Some of the Covid-era deregulations will stick

Lawmakers in Texas and at least 19 other states that let bars and restaurants sell to-go cocktails during the pandemic are moving to make those allowances permanent. Many states that made it easier for healthcare providers to work across state lines are considering bills to indefinitely ease interstate licensing rules. Lawmakers in Washington are pushing for Medicare to extend its policy of reimbursing for certain telehealth visits. States also are trying to lock in pandemic rules that spawned new online services, from document notarization to marijuana sales.

Deregulation has long been a central tenet among Republican politicians, but many of the coronavirus-inspired changes have gained bipartisan support…

In February, California State Sen. Scott Wiener, a San Francisco Democrat, co-authored legislation with a Republican lawmaker to make permanent the coronavirus-era suspension of liquor laws that prohibited drinking in sidewalk extensions known as parklets and other outdoor dining spaces used by multiple vendors. If approved by two-thirds of the legislature and signed by the Democratic governor, it would take effect in September.

State legislatures in Connecticut and Arkansas also are weighing bills to extend outdoor dining allowances made during the pandemic.

Mr. Wiener said he has spent years studying ways to modernize the state’s liquor laws, some of which are 100 years old.

Here is much more from Aaron Zitner and Julie Bykowicz at the WSJ.  For the pointer I thank Greg Roemer.

When will China move against Taiwan?

That is the topic of my latest cheery Bloomberg column, here is one excerpt:

It’s not as if all of a sudden one morning the news will be filled with reports of bombs falling on Taipei. China has other options: It might occupy the islands of Quemoy and Matsu, just off the coast of China but claimed by Taiwan. Imagine China taking the islands, possibly with zero casualties, and then calling both Taipei and Washington to discuss what should happen next. Taiwan would have to think long and hard.

It would hardly be new for China to target Quemoy and Matsu. In 1958 Taiwan defended those islands with U.S. support after a Chinese incursion. An uneasy stalemate followed. There was also a crisis in 1954-55, again with inconclusive results. A possible confrontation today, in view of growing Chinese military and economic power, requires a fundamentally different calculus.

And this:

The most common argument against imminent Chinese action is that “time is on China’s side.” The size of China’s economy relative to America’s is likely to rise over time, along with China’s relative military prowess.

But China’s GDP as a share of global GDP may already be near a peak, depending on how well the rest of the world does. China has also to worry about the rise of India, the continuing rearming of Japan and a possibly recalcitrant Southeast Asia. Meanwhile, the Communist Party itself may face increasing fractures and lose some of its grip on power. If China is going to take significant action against Taiwan, now may be the easiest time to do so.

The evolution of military technologies would also seem to argue for Chinese action sooner rather than later. Even a very powerful China might find Taiwan difficult to conquer in 20 years. At the current moment, Taiwan’s defense capabilities seem especially run down.

Momentum is another reason why China might decide to act soon. China recently changed the status of Hong Kong, and has taken increasingly concrete steps to tighten its grip on Xinjiang, in both cases facing an international opposition that is modest and manageable.

Once countries start down such an aggressive road it is sometimes difficult for them to stop. Both the Chinese military and the organizational infrastructure of the Communist Party are currently geared toward “solutions,” activism, and the notion of bringing everyone into the fold. China is used to receiving foreign criticism, and its leaders seem to be consolidating their power. Because of its success in halting the spread of the pandemic, the party currently enjoys a status that it might find hard to regain.

Is it possible for the party to put the brakes on this process and restart it 20 years later? Maybe — but again, the view that China is prepared for imminent action on Taiwan is a plausible one.

Developing…

Tuesday assorted links

1. Promise on an HIV vaccine?

2. “The money itself is programmable. Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jump-start.” (WSJ)

3. Soviet LOTR “markets” in everything.

4. Have they ruined Plastic Ono Band? (WSJ, probably)

5. NYT obituary for Robert Mundell.

6. The decline of the Central American elites (The Economist).

Deregulation has never been more imperative

Electric vehicle charging stations can in fact be provided by the private sector, just as gas stations are.  But will state and local governments step out of the way?:

There are several regulatory barriers to the deployment of EV charging infrastructure including permitting of charging infrastructure, the lack of a technical standard for charging infrastructure, policy uncertainty regarding sale of electricity, regulation regarding EV-related investment by utilities, etc. Cities which face these regulatory barriers should address them as early as possible by building political consensus and then mandating the relevant government agency to address each issue whether it be modifying building codes, streamlining permitting, deciding a standard in consultation with OEMs, etc. As mentioned in Chapter 4, city governments hold a comparative advantage in zoning and building codes and permitting, and they should use those levers to good effect. Cities should use their regulatory influence smartly to remove / mitigate barriers to create a conducive environment for private investors. This report also shows that perse a direct subsidy to private infrastructure providers is not required because charging networks offer a viable business opportunity – the notable exemption being cities with large proportions of on-street residential parking where residents might be undersupplied with charging infrastructure as the economics under those conditions are less appealing.

Here is the full report, from Stephen Crolius and the Clinton Climate Change Initiative.

From the Kibbutz to Libertarianism

Meir Kohn on his long path to becoming a libertarian. As a teenager he moved to Israel to live on a kibbutz.

Kibbutz is bottom‐​up socialism on the scale of a small community. It thereby avoids the worst problems of state socialism: a planned economy and totalitarianism. The kibbutz, as a unit, is part of a market economy, and membership is voluntary: you can leave at any time. This is “socialism with a human face” — as good as it gets.

Being a member of a kibbutz taught me two important facts about socialism. The first is that material equality does not bring happiness. The differences in our material circumstances were indeed minimal. Apartments, for example, if not identical, were very similar. Nonetheless, a member assigned to an apartment that was a little smaller or a little older than someone else’s would be highly resentful. Partly, this was because a person’s ability to discern differences grows as the differences become smaller. But largely it was because what we received was assigned rather than earned. It turns out that how you get stuff matters no less than what you get.

The second thing I learned from my experience of socialism was that incentives matter. On a kibbutz, there is no material incentive for effort and not much incentive of any kind. There are two kinds of people who have no problem with this: deadbeats and saints. When a group joined a kibbutz, the deadbeats and saints tended to stay while the others eventually left. I left.

In retrospect, I should have known right away, from my first day, that something was wrong with utopia. On my arrival, I was struck by the fact that the pantry of the communal kitchen was locked.

Read the whole thing.

Addendum: Ilya Somin has interesting comments especially on kibbutz versus the lesser known moshavim.

Has Covid ushered in a new era of U.S. regional decentralization?

That is the topic of my latest Bloomberg column, and here is the opener:

The homogenization of America — through national TV and politics, cheap transportation and big online or nationwide businesses such as Walmart and Amazon — is a longstanding story. Regardless of how true it is, or ever was, a new truth is emerging from the pandemic: In the last year, the differences among the U.S.’s states and regions have become increasingly apparent — and they are more temperamental than political.

I recently spent two weeks in Miami Beach, and the mood was festive. On the street, many people wore masks, but once they entered the packed restaurants and clubs, the masks came off and the partying started. (Disclosure: I am vaccinated, and was an observer, not a participant.) The midnight curfew was by no means always respected.

That scene might make you recoil in horror, and many observers predicted catastrophe for Florida’s policies. But Florida’s death toll is close to the national average, and Governor Ron DeSantis is extremely popular. The state’s lockdowns were never very strict, its schools have been open since August, and Miami’s NBA team is welcoming fans, albeit with seating restrictions. The economy has been booming for some time, in part because people who wish to spend money or organize get-togethers have been drawn to Florida.

And my sense is that most Floridians feel vindicated. I spoke to several people who admitted they had had Covid earlier in the year and described the experience with a giggle or a smirk, as if it were nothing serious. Just last week DeSantis announced that Florida would have nothing to do with plans for vaccine passports…

San Francisco is one obvious point of contrast. The schools still have not reopened, with no clear date in sight, even though the teachers have been offered vaccines. (Meanwhile, the school board decided to rename many of its schools.) Large public gatherings are rare, and inside dining has been largely prohibited. Like Florida, the city can boast of very low death rates from Covid, and like Floridians, many San Franciscans seem proud of their course.

You might think this is all because Florida is a Republican-leaning state. But Donald Trump won only 51.2% of the vote there last year, and Joe Biden won Miami-Dade County by seven percentage points…

Overall the Southeast would seem to be a big winner, as the psychological effects of low rates of unemployment may prove more durable than the effects of high rates of casualties.

There is much more at the link, including a comparison of Virginia and Maryland.

Wohin economics?

Mammograms and Mortality: How has the Evidence Evolved?

Surviving a Mass Shooting

Representation is Not Sufficient for Selecting Gender Diversity

Back to School: The Effect of School Visits During COVID-19 on COVID-19 Transmission

The Public Health Effects of Legalizing Marijuana

Those are all new NBER working papers, issued today.  To be clear, I do not intend this list as criticism, either of these papers or of the NBER (for one thing, I have not read them).  But surely it is worth pointing out that something has changed.  If you think economists should be doing these papers, does that translate into a relatively low opinion of the quantitative standards in those fields proper?  Or maybe the economists are better at spotting interesting questions and seeing the work through?  Yes or no?  How exactly should we imagine the (possible) comparative advantage of economists with these topics?  I mean these as genuine questions, not snarky ones.  I have never been a per se opponent of economic imperialism.

Monday assorted links

Testing and the NFL

NYTimes: The Centers for Disease Control and Prevention and the National Institutes of Health announced a new initiative on Wednesday to help determine whether frequent, widespread use of rapid coronavirus tests slows the spread of the virus.

The program will make rapid at-home antigen tests freely available to every resident of two communities, Pitt County, N.C., and Hamilton County, Tenn., enough for a total of 160,000 people to test themselves for the coronavirus three times a week for a month.

“This effort is precisely what I and others have been calling for nearly a year — widespread, accessible rapid tests to help curb transmission,” said Michael Mina, an epidemiologist at Harvard University who has been a vocal proponent of rapid, at-home testing programs.

I guess this is good news it just feels like something that in a different time line, happened long ago. Here is Derek Thompson in an excellent piece making exactly that point:

Imagine a parallel universe where Americans were tested massively, constantly, without care for cost, while those who tested negative continued more or less about their daily life.

In fact, that parallel universe exists. It’s the National Football League.

..After an October outbreak, the NFL moved to daily testing of all its players and instituted new restrictions on player behavior and stricter rules on ventilation and social distancing. The league also used electronic tracking bracelets to trace close contacts of people who tested positive. Throughout the season, the NFL spent about $100 million on more than 900,000 tests performed on more than 11,000 players and staff members. In January, the CDC published an analysis of the league that concluded, “Daily testing allowed early, albeit not immediate, identification of infection,” enabling the league to play the game safely.

You could write off the NFL’s season as the idiosyncratic achievement of a greedy sport with nearly unlimited resources. But I can think of another self-interested institution with nearly unlimited resources: It’s the government of a country with a $20 trillion economy and full control over its own currency. Unlike the NFL, though, the U.S. never made mass testing its institutional priority.

“The NFL was almost like a Korea within the United States,” Alex Tabarrok told me. “And it’s not just the NFL. Many universities have done a fabulous job, like Cornell. They have followed the Korea example, which is repeated testing of students combined with quick isolation in campus dorms. Mass testing is a policy that works in practice, and it works in theory. It’s crazy to me that we didn’t try it.” Tabarrok said we can’t be sure that a Korean or NFL-style approach to national testing would have guaranteed Korean or NFL-style outcomes. After all, that would have meant averting about 500,000 deaths. Rather, he said, comprehensive early testing was our best shot at reducing deaths and getting back to normal faster.

How open and face to face will fall semester be?

I am pleased to see Cornell mandating vaccination for all of its students.  Of course other colleges and universities can do the same.  Even if they do not take that step, it still seems it will be “safe enough” to hold most classes in-person in the Fall, if not sooner.

And yet.

Here is what I think is the issue.  Universities these days are not very good at “leaving people behind,” at least not as an act of open and deliberate commission.  What about students or faculty who just had organ transplants and who thus might have compromised immune systems and also high vulnerability to Covid?  Rather than the Coase theorem being applied, schools might make professors offer a hybrid option, namely that some students take the class face to face, and other students take it over Zoom, with a computer hooked up to cover the classroom.

Of course the mixed mode doesn’t work very well.  I’ve learned from meetings that an all on-line meeting usually is (much) better than a mixed meeting where some people are present and others on-line, or in the old days on the phone.

So imagine universities giving every student the option to check a box: “I want this class on-line so please make it a hybrid option.”

Except they don’t make anyone prove that they just had an organ transplant.

And then ten percent of the students prefer to live in Pakistan, California, Florida — wherever.  Those students check the box to make the class a hybrid option.  What happens?

Many classes “might just suck.”

Another option is that the class evolves into mainly on-line as a least worst option.

Another option — #3 — is that the university forgets about the box-checking option but nonetheless uses this as a chance to evolve toward a larger and more sensible on-line presence.

#3 might happen, but I don’t think it will be in place by this fall.  And thus you can see my worry about the pending fall semester in many institutions.  Will they have the stones to say “No, we’re just going to offer this one face to face”?

Stay tuned.

Facts about Nigerian-Americans

Second-generation black Americans have been inadequately studied in prior quantitative research. The authors seek to ameliorate this research gap by using the Current Population Survey to investigate education and wages among second-generation black Americans with a focus on Nigerian Americans. The latter group has been identified in some qualitative studies as having particularly notable socioeconomic attainments. The results indicate that the educational attainment of second-generation Nigerian Americans exceeds other second-generation black Americans, third- and higher generation African Americans, third- and higher generation whites, second-generation whites, and second-generation Asian Americans. Controlling for age, education, and disability, the wages of second-generation Nigerian Americans have reached parity with those of third- and higher generation whites. The educational attainment of other second-generation black Americans exceeds that of third- and higher generation African Americans but has reached parity with that of third- and higher generation whites only among women. These results indicate significant socioeconomic variation within the African American/black category by gender, ethnicity, and generational status that merits further research.

Here is the full paper by Sakomoto, et.al.

A Miniature Masterpiece

Superb NYTimes disquisition on a masterpiece of Indian miniature painting. The text, formatting, visuals, all beautifully done–better than any museum exhibit I can recall.

In addition to the subject matter this piece has a lot to say about online education and how news is becoming a winner take-most market. Note what Tyler and I said on endogenous fixed costs in our piece on online education in the AER and consider how many newspapers could put together a display of this quality.

Shaked and Sutton (1987) and Sutton (1998) show that when quality is primarily vertical, meaning that there is a measure of quality such that all consumers agree that higher quality is more preferred, then increased market size does not result in reduced concentration. Instead, as market size increases, firms invest more in quality, which endogenously increases economies of scale and maintains market concentration.

Along related lines, Berry and Waldfogel (2010) show that there are many more restaurants in larger than smaller cities, but even as city size increases by a factor of 10 there is no tendency for the number of newspapers to increase. Larger cities have more restaurants than smaller cities because economies of scale are limited and quality differs “horizontally,” according to taste (thus, larger cities have more diverse restaurants). Yet larger cities are served by roughly the same number of newspapers as smaller cities because quality is more vertical, most newspaper consumers want more coverage, better writers and more features.

Addendum: Tim and Marcos remind of previous items in this series which I also loved, The Birth of the Self Portrait and A Picture of Change.

Solve for the equilibrium

In their efforts to rein in illicit massage businesses across the country, police sometimes rely on sting operations in which undercover officers engage in sex acts with spa workers, according to law enforcement experts and police records reviewed by The Post. While such tactics are generally permitted by law…

Here is more from Douglas Macmillan and Abha Bhattarai at The Washington Post.