Category: Law

US Pandemic Policy: Failures, Successes, and Lessons

My talk at Bowling Green State University on US Pandemic Policy: Failures, Successes, and Lessons

This was not a black swan event. This was an entirely predicted and predictable event. We knew it was going to happen….And yet, we weren’t ready.

I am told that my talk made many people angry (not at me, natch).

My Conversation with the excellent Sam Bankman-Fried

Here is the audio, video, and transcript.  Here is part of the summary:

He joined Tyler to discuss the Sam Bankman-Fried production function, the secret to his trading success, how games like Magic: The Gathering have shaped his approach to business, why a legal mind is crucial when thinking about cryptocurrencies, the most important thing he’s learned about managing, what Bill Belichick can teach us about being a good leader, the real constraints in the effective altruism space, why he’s not very compelled by life extension research, challenges to his Benthamite utilitarianism, whether it’s possible to coherently regulate stablecoins, the implicit leverage in DeFi, Elon Musk’s greatest product, why he thinks Ethereum is overrated, where in the world has the best French fries, why he’s bullish on the Bahamas, and more.

And an excerpt:

COWEN: Now, for mathematical finance, as you know, we at least pretend we can rationally price equities and bonds. People started with CAPM. It’s much more complicated than that now. But based on similar kinds of ideas — ultimately arbitrage, right? — if you think of crypto assets, do we even have a pretense that we have a rational theory of how they’re priced?

BANKMAN-FRIED: With a few of them, not with most. In particular, let’s talk about Dogecoin for a second, which I think is the purest of a type of coin, of the meme coin. I think the whole thing with Dogecoin is that it does away with that pretense. There is no sense in which any reasonable person could look at Dogecoin and be like, “Yes, discounted cash flow.” I think that there’s something bizarre and wacky and dangerous, but also powerful about that, about getting rid of the pretense.

I think that’s one example of a place where there is no pretense anymore that there is any real sense of how do you price this thing other than supply and demand, like memes versus — I don’t know — anti-memes? I think that more generally, though, that’s happened to a lot of assets. It’s just less explicit in a lot of them.

What is Elon Musk’s greatest product ever, or what’s his most successful product ever? I don’t think it’s an electric car. I don’t think it’s a rocket ship. I think one product of his has outperformed all of his other products in demand, and that’s TSLA, the ticker. That is his masterpiece. How is that priced? I don’t know, it’s worth Tesla. It’s a product people want, Tesla stock.

COWEN: But the prevalence of memes, Dogecoin, your point about Musk — which I would all accept — does that then make you go back and revisit how everything else is priced? The stuff that was supposed to be more rational in the first place — is that actually now quite general, and you’ve seen it through crypto? Or not?

BANKMAN-FRIED: Absolutely. It absolutely forces you to go back and say, “Well, okay, that’s how cryptocurrencies are priced. Is it really just crypto that’s priced that way?” Or maybe, are there other asset classes that may claim to have some pricing, or purport to, or people may often assume it does, but which in practice is not exactly that? I think the answer to that is a pretty straightforward yes.

It’s a pretty straightforward answer that you look at Tesla, you look at a lot of stocks right now, you think about what determines their market cap — the discounted cash flow? Yeah, sort of, that plays a role in it. That’s 30 percent of the answer. It’s when we look at the meme stocks and the meme coins that we feel like we can see the answer for ourselves for the first time, but it was always there in the other stocks as well, and social media has been amplifying this all over the place.

COWEN: Is this a new account of how your background as a gamer with memes has made you the appropriate person for pricing and arbitrage in crypto?

BANKMAN-FRIED: Yeah, there’s probably some truth to that. [laughs]

Interesting throughout, and not just for crypto fans.

What should I ask Jamal Greene?

I will be doing a CWT for him, here is part of his Wikipedia page:

Jamal K. Greene is an American legal scholar whose scholarship focuses on constitutional law. He is the Dwight Professor of Law at Columbia Law School. Greene is one of four co-chairs of Facebook‘s Oversight Board, a body that adjudicates Facebook’s content moderation decisions…

He obtained an AB from Harvard College in 1999, where he was a sports writer for The Harvard Crimson. One of his last pieces for that publication reflected on his experience as a “black kid from Brooklyn” spending four years “in the Ivy bubble”.

After graduation, Greene worked at Sports Illustrated. He received a JD from Yale Law School in 2005 and clerked for Judge Guido Calabresi of the United States Court of Appeals for the Second Circuit, from 2005 to 2006, and for Justice John Paul Stevens of the Supreme Court of the United States, from 2006 to 2007.

Greene is the author of How Rights Went Wrong: Why Our Obsession With Rights Is Tearing America Apart (2021). The book argues that United States constitutional law inappropriately grants strong protection to a small set of constitutional rights, as opposed to more limited protection to a broader set of rights.[ He further argues that this approach has hardened positions and reduced the ability for those with differing views to compromise. The work praises proportionality review as an alternative to American constitutional adjudication.

His additional writings in articles and book chapters include: “Selling Originalism”; “Giving the Constitution to the Courts”, a review of Keith E. Whittington’s Political Foundations of Judicial Supremacy: The Presidency, The Supreme Court, and Constitutional Leadership in U.S. History; “Beyond Lawrence: Metaprivacy and Punishment”; “Lawrence and the Right to Metaprivacy”; “Divorcing Marriage from Procreation”; “Judging Partisan Gerrymanders Under the Elections Clause”; “Hands Off Policy: Equal Protection and the Contact Sports Exemption of Title IX”; and “Disappearing Dilemmas: Judicial Construction of Ethical Choice as Strategic Behavior in the Criminal Defense Context”.

So what should I ask him?

Has the New Jersey libertarian moment arrived?

For 73 years, drivers in New Jersey have been barred from pumping their own gas. It’s the only state in the nation that doesn’t allow it at all. Now, after an aborted attempt in 2015, the state’s gas station industry is again pushing to repeal that law, endangering the state’s unofficial motto: “Jersey girls don’t pump their own gas.”

…Under the new bill, New Jerseyans would be allowed to pump their own gas, but stations with more than four pumps would be required to have a full-service option, presumably at a higher price. Those pushing the change say a national workforce shortage has made it more difficult to hire station attendants, a reality that can lead to long lines at the pumps or even force some stores to limit their hours…

New Jersey’s ban on self-serve gas dates back to the 1949 Retail Gasoline Dispensing Safety Act, which cited, among other things, fire hazards and exposure to toxic fumes, “particularly in the case of pregnant women.”

Full-service gas stations were the norm then. But as gas pumps became more modern, and cars got safer, most Americans got accustomed to serving up their own fuel.

But not in New Jersey.

Yet there is no guarantee the new initiative will pass.  Here is the full Politico article, with the link and concept from Jacob Grier.

How is U.S. urban public safety changing?

This paper argues that changes in human activity during the COVID-19 pandemic led to an unusual divergence between crime rates and victimization risk in US cities. Most violent crimes declined during the pandemic. But analysis using foot traffic data shows that the risk of street crime victimization was elevated throughout 2020; people in public spaces were 15-30 percent more likely to be robbed or assaulted. This increase is unlikely to be explained by changes in crime reporting or selection into outdoor activities by potential victims. Traditional crime rates may present a misleading view of recent changes in public safety.

Here is the paper by Maxim Massenkopf and Aaron Chalfin, via the excellent Samir Varma.

Against alcohol, #6437

This paper evaluates the impact of a sudden and unexpected nation-wide alcohol sales ban in South Africa. We find that this policy causally reduced injury-induced mortality in the country by at least 14% during the five weeks of the ban. We argue that this estimate constitutes a lower bound on the true impact of alcohol on injury-induced mortality. We also document a sharp drop in violent crimes, indicating a tight link between alcohol and aggressive behavior in society. Our results underscore the severe harm that alcohol can cause and point towards a role for policy measures that target the heaviest drinkers in society.

That is new research from Kai Barron, Charles D.H. Parry, Debbie Bradshaw, Rob Dorrington, Pam Groenewald, Ria Laubscher, and Richard Matzopoulos.  To be clear, the “policy measure” I favor is absolute individual boycott, not some kind of soporific Pigouvian tax scheme that won’t attract any real extra attention.

Elite high school TJ will continue as it was

Fed. judge holds that Fairfax County, Virginia violated 14A by changing its high-ranked magnet school’s admission policies to decrease the proportion of Asian-American students. Strict scrutiny applies, and racial balancing is not a compelling interest.

The thread is of interest more generally, for instance “…the county officials here perceived that racial balancing was the goal because they got that cue from state-level Education officials on a DEI taskforce.”

I have been predicting privately for a while that TJ would be saved.  I’ll say it again: I think Wokeism has peaked, and the conflict in Ukraine will make it seem all the less relevant.

The GEZ: A Digital Special Zone

The Catawba are a federally recognized tribe of Native Americans with land in South Carolina, near the city of Rock Hill. The Catawba nation has just voted to establish a new digital special economic zone, the Green Earth Zone (GEZ), which aims to specialize in fintech and cryptocurrency.

…The GEZ can be prosperous thanks to the ability of Native-American Tribes under US law to have their own commercial code, regulation-making and administrative capacities.

…Using a model similar to Estonia’s eResidency, after completing the ‘know your customer’ (KYC) requirements, anyone in the world will be able to set up an eCorporation online in the GEZ, and take advantage of policies and regulations that allow them to safely manage their digital assets, raise investment capital and offer digital-banking services. eCorporations are legal corporations, permitted to conduct business virtually from the GEZ, and can open bank accounts within the United States. GEZ eCorporations are ideal for online companies, software developers, remote workers, banking and finance, insurance and firms involved in the creation, sale or management of digital assets.

This is a very interesting development for crypto which needs some legibility and rational rule making that the SEC is not providing.

Trudeau has turned off the invocation of the Emergencies Act

After two days it is no more.  I was and remain completely opposed to this invocation of the emergency powers.  I think they simply should have arrested the protestors early on, before the whole thing became such a big deal.

Here is a good short essay on the “digital jail” created by having your funds frozen in a nearly cashless society.  How is it you are supposed to pay for a lawyer?  What about joint bank accounts with other family members?  The more you think about this option, the worse it gets.

That all said, I have never been sold on the more dramatic claims of the critics.  No, this is not the transition moment for crypto.  Canada has not become a fascist state.  The government made a mistake, and the mistake has been corrected.  They should not have had this power to begin with.

I would stress that eternal vigilance is the price of liberty, and vigilance was needed to push this one back.  But if this was your freakout for the week, most of your attention is directed to the wrong places.

Be Green: Buy an (Australian) Coal Mine!

In Be Green: Buy A Coal Mine! I wrote:

Buying a coal mine and leaving the coal in the ground looks like a cost-effective way of sequestering carbon dioxide.

Recall, the key idea is that there are coal mines that are barely profitable now so shuttering mines can be a cheap way of sequestering carbon dioxide. Well, it’s starting to happen in Australia.

Tech billionaire Mike Cannon-Brookes has teamed up with international fund manager Brookfield to launch an audacious takeover bid for Australian energy giant AGL with the intention of setting stronger emissions-reduction targets and forcing the early closures of its remaining coal-fired power stations.

Mark Carney, former governor of the Bank of England and the Bank of Canada, is also involved. Unclear whether the bid will be accepted. The Australian government is actually against the idea.

Addendum: Philosopher William MacAskill also told me recently that he liked the idea because it would leave a source of energy that could be used to reboot civilization after an existential crisis. Hadn’t thought about that! MacAskill is always thinking ahead.

Hat tip: Sam Roggeveen.

What has been driving America’s opioid problem?

Matt Yglesias had an excellent (gated) Substack on this question lately, now Jeremy Greenwood, Nezih Guner and Karen A. Kopecky have a new and quite valuable paper.  I found this to be the most interesting segment:

Through the eyes of the model, there were two key forces.  The first force is the decline in prices for bot prescription and black market opioids.  This had a big effect.  The second force is the increase in the dosages per prescription meted out by doctors.  This also had a significant impact.  The fact that doctors kept pain sufferers on prescription opioids for a longer period of time had little effect.  Last, an analysis is conducted on medical interventions that reduce either the probability of becoming addicted or the odds of an addict dying from an overdose.  Reducing the odds of addiction can result in even more deaths due to the rise in users.

The opioid problem is a very difficult one to solve!  I should stress that the paper has other results of interest.

*The Invention of Power*

The author is Bruce Bueno de Mesquita, and the subtitle is Popes, Kings, and the Birth of the West.  Here is the main thesis:

Why Europe became distinct after the year 1000 and not before can be reduced to this surprisingly simple reason: in Europe, the head of religion and the head(s) of state were different people who faced off against one another in long-standing, long-lasting, intense competition for political control.  Certainly, the rulers of China and Japan were thought to be gods.

I consider this broadly consistent with my own views, although I see many other significant factors in the broader history, including natural geography and political fragmentation.  Nor can you dismiss the role of imperialism entirely, plus that the growth of the West came “at the right time” (for the West at least).  I like this book, but I don’t think it quite has the knockdown proof of its thesis that it pretends to.  And the book is oddly silent about Christianity as a general phenomenon.  There is talk of popes and churches on almost every page, and yet Christianity as an intellectual innovation, helping to make liberalism more likely, does not play much of a role in the narrative.  And given how general and deeply rooted some of the mechanisms are, I don’t quite understand why so much stress is placed on the 1122 Concordat of Worms — surely that is endogenous too?  It is an odd philosophy of history in which so much hinges on a single event and then for almost a thousand years the rest that follows is locked in.

Against alcohol, part #6437

Utah’s shift to lower the legal limit for a driver’s blood-alcohol concentration successfully reduced car-crash deaths in its first year of adoption, according to a new report from the National Highway Traffic Safety Administration.

The law, which took effect on Dec. 30, 2018, made Utah the only state in the country in which a driver can be arrested for having a blood-alcohol concentration between .05% and .079%.

NHTSA’s report found that fatal car crashes in Utah were down 5.1% in 2019 from the year before the law went into effect. Nationally, fatal car crashes fell 2% in the same period. Fatal crashes in which alcohol was detected dropped to 38 from 56 in 2019, the first time such crashes declined in three years, Utah Highway Safety Office data shows.

Here is more from the WSJ, via Tim Gillespie.