Federal Judge Rejects FDA Power Grab
In Don’t Let the FDA Regulate Lab Tests! and The New FDA and the Regulation of Laboratory Developed Tests I warned that the FDA’s power grab over laboratory developed tests was both unlawful and likely to result in deadly harm (as it did during COVID). Thus, I am pleased that a Federal judge has vacated the FDA’s rule entirely, writing:
…the text, structure, and history of the FDCA and CLIA make clear that FDA lacks the authority to regulate laboratory-developed test services.
…FDA’s asserted jurisdiction over laboratory-developed test services as “devices” under the FDCA defies bedrock principles of statutory interpretation, common sense, and longstanding industry practice.
The judge also noted some of the costs that I had pointed to:
…the Fifth Circuit has made clear that district courts should generally “nullify and revoke” illegal agency action, Braidwood, 104 F.4th at 951. The Court finds that such relief is appropriate here. The final rule will initially impact nearly 80,000 existing tests offered by almost 1,200 laboratories, and it will also affect about 10,013 new tests offered every year going forward. The estimated compliance costs for laboratories across the country will total well over $1 billion per year, and over the next two decades, FDA projects that total costs associated with the rule will range from $12.57 billion to $78.99 billion. FDA acknowledges that the enormous increased costs to laboratories may cause price increases and reduce the amount of revenue a laboratory can invest in creating and modifying tests.
… For these reasons, it is ORDERED that the Laboratory Plaintiffs’ Motions for Summary Judgment, (Dkt. #20, #27), are GRANTED. The final rule is hereby SET ASIDE and VACATED.
HHS head RFK Jr. should immediately instruct the FDA to halt any further efforts to regulate laboratory developed tests.
How Good is AI at Twisting Arms? Experiments in Debt Collection
How good is AI at persuading humans to perform costly actions? We study calls made to get delinquent consumer borrowers to repay. Regression discontinuity and a randomized experiment reveal that AI is substantially less effective than human callers. Replacing AI with humans six days into delinquency closes much of the gap. But borrowers initially contacted by AI have repaid 1% less of the initial late payment one year later and are more likely to miss subsequent payments than borrowers who were always called by humans. AI’s lesser ability to extract promises that feel binding may contribute to the performance gap.
That is from a new paper by James J. Choi, Dong Huang, Zhishu Yang, and Qi Zhang. No AI asked me to run this blog post!
New issue of Econ Journal Watch
Toward Bubble Clarity: An American Economic Review article by Jianjun Miao and Pengfei Wang purports to “provide a theory of rational stock price bubbles.” Here, Tomohiro Hirano and Alexis Akira Toda argue that Miao and Wang’s ‘bubble’ talk is inapt. It is more appropriate to interpret their model as one of multiple fundamental equilibria, where all equilibrium asset prices are equal to the present discounted value of dividends. (Miao and Wang are hereby invited to reply in a future issue of this journal.)
Who Perpetrated the Maidan Massacre? Who Overthrew the Ukrainian Government in 2014? Ivan Katchanovski criticizes Atlantic Council Senior Fellow Adrian Karatnycky, particularly his claims about Maidan in his Yale University Press book Battleground Ukraine: From Independence to War with Russia (2024). (Karatnycky is hereby invited to reply in a future issue of this journal.)
“The silence of these writers is dreadfully expressive”—Burke: David Barker has published five critiques of the temperature~growth literature. None of the commented-on authors has replied (all are listed in Sounds of Silence). Here Barker reflects on the fact that none has engaged his body of work. (The invitation to reply remains open.)
Was Karl Marx’s becoming a big deal destined or adventitious? The debate over a provocative Journal of Political Economy article continues: Joseph Francis rejoins and Phillip Magness and Michael Makovi conclude with a second reply.
Mobile payment adoption and online shopping in China: Muzaffarjon Ahunov and Leo Van Hove criticize an article that found that women consumers do more online shopping expenditure if they have adopted mobile payment instruments, but the result for men was not found. Ahunov and Van Hove point out multiple weaknesses. When they redo the analysis, they find completely different results, both in terms of magnitude and where the gender effect is concerned.
Hello, I’m 1930s America, and I Have a Recovery Problem: George Selgin provides erudite consideration of hypotheses about the recovery, and the non-recovery, of Depression-era America in his book False Dawn: The New Deal and the Promise of Recovery, 1933-1947 (University of Chicago Press, 2025), says Jason E. Taylor in his review essay.
Classical Liberalism in Argentina, from 1884 to 2023: Following up on their previous article treating the 19th century, Alejandro Gómez and Nicolás Cachanosky now continue the story of classical liberalism in Argentina. They highlight the impact of nationalist education reforms starting in 1908, which undermined liberal foundations and contributed to the emergence of Peronism and institutional instability. They highlight key figures such as Alberto Benegas Lynch, Carlos Sánchez Sañudo, and Álvaro Alsogaray. The piece extends the Classical Liberalism in Econ, by Country series.
From Medieval Provincial Law to State Liberalism: Economic Thought in Sweden—that is the English translation of the recent title by the Swedish intellectual historian Lars Magnusson. Here in a review essay, Max Skjönsberg shares key teachings and the progression from mercantilism to a liberal nation-state.
EJW News: “Jason Briggeman, 416 Thank Yous”
EJW Audio:
Ivan Katchanovski on Maidan and Ukraine 2014
Jeffrey Sachs, An Established Anti-Establishment Economist
Nicolás Cachanosky on Liberalism in Argentina from 1816 to 1884
Tuesday assorted links
The Free Press
This is from the Free Press website, written by me, so I will not indent:
The Free Press is where I have decided to make my new intellectual home.
In a rapidly changing world, I feel The Free Press is the correct base for me, and it has the audience I wish to reach.
First, The Free Press is a start-up.
And because The Free Press is a start-up, it can fail. Many people do not like that fact about start-ups, because they do not want to be part of a possible failure. It means disruption, and also the paycheck stops coming. But I enjoy the risk appetite. It is precisely because it can fail that the people here will work harder, and likely smarter, than the competition.
That it is a start-up is not only true in fact, but you sense it the moment you walk into the newsroom, which I did for the first time recently. The place has overwhelming vibes and energy, and you can feel those in each and every person on the floor.
I think we are entering an era where “floor energy” will matter more than before. It will motivate, define, and lift some institutions well above the others.
A lot of The Free Press is charisma- and personality-based. Much of that comes from Bari Weiss, but there are numerous strong personalities on the roster, covering a wide range of topics, and I know they are keen to bring on even more. I expect the importance of charisma- and personality-based content to rise sharply in the near future.
I don’t know if The Free Press knows this yet, because they tend to be old-school, but pretty soon quality AI programs will write better columns than most of what is considered acceptable at top mainstream media outlets. Of course those columns will not be by human beings, and so those writings will not be able to contextualize themselves within the framework of what a particular individual thinks or feels. That kind of context will be all-important, as impersonal content, based on broadly available public information, will be outcompeted by the machines.
I believe The Free Press intellectual and business model is well-positioned to handle this transition. At The Free Press, and for Free Press readers, the individual writer and personality truly matters, and will continue to matter.
I have written for about 10 years for The New York Times and about eight years for Bloomberg Opinion. Both were wonderful experiences, and I worked with great people and benefited enormously from those relationships. But I am now oh, so very excited about this next step.
Stay tuned for my first official column this Thursday. Click here to make sure you get my work delivered directly to your inbox.
Last but not least: Join Bari and me for a livestream Q+A only for paid members of The Free Press. Come to our website on Thursday, April 3 at 4:30 p.m. ET to watch the conversation.
AI Discovers New Uses for Old Drugs
The NYTimes has an excellent piece by Kate Morgan on AI discovering new uses for old drugs:
A little over a year ago, Joseph Coates was told there was only one thing left to decide. Did he want to die at home, or in the hospital?
Coates, then 37 and living in Renton, Wash., was barely conscious. For months, he had been battling a rare blood disorder called POEMS syndrome, which had left him with numb hands and feet, an enlarged heart and failing kidneys. Every few days, doctors needed to drain liters of fluid from his abdomen. He became too sick to receive a stem cell transplant — one of the only treatments that could have put him into remission.
“I gave up,” he said. “I just thought the end was inevitable.”
But Coates’s girlfriend, Tara Theobald, wasn’t ready to quit. So she sent an email begging for help to a doctor in Philadelphia named David Fajgenbaum, whom the couple met a year earlier at a rare disease summit.
By the next morning, Dr. Fajgenbaum had replied, suggesting an unconventional combination of chemotherapy, immunotherapy and steroids previously untested as a treatment for Coates’s disorder.
Within a week, Coates was responding to treatment. In four months, he was healthy enough for a stem cell transplant. Today, he’s in remission.
The lifesaving drug regimen wasn’t thought up by the doctor, or any person. It had been spit out by an artificial intelligence model.
AI is excellent at combing through large amounts of data to find surprising connections.
Discovering new uses for old drugs has some big advantages and one disadvantage. A big advantage is that once a drug has been approved for some use it can be prescribed for any use–thus new uses of old drugs do not have to go through the lengthy and arduous FDA approval procedures. In essence, off-label uses have been safety-tested but not FDA efficacy-tested in the new use. I use this fact about off-label prescribing to evaluate the FDA. During COVID, for example, the British Recovery trial, discovered that the common drug, dexamethasone could reduce mortality by up to one-third in hospitalized patients on oxygen support that knowledge was immediately applied, saving millions of lives worldwide:
Within hours, the result was breaking news across the world and hospitals were adopting the drug into the standard care given to all patients with COVID-19. In the nine months following the discovery, dexamethasone saved an estimated one million lives worldwide.
New uses for old drugs are typically unpatentable, which helps keep them cheap—but the disadvantage is that this also weakens private incentives to discover them. While FDA trials for these new uses are often unnecessary, making development costs much lower, the lack of strong market protection can still deter investment. The FDA offers some limited exclusivity through programs like 505(b)(2), which grants temporary protection for new clinical trials or safety and efficacy data. These programs are hard to calibrate—balancing cost and reward is difficult—but likely provide some net benefits.
The NIH should continue prioritizing research into unpatentable treatments, as this is where the market is most challenged. More broadly, research on novel mechanisms to support non-patentable innovations is valuable. That said, I’m not overly concerned about under-investment in repurposing old drugs, especially as AI further reduces the cost of discovery.
The Research Behavior of Individual Investors
Browser data from an approximately representative sample of individual investors offers a detailed account of their search for information, including how much time they spend on stock research, which stocks they research, what categories of information they seek, and when they gather information relative to events and trades. The median individual investor spends approximately six minutes on research per trade on traded tickers, mostly just before the trade; the mean spends around half an hour. Individual investors spend the most time reviewing price charts, followed by analyst opinions, and exhibit little interest in traditional risk statistics. Aggregate research interest is highly correlated with stock size, and salient news and earnings announcements draw more attention. Individual investors have different research styles, and those that focus on short-term information are more likely to trade more speculative stocks.
That is from a new NBER working paper by Toomas Laarits and Jeffrey Wurgler.
Living in Freiburg, Germany
After two years at Harvard, I had finished all of my graduate school courses and oral (!) exams. Then I had a compulsion for what I should do next, something that at the time appeared remarkably stupid, although it worked out very well for me.
At some critical points in my life I have made key decisions with regard to place, including Mexico, Haiti, New Zealand, and as I will write about today, Freiburg, Germany. Each of those decisions fundamentally reshaped my life. None of those decisions were motivated by rational reasons, or indeed much by traditional reasons at all. I simply wanted to do particular things, and then set off to do so.
After two years of study, a Harvard PhD student would be expected to apprentice with a top professor, “live in the basement of the Science Center” (where the computers were those days), and in general become part of the system. Somehow none of that fit me. I decided instead to study for a year in Freiburg, Germany, at the university there, mostly to learn German but also to run away from a particular kind of fate that most of my peers were choosing. And so I departed from Cambridge in 1984-85, aided by a strong dollar and a small grant from the Claude R. Lambe Foundation.
Other than an Oxford and London summer trip at age 17, it was my first time abroad. I flew over with Kroszner, and we rented a car to drive around Germany for a few weeks before I would settle in Freiburg.
Our first stop was Mainz, which was not too far from Frankfurt airport. I was stunned by everything I saw, ranging from the supermarkets to the food to how the downtown was organized. These days Mainz is regarded as a fairly dull city, but then, for me, it was fascinating beyond belief. Unlike England, Germany struck me as a peer country to the United States, with a roughly equal living standard and in some ways a superior way of life.
Other stops on our trip included the beautiful Baden-Baden, Stuttgart, Cologne, Hamburg, Bremen, the “Romantic Road” in Bavaria, and of course Berlin. The one day I spent in East Berlin terrified me. Not primarily because of the living standards (which were low), but because the people seemed so fearful and intimidated. I decided that communism was far worse than I had thought. I was relieved to return to West Berlin, which at the time had that Cold War, party town, otherworldly feel. Try watching “Wings of Desire” some day.
Once I settled into Freiurg I was on my own. I refused to hang out with the other American students, and so I learned German pretty quickly. I developed a morning routine of walking to buy the International Herald Tribune, working on my dissertation in the morning on a typewriter, and going into town for lunch and some shopping and errands. Freiburg was the closest I ever have come to living in a proper city, though at the time the population was a mere quarter million or so. Nonetheless one could go “in die Stadt,” an entirely meaningful notion if you know the layout.
I even ended up with a German girlfriend, and from her I learned German all that much better.
Frequently I would feel claustrophobic, and so I would depart for Switzerland, where I would feel even more claustrophobic. Still, I loved those trips, as the sense of perpetual motion was sufficient compensation. Over time I have managed to see every Swiss canton, and I am fond of all of them. For Erleichterung I would visit the Netherlands, or one time Chris Weber came by and we drove to Colmar for Alsatian smoked meats, yum. For Thanksgiving there was an Italy trip to Bergamo and Verona. Later in the spring I went to Venice and Florence.
I had a January lecture tour in Vienna (freezing!), with the Carl Menger Institute, and in May a week-long stint in Graz. My German peers found it literally unbelievable that someone my age had published papers I could present and talk about, in addition to a Wall Street Journal Op-Ed on monetary economics.
I also gave a talk at a jazz club in Vienna, the first (but not last) time I experienced talk-giving as a kind of high class entertainment. I mixed German and English, and told a fair number of jokes, and found I enjoyed that. I am thankful to Albert Zlabinger for arranging that evening.
It was that kind of life. There has never been a year that was more exciting or when I learned more about the world.
Art and painting started making sense to me when I visited the Lenbach Haus in Munich, with Blue Rider works, and the Mondrian museum in The Hague. I retain a special fondness for those artists to this day.
Amsterdam probably was my favorite city, though I now feel it is long since ruined by an excess of tourists. To save money, I would sleep on the houseboats there.
Once I tired of German food, delicious though it may be, I started experimenting on the culinary front, at least as much as I could given my location. That was the time in my life when I started trying everything I could.
It simply stunned me how many things in Germany were better, starting with the bread and orange juice and butter, though hardly ending there.
So every day I learned, learned, learned, and was in pretty constant motion.
By the time I returned to the United States, it was clear I would never be entering on mainstream tracks again.
China AI mandate of the day
Schools in Beijing will introduce AI courses and teaching methods into the primary and secondary school curriculum starting September, to nurture young talent and boost growth in the advancing sector.
In a statement shared on its official website on Friday (Mar 7), Chinese education authorities said schools would “explore and build” AI courses while incorporating AI into “after-school services, club activities, research” and other educational systems in the coming fall semester.
Here is the full story, via Wayne Yap.
Monday assorted links
1. Australia fact of the day: “In 2023-24, for the first time, Australia spent more on in-kind benefits (e.g. the NDIS) than on transfers.”
2. Fine-tuned chatbots seem to work as well as humans for mental health treatments in this RCT.
3. The decline in publicly listed companies is microcaps.
5. Is creative destruction from AI showing up in labor market data?
6. AI art is more likely to look like this than like Rembrandt.
Sell Floyd Bennett Field!
I’ve been shouting Sell! for many years. Perhaps now is the chance to do it. Here’s a recap:
The Federal Government owns more than half of Oregon, Utah, Nevada, Idaho and Alaska and it owns nearly half of California, Arizona, New Mexico and Wyoming. See the map (PDF) for more [N.B. the vast majority of this land is NOT parks, AT 2011]. It is time for a sale. Selling even some western land could raise hundreds of billions of dollars – perhaps trillions of dollars – for the Federal government at a time when the funds are badly needed and no one want to raise taxes. At the same time, a sale of western land would improve the efficiency of land allocation.
But it’s not just federal lands in the West. Floyd Bennett Field is an old military airport in Brooklyn that hasn’t been used much since the 1970s. Today, it’s literally used as a training ground for sanitation drivers and to occasionally host radio-controlled airplane hobbyists.
In August 2023, state and federal officials reached an agreement to build a large shelter for migrants at Floyd Bennett Field, amid a citywide migrant housing crisis caused by a sharp increase in the number of asylum seekers traveling to the city. The shelter opened that November, but its remote location deterred many migrants. City officials announced plans in December 2024 to close the shelter.
Floyd Bennett Field is over 1000 acres and should be immediately sold to the highest bidder.
Brad Hargreaves on twitter has a good thread with some more examples.
Addendum: Here’s a NPR article (!) from 10 years ago that I am sure still applies even if not in all details:
Government estimates suggest there may be 77,000 empty or underutilized buildings across the country. Taxpayers own them, and even vacant, they’re expensive. The Office of Management and Budget believes these buildings could be costing taxpayers $1.7 billion a year.
…But doing something with these buildings is a complicated job. It turns out that the federal government does not know what it owns.
…even when an agency knows it has a building it would like to sell, bureaucratic hurdles limit it from doing so. No federal agency can sell anything unless it’s uncontaminated, asbestos-free and environmentally safe. Those are expensive fixes.
Then the agency has to make sure another one doesn’t want it. Then state and local governments get a crack at it, then nonprofits — and finally, a 25-year-old law requires the government to see if it could be used as a homeless shelter.
Many agencies just lock the doors and say forget it.
Rebecca Yarros and the vibe shift
The New York Times has described her recent Onyx Storm as the bestselling adult book of the last twenty years, as the work sold 2.7 million copies in the first week of publication. Out of curiosity I started the book, but it is not for me. It feels like reading a computer game? Grok 3 suggested it attempts to be “adrenaline-fueled,” with “vivid sensory details.” The sex scenes are remarkably explicit for regular popular fiction. The plot is centered around dragons (I did enjoy the first Paolini book).
According to the book jacket, Yarros “loves military heroes” and has six children. One of them was first fostered, and then adopted. She cofounded with her husband a non-profit to help kids in foster care.
And so the vibe shift continues.
Start your podcast (from my email)
This is all from Andrew Mitrak, I will not double indent:
“Back in January, I listened to your interview on the Frames of Space podcast. You shared some advice that I haven’t seen you share elsewhere, so I’m pasting a transcript below here (transcribed with Gemini 2.5 Pro)
Host: Do you see podcasts in general, especially podcasts from academics, as a way to bridge the gap between humanities academia and the real world.
Tyler: I don’t think they need to be from academics. Maybe on average academics are worse at doing podcasts because they are not forced to get to the point by their other training.
But I think if you have good content and a clearly defined niche, you can get considerable mind share from important and influential people by doing podcasts and there’s still room for more.
If you do something Joe Rogan-like you can make a lot of money. That’s not mainly how people can succeed, but if you want an actual audience, I would say try doing a podcast. Just make it good and don’t worry whether or not you’re an academic.
Host: Make it good and make it consistent, and that’s all that matters.
Tyler: And have it, you know, it should have a clear image. So if your podcast is well, you know, I focus on the dobro guitar. Like that’s an obscure thing, right? But in fact, there are people out there who play the dobro. They probably don’t already have their own podcast. And if you’re thinking of doing that, you should do it.
I heard this while I was putting together my own niche podcast about marketing history. I had doubts about whether the podcast was worth pursuing, and your advice hit me at the right time and encouraged me to follow through on it. I’m a few months into the podcast and your advice has proven correct. I get to speak with some of the most interesting authors, academics, and marketers I admire just because I host a podcast. Other important and influential people have discovered my podcast, either organically or through podcast guests sharing the show. It’s not topping the Spotify charts, but these connections have been incredibly rewarding.”
Consistency on taxes and tariffs
Peter Navarro is arguing that the pending tariffs will raise $600 billion a year, which might make them the biggest tax increase in U.S: history. I am completely against this! And for reasons I (and Alex) have explained over the years in dozens of MR posts.
I would like to point out one thing, however, in the interests of consistency. If you too are against the tariffs, and arguing they will raise prices by a noticeable amount, that also means you think most of the tariff will not primarily fall on foreign producers.
In light of that, you might wish to reevaluate your stance on the domestic corporate income tax. Perhaps quite a bit of that tax also does not fall on producers, due to competitive forces.
To be sure, the two cases are not identical. The tariff to some extent hits foreign sellers, while the corporate income tax is applied domestically. (If anything, aren’t relatively large, exporting firms more likely to have some market power?) And the structures of how the two taxes are assessed differ. Nonetheless elasticities of supply, demand, and factor mobility usually are the dominant factors in calculating tax incidence, regardless of the details of the tax.
Perhaps those differences between tariffs and corporate taxes all work out so that you can hold the exact mix of position you wish to! And perhaps you figured all this out in advance, and so this post is not inducing any new thoughts in you.
Or perhaps not.
Sunday assorted links
2. The Zvi on Gemini 2.5. I agree it is very strong.
3. Very old interview with Hrishikesh Mukherjee.
4. Does Boulez still matter? A good talk, too bad the speaker doesn’t like Boulez’s best works!
5. “Already, Russia is starting to push back against a flood of cheap Chinese imports. It has introduced tariffs on some Chinese goods and raised recycling fees on imported cars, effectively raising the price of vehicles from China.” WSJ link.