles and encompasses about 10% of the total land mass of sub-Saharan Africa, an area that has doubled in just three years and today is about 10 times the size of the U.K., according to an analysis by political risk consulting firm Verisk Maplecroft…
Africa is now experiencing more conflicts than at any point since at least 1946, according to data collected by Uppsala University in Sweden and analyzed by Norway’s Peace Research Institute Oslo. This year alone, experts at the two institutes have identified 28 state-based conflicts across 16 of the continent’s 54 countries, more than in any other region in the world and double the count just a decade and a half ago. That tally doesn’t include conflicts that don’t involve government forces, for instance between different communities, and whose number has also doubled since 2010…
The continent is now home to nearly half of the world’s internally displaced people, some 32.5 million at the end of 2023. That figure has tripled in just 15 years.
Here is more from Gabriele Steinhauser, Andrew Barnett, and Emma Brown at the WSJ. In my view, people are not taking these developments seriously enough.
The Cows in the Coal Mine
I remain stunned at how poorly we are responding to the threat from H5N1. Our poor response to COVID was regrettable but perhaps understandable given the US hadn’t faced a major pandemic in decades. Having been through COVID, however, you would think that we would be primed. But no. Instead of acting aggressively to stop the spread in cows we took a gamble that avian flu would fizzle out. It didn’t. California dairy herds are now so awash in flu that California has declared a state of emergency. Hundreds of herds across the United States have been infected.
I don’t think we are getting a good picture of what is happening to the cows because we don’t like to look too closely at our food supply. But I reported in September what farmers were saying:
The cows were lethargic and didn’t move. Water consumption dropped from 40 gallons to 5 gallons a day. He gave his cows aspirin twice a day, increased the amount of water they were getting and gave injections of vitamins for three days.
Five percent of the herd had to be culled.
“They didn’t want to get up, they didn’t want to drink, and they got very dehydrated,” Brearley said, adding that his crew worked around the clock to treat nearly 300 cows twice a day. “There is no time to think about testing when it hits. You have to treat it. You have sick cows, and that’s our job is to take care of them.”
Here’s another report from a vet:
…the scale of the farmers’ efforts to treat the sick cows stunned him. They showed videos of systems they built to hydrate hundreds of cattle at once. In 14-hour shifts, dairy workers pumped gallons of electrolyte-rich fluids into ailing cows through metal tubes inserted into the esophagus.
“It was like watching a field hospital on an active battlefront treating hundreds of wounded soldiers,” he said.
Here’s Reuters:
Cows in California are dying at much higher rates from bird flu than in other affected states, industry and veterinary experts said, and some carcasses have been left rotting in the sun as rendering plants struggle to process all the dead animals.
…Infected herds in California are seeing mortality rates as high as 15% or 20%, compared to 2% in other states, said Keith Poulsen, a veterinarian and director of the Wisconsin Veterinary Diagnostic Laboratory who has researched bird flu.
The California Department of Food and Agriculture did not respond to questions about the mortality rate from bird flu.
Does this remind you of anything? Must we wait until the human morgues are overrun?
The case fatality rate for cows appears to be low but significant, perhaps 2%. A small number of pigs have also been infected. On the other hand, over 100 million chickens, turkeys and ducks have been killed or culled.
There have now been 66 cases in humans in the US. Moreover, the CDC reports that in at least one case the virus appears to have evolved within its human host to become more infectious. We don’t know that for sure but it’s not good news. Recall that in theory a single mutation will make the virus much more capable of infecting humans.
When I wrote on December 1 that A Bird Flu Pandemic Would Be One of the Most Foreseeable Catastrophes in History Manifold Markets was predicting a 9% probability of greater than 1 million US human cases in 2025. Today the prediction is at 20%.
Once again, we may get lucky and that is still the way to bet but only the weak rely on luck. Strong civilizations don’t pray for luck. They crush the bugs. So far, we are not doing that.
Happy new year.
Joseph Walker on Australian migration (from my email)
I argued a few days ago that attacks on less skilled immigration might spill over and through contagion effects cause negative attitudes about immigration more generally. At which point I received the following from Joseph:
Australia, I think, shows the contagion effects are a big deal.
We have one of the most skill-biased immigration programs in the world and also one of the most successful approaches to cultural integration in the world.
A significant chunk of our net migration comes in the form of overseas students, who can be put on a pathway to permanent residence and citizenship after completing their degrees. (This program was introduced in 2001, largely to slow our population ageing.)
The international students cross-subsidise the domestic ones, and education is now Australia’s third biggest export after coal and iron ore.
Like the rest of the Anglosphere, our housing market is broken, but this can’t mostly be blamed on international students, since they don’t add to demand for the kinds of housing people are concerned about.
And yet the discourse has soured completely on migrants, especially international students.
A lot of Australian influencers copy and paste US anti-immigration talking points, even though they don’t really map over.*
(As it happens, I’ll be interviewing one of the key architects of Australia’s modern migration system in a live salon in January: https://events.humanitix.com/joe-walker-podcast-abul-rizvi.)
*To be sure, there are valid criticisms of Australian migration policy. Most notably, net migration was mismanaged and unsustainably high over the past two years, driven by a post-pandemic surge in students. In 2022-23, it exceeded 500,000 people (for context: this number is unprecedented and about double pre-pandemic levels). There has also been exuberance and an erosion of academic standards in the university sector. But these mistakes are being addressed, and the broader negativity I’m observing seems unlikely to be appeased by fixing them.
What are some remaining obstacles for Milei? (from the comments)
Argentina facts of the day
Argentina’s bonds have already rallied dramatically. One gauge of the nation’s hard-currency debt, the ICE BofA US Dollar Argentina Sovereign Index, has generated a total return of about 90% this year.
Meanwhile, the S&P Merval Index has risen more than 160% this year through Monday, far outpacing stock benchmarks in developed, emerging and frontier markets alike. Adjusting for currency differences, the index is still up more than 100% in U.S. dollar terms. For comparison, the S&P 500 is up 25% over the same period.
Here is more from the WSJ. The chance of Milei succeeding is now above fifty percent.
When should DOGE scream in public and push for maximum transparency?
Here is a tweet from Elon, I won’t reproduce it directly on MR. Suffice to say it is strongly worded on the visas issue. Here is a summary of that debate. Much of it is about who should rise or fall in status (duh).
I have some simple, to the point free advice for the DOGERs — the public is not always with you. Making your fight more public, and putting it more on social media, is no guarantee of victory, and indeed it often boosts the chance you will lose or be stymied.
Right now there is an anti-immigration mood, for better or worse, in many countries. But how many voters (former immigrants aside) know what these different types of visas mean, or how many o1s are given out in a year? Yet a lot of influential tech people, and tech donors, know this information pretty well.
So in a non-public fight, you have a big advantage. Trump could maintain or up the number of o1 visas, or make other changes to please the tech people, and few MAGA voters would be very aware of this. But when you scream about this issue, and make it A BATTLE, suddenly it becomes “your pro-immigration sentiment vs. the anti-immigration sentiment of the voters.”
And that is a fight which is very easy to lose. It becomes “The Current Thing,” and everyone is paying attention to the new status game.
So please develop a better sense of when to keep your mouths shut and work behind the scenes.
Is there an intermediate position on immigration?
It is a common view, especially on the political right, that we should be quite open to highly skilled immigrants, and much less open to less skilled immigrants. Increasingly I am wondering whether this is a stable ideological equilibrium.
To an economist, it is easy to see the difference between skilled and less skilled migrants. Their wages are different, resulting tax revenues are different, and social outcomes are different, among other factors. Economists can take this position and hold it in their minds consistently and rather easily (to be clear, I have greater sympathies for letting in more less skilled immigrants than this argument might suggest, but for the time being that is not the point).
The fact that economists’ intuitions can sustain that distinction does not mean that public discourse can sustain that distinction. For instance, perhaps “how much sympathy do you have for foreigners?” is the main carrier of the immigration sympathies of the public. If they have more sympathies for foreigners, they will be relatively pro-immigrant for both the skilled and unskilled groups. If they have fewer sympathies for foreigners, they will be less sympathetic to immigration of all kinds. Do not forget the logic of negative contagion.
You also can run a version of this argument with “legal vs. illegal immigration” being the distinction at hand.
Increasingly, I have the fear that “general sympathies toward foreigners” is doing much of the load of the work here. This is one reason, but not the only one, why I am uncomfortable with a lot of the rhetoric against less skilled immigrants. It may also be the path toward a tougher immigration policy more generally.
I hope I am wrong about this. Right now the stakes are very high.
In the meantime, speak and write about other people nicely! Even if you think they are damaging your country in some significant respects. You want your principles here to remain quite circumscribed, and not to turn into anti-foreigner sentiment more generally.
Steve Davis, Elon Musk’s Go-To Cost-Cutter Is Working for DOGE
A Bloomberg profile of the excellent Steve Davis:
Elon Musk’s deputy Steve Davis has spent more than 20 years helping the billionaire cut costs at businesses like SpaceX, the Boring Company and Twitter ….[now] Davis is helping recruit staff at DOGE, Musk’s effort to reduce government waste, in addition to his day job as president of Musk’s tunneling startup, the Boring Company.
At Boring, Davis has a reputation for frugality, signing off on costs as low as a few hundred dollars, according to people familiar with the conversations — unusual for a company that has raised about $800 million in capital. He also drives hard bargains with suppliers of products like raw steel, sensors, or even items as small as hose fittings, said the people, who asked not to be identified discussing private information.
His favorite directive for staff doing the negotiations: “Go back and ask again.”
…Davis started working for Musk in 2003, when he joined SpaceX, at the time a new company. He had just earned a master’s degree in aerospace engineering from Stanford University, and distinguished himself at the startup by solving hard engineering problems. At one point, Musk tasked the engineer with finding a cheaper alternative to a part that cost $120,000. Davis spent weeks on the challenge and figured out how to do it for $3,900, according to a biography of Musk. (Musk emailed back one word: “Thanks.”)
…Multitasking has proved a Davis signature, dating back to his student days. While he was working on his doctorate in economics at George Mason University in Fairfax, Virginia, Davis was working full time at SpaceX and owned a frozen-yogurt shop called Mr. Yogato in Washington’s Dupont Circle. Alex Tabarrok, one of Davis’ professors, remembers him juggling the multiple roles.
“I told him, ‘Look, you’re getting a Ph.D., you can’t be having a job and running a business at the same time,” Tabarrok recalls. “Focus on getting your Ph.D.”
But Davis declined to give up any of his pursuits, at one time incorporating business trends at Mr. Yogato into an academic paper and bringing some yogurt into class for sampling. Tabarrok can’t recall Davis’ grades, but says he stood out anyway. He “had so much energy, and was so entrepreneurial,” Tabarrok says. “It’s been kind of exciting to see him become one of Elon’s most trusted right-hand men.”
Davis’s GMU training in political economy will serve him very well in Washington.
See also my previous post, an MR classic, Why We Can’t Have Nice Things–Elon Musk and the Subways.
Addendum: 2013 profile of Steve and another of his businesses, Thomas Foolery a bar in DC where you paid for drinks according to plinko. Hat tip: Kevin Lewis.
The New FDA and the Regulation of Laboratory Developed Tests
The FDA under President Trump and new FDA head Martin Makary should rapidly reverse the FDA’s powergrab on laboratory developed tests. To recap, laboratory developed tests (LDTs) are the kind your doctor orders, they are a service not a product and are not sold directly to patients. Congress has never given the FDA the authority to regulate LDTs. Indeed, in 2015, Paul Clement, the former US Solicitor General under George W. Bush, and Laurence Tribe, a leading liberal constitutional lawyer, wrote an article that rejected the FDA’s claims writing that the “FDA’s assertion of authority over laboratory-developed testing services is clearly foreclosed by the FDA’s own authorizing statute” and “by the broader statutory context.”
Moreover, in addition to legal reasons there are sound public policy reasons to reject FDA regulation of LDTs. Lab developed tests have never been FDA regulated, except briefly during the pandemic when the FDA used the declaration of emergency to issue so-called “guidance documents” saying that any SARS-COV-II test had to be pre-approved by the FDA. Thus, the FDA reversed the logic of emergency. In ordinary times, pre-approval was not necessary but when speed was of the essence it became necessary to get FDA pre-approval. The FDA’s pre-approval process slowed down testing in the United States and it wasn’t until after the FDA lifted its restrictions in March that tests from the big labs became available.
In a remarkably prescient passage, Clement and Tribe (2015, p. 18) had warned of exactly this kind of delay:
The FDA approval process is protracted and not designed for the rapid clearance of tests. Many clinical laboratories track world trends regarding infectious diseases ranging from SARS to H1N1 and Avian Influenza. In these fast-moving, life-or-death situations, awaiting the development of manufactured test kits and the completion of FDA’s clearance procedures could entail potentially catastrophic delays, with disastrous consequences for patient care.
We are seeing the same kind of FDA-caused delay for tests for bird-flu.
Moreover, unlike some of the proposals associated with incoming HHS head Robert Kennedy, reversing the FDA on lab-developed tests has significant support from a wide-variety of experts. Here, for example, is the American Hospital Association:
…we strongly believe that the FDA should not apply its device regulations to hospital and health system LDTs. These tests are not devices; rather, they are diagnostic tools developed and used in the context of patient care. As such, regulating them using the device regulatory framework would have an unquestionably negative impact on patients’ access to essential testing. It would also disrupt medical innovation in a field demonstrating tremendous benefits to patients and providers.
The Trump administration has a number of options:
…the LDT Final Rule was promulgated in time to escape Congressional Review Act scrutiny; however, the executive branch and a Republican-controlled Congress have other tools to limit or vitiate FDA’s authority. These include, in no particular order:
The U.S. Department of Health and Human Services (HHS) could revoke the LDT Final Rule. The recission of a rule is treated the same as the promulgation of a new rule. If HHS revokes the final rule, the cases will likely be dismissed as moot. The timing of such action is uncertain at this time.
FDA could extend or revise its policies of enforcement discretion. LDTs are currently subject to FDA’s phaseout policy which has five stages, the last of which begins in May 2028. Specific categories of IVDs will continue under an enforcement discretion policy indefinitely as described in the preamble to the final rule. HHS could quickly issue such a revised policy or policies without prior public comment if it determines such policy meets the threshold in 21 CFR 10.115(g)(2).
Congress could act. With a Republican-controlled House and Senate to start the new Trump administration, there is a chance that efforts to legislate the regulation of LDTs could be reignited. Based on prior congressional efforts, it is likely that such legislation would place LDTs under control by CMS and CLIA, rather than require LDTs to comply with FDA requirements.
HHS could let the litigation continue. The new administration may view the U.S. District Court for the Eastern District of Texas to be sympathetic to the Plaintiffs’ arguments and therefore proceed unabridged assuming the final rule will be struck-down, if that is indeed the deregulatory objective of the new administration.
The U.S. Department of Justice (DOJ) could act concerning the litigation. DOJ options are constrained by ethics rules but DOJ could request to amend its filings, pause the case pending rule-making proceedings, or take other actions intended to stall or moot the litigation in a deregulatory fashion.
Merry Christmas!
Wishing all our readers a wonderful day and New Year!
Jefferson’s DOGE (that was then, this is now)
Jefferson swiftly undid twelve years of Federalism. He allowed the Sedition Act to expire and adopted a more catholic naturalization law. He reduced the federal bureaucracy — small even by today’s standards — particularly in the Treasury Department (a slap at Hamilton, who had been Secretary under Washington), slashing the number of employees by 40 percent and eliminating tax inspectors and collectors altogether. He cut the military budget in half, which was then 40 percent of the overall federal budget. He eliminated all federal excise taxes, purging the government of what he called Hamilton’s “contracted, English, half-lettered ideas.” Reluctantly he kept the First Bank of the United States, but paid off nearly half the national debt. “No government in history,” the historian Gordon S. Wood has observed, “had ever voluntarily cut back on its authority.”
That is from the new and very good book Martin van Buren: America’s First Politician, by James M. Bradley. Later things were different:
Martin van Buren went into office deermined to avoid Andrew Jackson’s fateful staffing mistakes. The backbiting and intrigue wasted two years of Jackson’s presidency. This van Buren could not afford.
And a wee bit later:
Then the voters had their say. The November elections in New York were an absolute bloodbath for the Democrats. There were 128 elections for assembly in 1837, and the Whigs won 101 of them.
The book is well-written.
Stephen Miran nominated to head the CEA
Here is Stephen on Twitter, Harvard PhD, mostly he has been in the private sector. The NYT has further information.
Via Jon Hartley.
The show so far, DOGE edition
Round one is over, and so far no progress and indeed steps backwards:
President-elect Donald Trump’s last-minute demands for a congressional funding package were rejected by dozens of Republicans this week, foreshadowing the legislative challenges he could face next year — even with unified GOP control.
The Republicans also revealed they are not willing to shut down the government, and they do not have such a stable coalition in the House, and that is even before they lose some number of seats.
The package that passed the House includes more than $110 billion in disaster aid and a one-year farm bill extension but is stripped of Trump’s demand: a debt limit extension.
There was not an actual substantive win in the final outcome. Not surprisingly, the Democrats are touting it as a win for the Democrats.
And here Vivek concedes the loss.
I very much hope DOGE makes progress on its key issues — excess regulation and spending — but political change is tough and requires some highly unusual and idiosyncratic skills. Keep also in mind that while Trump has a mandate to attack Woke and secure the border, voters seem far less excited by cutting back on government spending and regulation (if anything the opposite?). Government spending is what “makes Washington go round,” and Reps love it, no matter what they may say in some of their more manufactured moments. So DOGE strategy will need to adjust accordingly.
*The Triumph of Politics*
The author is David A. Stockman, and the subtitle is Why the Reagan Revolution Failed. This is for me a re-read, all DOGErs and aspiring DOGErs should give this book an initial read, as it covers why the Reagan attempts to pare back government largely failed. Excerpt:
But I hadn’t recoked that there would be so much opposition on our side of the aisle. I was shocked to find that the Democrats were geting so much Republican help in their efforts to keep the pork barrel flowing and the welfare state intact. I had been worried because the votes didn’t add up, not the economic plan.
I had also come to realize that in my haste to get the Reagan Revolution launched in February, we had moved too fast. There were numerous loose ends. The spending reductions needed to pay for the tax cuts had turned out to be even bigger and tougher than I had originally thought.
And:
Over the next eight months, the President’s pen remained in his pocket. He did not veto one single appropriations bill, all of which combined came in $10 billion [sic] over the line. Come to think of it, he did use his pen — to sign them.
Stockman of course was what you might call the DOGE leader of the early 1980s. His final take is that the Reagan Revolution failed because it misunderstood what the American people truly want from their government. For better or worse, they want privilege and also protection from misfortune, not efficiency or maximum economic growth.
Essential reading, for some of you.
That is from EB-CH, a cranky guy but sometimes he has good points. There are (at least) two additional problems<:
1. First, a global recession could scuttle the whole thing on the revenue side.
2. Second, Argentina (not blaming Milei here, I think he understands this) has a tendency to give up on its adjustment programs too early. A temporarily balanced budget does not reflect how a tanking of commodity prices (combined perhaps with other problems) could lead to a future financial crisis once again. The fiscal configuration has to be not only “good enough for now” but truly stress tested. Is the political system down there strong enough to see that through? I suppose we will find out.