Category: Economics

Latest “So-Called Reasoning Systems” Hallucinate MORE Than Earlier A.I. Systems

Since more sophisticated “reasoning” A.I. systems are increasingly inaccurate on the facts, it is unlikely that such systems will threaten any job where job performance depends on getting the facts right. Wouldn’t that include most jobs? The article quoted below suggests it would most clearly include jobs working with “court documents, medical information or sensitive business data.”

(p. B1) The newest and most powerful technologies — so-called reasoning systems from companies like OpenAI, Google and the Chinese start-up DeepSeek — are generating more errors, not fewer. As their math skills have notably improved, their handle on facts has gotten shakier. It is not entirely clear why.

Today’s A.I. bots are based on complex mathematical systems that learn their skills by analyzing enormous amounts of digital data. They do not — and cannot — decide what (p. B6) is true and what is false. Sometimes, they just make stuff up, a phenomenon some A.I. researchers call hallucinations. On one test, the hallucination rates of newer A.I. systems were as high as 79 percent.

. . .

The A.I. bots tied to search engines like Google and Bing sometimes generate search results that are laughably wrong. If you ask them for a good marathon on the West Coast, they might suggest a race in Philadelphia. If they tell you the number of households in Illinois, they might cite a source that does not include that information.

Those hallucinations may not be a big problem for many people, but it is a serious issue for anyone using the technology with court documents, medical information or sensitive business data.

“You spend a lot of time trying to figure out which responses are factual and which aren’t,” said Pratik Verma, co-founder and chief executive of Okahu, a company that helps businesses navigate the hallucination problem. “Not dealing with these errors properly basically eliminates the value of A.I. systems, which are supposed to automate tasks for you.”

. . .

For more than two years, companies like OpenAI and Google steadily improved their A.I. systems and reduced the frequency of these errors. But with the use of new reasoning systems, errors are rising. The latest OpenAI systems hallucinate at a higher rate than the company’s previous system, according to the company’s own tests.

The company found that o3 — its most powerful system — hallucinated 33 percent of the time when running its PersonQA benchmark test, which involves answering questions about public figures. That is more than twice the hallucination rate of OpenAI’s previous reasoning system, called o1. The new o4-mini hallucinated at an even higher rate: 48 percent.

When running another test called SimpleQA, which asks more general questions, the hallucination rates for o3 and o4-mini were 51 percent and 79 percent. The previous system, o1, hallucinated 44 percent of the time.

. . .

For years, companies like OpenAI relied on a simple concept: The more internet data they fed into their A.I. systems, the better those systems would perform. But they used up just about all the English text on the internet, which meant they needed a new way of improving their chatbots.

So these companies are leaning more heavily on a technique that scientists call reinforcement learning. With this process, a system can learn behavior through trial and error. It is working well in certain areas, like math and computer programming. But it is falling short in other areas.

For the full story see:

Cade Metz and Karen Weise. “A.I. Hallucinations Are Getting Worse.” The New York Times (Fri., May 9, 2025): B1 & B6.

(Note: ellipses added.)

(Note: the online version of the story was updated May 6, 2025, and has the title “A.I. Is Getting More Powerful, but Its Hallucinations Are Getting Worse.”)

A.I. Only “Knows” What Has Been Published or Posted

A.I. “learns” by scouring language that has been published or posted. If outdated or never-true “facts” are posted on the web, A.I. may regurgitate them. It takes human eyes to check whether there really is a picnic table in a park.

(p. B1) Last week, I asked Google to help me plan my daughter’s birthday party by finding a park in Oakland, Calif., with picnic tables. The site generated a list of parks nearby, so I went to scout two of them out — only to find there were, in fact, no tables.

“I was just there,” I typed to Google. “I didn’t see wooden tables.”

Google acknowledged the mistake and produced another list, which again included one of the parks with no tables.

I repeated this experiment by asking Google to find an affordable carwash nearby. Google listed a service for $25, but when I arrived, a carwash cost $65.

I also asked Google to find a grocery store where I could buy an exotic pepper paste. Its list included a nearby Whole Foods, which didn’t carry the item.

For the full commentary see:

Brian X. Chen. “Underneath a New Way to Search, A Web of Wins and Imperfections.” The New York Times (Tues., June 3, 2025): B1 & B4.

(Note: the online version of the commentary has the date May 29, 2024, and has the title “Google Introduced a New Way to Use Search. Proceed With Caution.”)

The Democratic Deep State Looked the Other Way as Fraudsters Stole 10 BILLION Healthcare Dollars

When DOGE fired federal workers we saw televised scenes where the fired workers expressed outrage at how taxpayers would be hurt by the loss of devoted civil servants. So where were the devoted civil servants in 2023? Were they doing their jobs to be alert to the Medicare, and personal identity, fraud that cost the public about 10 billion (that is “billion” with a “b”) dollars?

When Elon Musk’s DOGE uncovered myriad examples of major fraud, I saw Democrats on television complain that of course they were against fraud too, but it should be pursued more slowly and systematically, following traditional procedures. The Democrats were running the federal government in 2023. What procedure were the Democrats using, fast or slow, to protect taxpayers from the fraudulent loss of 10 billion (that is “billion” with a “b”) dollars?

Our jerry-rigged government-run-and-regulated health care system is rife with middlemen. In a true free-market healthcare system, patients would directly pay for healthcare, without middlemen. Patients would have the information, and the incentive to act on the information, to detect, report, and pursue fraudsters. Some fraud would exist under any system, but my hypothesis is that much less of it would exist under a free-market system.

(If you are concerned that patients would not have enough funds to pay for healthcare themselves, we could adopt the much better insurance system once proposed by Susan Feigenbaum, combined with deregulation that would reduce healthcare costs–like no longer mandating Phase 3 clinical trials.)

And my secondary hypothesis is that if we have to have a jerry-rigged government-run-and-regulated system, the Republicans, a party full of former bourgeois entrepreneurs and business managers, will usually do a marginally better job of detecting and pursuing fraud.

I wonder if these hypotheses have ever been researched by any of those noble economists studying the field of Public Choice?

(p. A18) When hundreds of thousands of people enrolled in Medicare were billed for expensive medical equipment they never asked for in 2023, it was part of a $10.6 billion fraud, among the largest such schemes in the program’s history, federal prosecutors said this week.

. . .

Those involved in the fraud bought dozens of companies that were accredited to submit claims to Medicare and the program’s supplemental insurers, prosecutors say.

Then, using personal information stolen from more than a million Americans, the defendants filed billions of dollars in claims for equipment that had not been ordered by people enrolled in Medicare and was not delivered to them, according to the indictment.

Of the $10.6 billion that was fraudulently billed, the indictment says, the defendants collected more than $900 million, most of it coming from private “Medigap” insurers and the rest from the Medicare program itself.

Even if the patients themselves did not pay for the phantom supplies, which included urinary catheters, braces and other durable medical equipment, such schemes can affect Medicare recipients by causing premium costs to rise.

. . .

In 2019, the Justice Department uncovered a scheme that it said had defrauded the program of more than $1 billion with phony claims for back and knee braces. In April 2023, prosecutors charged 18 defendants in a nearly $500 million scheme that involved false billing for Covid-19 tests that were never administered.

For the full story see:

Santul Nerkar. “11 Accused of Medicare Fraud In Scheme Based in Russia.” The New York Times (Sat., June 18, 2025): A18.

(Note: ellipses added.)

(Note: the online version of the story has the date June 27, 2025, and has the title “U.S. Charges 11 in Russia-Based Scheme to Bilk Medicare of $10.6 Billion.”)

The better healthcare insurance system proposed by Susan Feigenbaum was proposed in:

Feigenbaum, Susan. “Body Shop’ Economics: What’s Good for Our Cars May Be Good for Our Health.” Regulation 15, no. 4 (Fall 1992): 25-31.

Gram and Boudreaux Present Data to Refute Myths About the History of Capitalism

Donald Boudreaux makes the case for economic freedom more clearly, effectively, and persistently than almost anyone. I have not yet read his book with former senator Phil Gram, but I look forward to doing so.

(p. A13) . . . if you control the historical narrative surrounding economic questions, you are more than halfway toward winning the policy battles. This is the insight Phil Gramm and Donald J. Boudreaux bring to “The Triumph of Economic Freedom.”

. . .

In eight chapters, Messrs. Gramm and Boudreaux tackle seven longstanding historical myths about American capitalism that still influence economic discussion today. In each case, they are careful not to caricature the conventional wisdom they challenge.

But having given their opponents’ positions more than a fair shake, Messrs. Gramm and Boudreaux turn to extensive rebuttals. These are supported by detailed attention to data sets. The authors also outline alternative explanations for the path taken by American manufacturing since the 1970s, and for the state of poverty in America today.

For the full review see:

Samuel Gregg. “Bookshelf; A Few Lessons From History.” The Wall Street Journal (Tuesday, June 17, 2025): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date June 16, 2025, and has the title “Bookshelf; ‘The Triumph of Economic Freedom’: A Few Lessons From History.”)

The book under review is:

Gramm, Phil, and Donald J. Boudreaux. The Triumph of Economic Freedom: Debunking the Seven Great Myths of American Capitalism. Lanham, Maryland: Rowman & Littlefield Publishers, 2025.

Do Graeber’s “Bullshit Jobs” Thrive in Innovative Dynamism?

Last week I participated in a panel on “Freedom and Abundance” with Bri Wolf at an I.H.S. Symposium on “The Future of Liberalism.” As a small part of my presentation (and also in my Openness book), I claim that innovative dynamism creates more jobs than it destroys, and that the new jobs are generally better jobs than the old jobs.

After the panel Bri asked me how I respond to David Graeber’s book Bullshit Jobs. I vaguely remembered hearing of the book, and told her I would look into it. What follows is my brief, quick, edited response.

Graeber claimed that a large number of jobs in the for-profit sector are purposeless, demoralizing “bullshit” jobs. I do think that there are some bullshit jobs, but think that they are much more common in the government and non-profit sectors than in the for-profit sector. There are some in the for-profit sector, but I would argue that the number is diminishing, and many of them are due to labor unions and government regulations, that protect bullshit jobs from being eliminated.

Where innovative dynamism is allowed to function unbound, the trend is toward more meaningful jobs. Two of the important technological innovations of the last several decades have been computers and the internet. Erik Brynjolfsson and co-authors wrote a few papers showing that an important effect has been to flatten the hierarchy at a great many firms. This eliminates much of the middle management that Graeber identifies as one main location of bullshit jobs.

I also looked the book up on Wikipedia and noticed that a couple of empirical papers have been written that raise doubts about some of the claims in the book.

The book seems to have gotten enough attention to justify a longer more serious critique than I am giving it in this blog entry. But I humor myself that I have bigger fish to fry, namely my mission to see if I can help nudge the healthcare mess more toward being a system of innovative dynamism.

Some of Erik Brynjolfsson’s relevant co-authored articles, alluded to above, are:

Bresnahan, Timothy F., Erik Brynjolfsson, and Lorin M. Hitt. “Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence.” Quarterly Journal of Economics 117, no. 1 (2002): 339-76.

Brynjolfsson, Erik, and Lorin M. Hitt. “Beyond Computation: Information Technology, Organizational Transformation and Business Performance.” Journal of Economic Perspectives 14, no. 4 (Fall 2000): 23-48.

Brynjolfsson, Erik, and Lorin M. Hitt. “Computing Productivity: Firm-Level Evidence.” Review of Economics and Statistics 85, no. 4 (Nov. 2003): 793-808.

David Graeber’s book is:

Graeber, David. Bullshit Jobs: A Theory. New York: Simon & Schuster, 2018.

My book is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

The Chicago School of Economics Was Once Uniquely Focused on Real World Problems

The Chicago School of Economics, most associated with Milton Friedman and George Stigler, saw itself as different from all the other top graduate programs in economics. At Chicago, the priority was solving applied problems, and only as much mathematics and theory should be used as was necessary to solve them. The other schools prioritized mathematical puzzle-solving and mathematical rigor and sophistication.

For those who might suspect Chicago was full of itself, the non-Chicago economists Arjo Klamar and David Colander dispelled the suspicion in their The Making of an Economist. After thorough interviewing and surveying of graduate students at the five or six top graduate programs, they concluded that graduate students at all but Chicago were cynically discouraged to realize that they were being trained to solve mathematical puzzles, while only those at Chicago still felt that they were being trained to matter in the real world.

I noticed that a recent obituary for the economist Stanley Fischer quotes Fischer as stating some diplomatic confirmation of the Klamar and Colander conclusion:

After earning his Ph.D. at M.I.T. in 1969, Mr. Fischer moved to the University of Chicago as a postdoctoral researcher and assistant professor. “At M.I.T. you did the mathematical work,” he told The New York Times in 1998, “and at Chicago you asked the question of how this applies to the real world” (Hagerty 2025, p. A17).

Alas, I fear that what was once true, is true no longer. I fear that if Klamar and Colander were to repeat their study today, they would find that Chicago has joined the other top programs in prioritizing mathematical puzzle-solving and mathematical rigor and sophistication.

The obituary of Stanley Fischer, quoted above, is:

James R. Hagerty. “Stanley Fischer, 81, Economist Who Helped Defuse Crises, Dies.” The New York Times (Mon., June 2, 2025): A17.

(Note: the online version of the Steve Lohr article was updated June 10, 2025, and has the title “Stanley Fischer, Who Helped Defuse Financial Crises, Dies at 81.”)

The Klamar and Colander book mentioned above is:

Klamer, Arjo, and David Colander. The Making of an Economist. Boulder, CO: Westview Press, 1990.

“Gold Standard” RCT Studies Do Not Always Agree on Broad Issues

Randomized double-blind clinical trials (RCTs) are usually labeled the “gold standard” of medical evidence. But any given clinical trial can be done in an infinite number of ways. The length and duration of the RCT can vary. The eligibility requirements can vary. The definition of the placebo or comparison treatment can vary.

So on the broad issue of whether red meat is good for the heart, an RCT that compares the heart effects of red meat versus the heart effects of chicken, can yield different results than an RCT that compares the heart effects of red meat versus the heart effects of a plant-based diet.

Both RCTs might be competently done, involving no dishonesty or fraud.

We tend to overgeneralize the results of an RCT, for instance saying “red meat is heart healthy,” or “red meat is not heart healthy.” Whereas all we are justified in saying is “red meat is equally heart healthy as chicken” and “read meat is less heart healthy than a plant-based diet.”

Since RCTs are expensive and time-consuming, physicians and patients will often have to choose between treatments where no RCT has been done where the researchers made the choices that are most relevant to the patient’s situation.

And in an environment where RCT costs are high and funding is scarce, are researchers to be condemned if among the myriad varying ways of setting up the RCT, they choose the ways most likely to yield the results that will be appealing to their funder?

The article quoted below, in passages I did not quote, assumes this is only an issue with industry-funded research. But government funding review panels also have preferred outcomes. For example, Charles Piller in Doctored has recently documented that government funders have been more likely to fund RCTs that support the amyloid hypothesis of the cause of Alzheimer’s.

So is there hope for those who want to take effective action against dire disease? Yes, we can recognize that not all sound actionable evidence comes from RCTs. We can stop mandating Phase 3 trials, so that a more diverse assortment of plausible therapies can be explored. We can encourage diverse, decentralized funding sources.

(p. D6) In a review published last week in the American Journal of Clinical Nutrition, scientists came to a concerning conclusion. Red meat appeared healthier in studies that were funded by the red meat industry.

. . .

Past research funded by the sugar industry, for instance, has downplayed the relationship between sugar and health conditions like obesity and heart disease. And studies funded by the alcohol industry have suggested that moderate drinking could be part of a healthy diet.

Miguel López Moreno, a researcher at Francisco de Vitoria University in Spain who led the new analysis, said in an email that he wanted to know if similar issues were happening with the research on unprocessed red meat.

. . .

Dr. Moreno and his colleagues found that the trials with funding from the red meat industry were nearly four times as likely to report favorable or neutral cardiovascular results after eating unprocessed red meat when compared with the studies with no such links.

. . .

These differing results may have stemmed from how the studies were set up in the first place, Dr. Tobias wrote in an editorial for the American Journal of Clinical Nutrition that accompanied the new study.

Individual nutrition studies can be good at showing how the health effects of certain foods compare with those of other specific foods. But to demonstrate whether a particular food, or food group like red meat, is good or bad for health in general, scientists must look at the results from many different studies that compare it to all possible food groups and diets.

The new review showed that, on the whole, the industry-funded red meat studies neglected to compare red meat to the full range of foods people might eat — including food we know to be good for the heart like whole grains or plant-based protein sources such as tofu, nuts or legumes. Instead, many of the studies compared unprocessed red meat to other types of animal protein like chicken or fish, or to carbohydrates like bagels, pasta or rice.

The independently funded studies, on the other hand, compared red meat to “the full spectrum” of different diets — including other types of meat, whole grains and heart-healthy plant foods like soy products, nuts and beans — Dr. Tobias said. This more comprehensive look offers a fuller picture of red meat’s risks or benefits, she said.

. . .

A spokeswoman for the National Cattlemen’s Beef Association said in an email that “beef farmers and ranchers support gold standard scientific research,” and that both animal and plant sources of protein can be part of a heart-healthy diet.

For the full story see:

Caroline Hopkins Legaspi. “Eyes on the Outcomes Of Red Meat Research.” The New York Times (Tues., May 27, 2025): D6.

(Note: ellipses added.)

(Note: the online version of the story has the date May 20, 2025, and has the title “Is Red Meat Bad for Your Heart? It May Depend on Who Funded the Study.”)

The academic article co-authored by Moreno and mentioned above is:

López-Moreno, Miguel, Ujué Fresán, Carlos Marchena-Giráldez, Gabriele Bertotti, and Alberto Roldán-Ruiz. “Industry Study Sponsorship and Conflicts of Interest on the Effect of Unprocessed Red Meat on Cardiovascular Disease Risk: A Systematic Review of Clinical Trials.” The American Journal of Clinical Nutrition 121, no. 6 (June 2025): 1246-57.

Some other articles discussing cases where industry funding is alleged to have funded biased research are:

Anahad O’Connor. “Sugar Backers Paid to Shift Blame to Fat.” The New York Times (Tues., Sept. 13, 2016): A1 & ?.

(Note: the online version of the story has the date Sept. 12, 2016, and has the title “How the Sugar Industry Shifted Blame to Fat.”)

Alice Callahan. “Is Fake Meat Superior to the Real Thing?” The New York Times (Tues., Feb. 18, 2025): D7.

(Note: the online version of the story has the date Feb. 17, 2025, and has the title “Is Fake Meat Better for You Than Real Meat?”)

Roni Caryn Rabin. “U.S. Wooed Alcohol Industry for a Drinking Study.” The New York Times, First Section (Sun., March 18, 2018): 1 & ??.

(Note: the online version of the story has the date March 17, 2018, and has the title “Federal Agency Courted Alcohol Industry to Fund Study on Benefits of Moderate Drinking.”)

The Newest A.I. “Reasoning Models Actually Hallucinate More Than Their Predecessors”

I attended an I.H.S. Symposium last week where one of my minor discoveries was that a wide range of intellectuals, regardless of location on the political spectrum, share a concern for the allegedly damaging labor market effects of A.I.  As in much else I am an outlier–I am not concerned about A.I.

But since so many are concerned, and believe A.I. undermines my case for a better labor market under innovative dynamism, I will continue to occasionally highlight articles that present the evidence and arguments that reassure me.

(p. B1) “Humanity is close to building digital superintelligence,” Altman declared in an essay this week, and this will lead to “whole classes of jobs going away” as well as “a new social contract.” Both will be consequences of AI-powered chatbots taking over all our white-collar jobs, while AI-powered robots assume the physical ones.

Before you get nervous about all the times you were rude to Alexa, know this: A growing cohort of researchers who build, study and use modern AI aren’t buying all that talk.

The title of a fresh paper from Apple says it all: “The Illusion of Thinking.” In it, a half-dozen top researchers probed reasoning models—large language models that “think” about problems longer, across many steps—from the leading AI labs, including OpenAI, DeepSeek and Anthropic. They found little evidence that these are capable of reasoning anywhere close to the level their makers claim.

. . .

(p. B4) Apple’s researchers found “fundamental limitations” in the models. When taking on tasks beyond a certain level of complexity, these AIs suffered “complete accuracy collapse.” Similarly, engineers at Salesforce AI Research concluded that their results “underscore a significant gap between current LLM capabilities and real-world enterprise demands.”

Importantly, the problems these state-of-the-art AIs couldn’t handle are logic puzzles that even a precocious child could solve, with a little instruction. What’s more, when you give these AIs that same kind of instruction, they can’t follow it.

. . .

Gary Marcus, a cognitive scientist who sold an AI startup to Uber in 2016, argued in an essay that Apple’s paper, along with related work, exposes flaws in today’s reasoning models, suggesting they’re not the dawn of human-level ability but rather a dead end. “Part of the reason the Apple study landed so strongly is that Apple did it,” he says. “And I think they did it at a moment in time when people have finally started to understand this for themselves.”

In areas other than coding and mathematics, the latest models aren’t getting better at the rate that they once did. And the newest reasoning models actually hallucinate more than their predecessors.

For the full commentary see:

Christopher Mims. “Keywords: Apple Calls Today’s AI ‘The Illusion of Thinking’.” The Wall Street Journal (Sat., June 14, 2025): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the commentary has the date June 13, 2025, and has the title “Keywords: Why Superintelligent AI Isn’t Taking Over Anytime Soon.” In the original print and online versions, the word “more” appears in italics for emphasis.)

Sam Altman’s blog essay mentioned above is:

Altman, Sam. “The Gentle Singularity.” In Sam Altman blog, June 10, 2025, URL: https://blog.samaltman.com/the-gentle-singularity.

The Apple research article briefly summarized in a passage quoted above is:

Shojaee, Parshin, Iman Mirzadeh, Keivan Alizadeh, Maxwell Horton, Samy Bengio, Mehrdad Farajtabar. “The Illusion of Thinking: Understanding the Strengths and Limitations of Reasoning Models Via the Lens of Problem Complexity.” Apple Machine Learning Research, June 2025, URL: https://machinelearning.apple.com/research/illusion-of-thinking.

Puzzling Studies Claim Economic Downturns Encourage Innovation

A recent paper co-authored by Talay joins several other studies (e.g., Anthony 2009 and Field 2011) in claiming that economic downturns encourage economic innovation.

I have always found these studies deeply puzzling. When I acquire infinite time, I plan to hunker down and try to figure out what is going on.

My initial hypothesis is that downturns do not actually help innovators, but that those entrepreneurs who persist in bringing new goods to market during a downturn either have higher levels of perseverance or else have better new goods.

In other words the puzzling results are due to a selection issue–other things are not equal, and downturns do not encourage innovation.

The WSJ article that summarizes the recent paper is:

Lisa Ward. “When a Recession Helps Product Launch.” The Wall Street Journal (Tues., June 17, 2025): B6.

(Note: the online version of the WSJ article has the date June 12, 2025, and has the title “Yes or No: It’s Smart to Launch a New Product in a Recession.”)

The recent academic published paper co-authored by Talay and summarized in The Wall Street Journal article mentioned and cited above is:

Talay, M. Berk, Koen Pauwels, and Steven H. Seggie. “Why and When to Launch New Products During a Recession: An Empirical Investigation of the U.K. FMCG Industry and the U.S. Automobile Industry.” Journal of the Academy of Marketing Science 52, no. 2 (March 2024): 576-98.

The two books cited above that support the claim that downturns encourage innovation are:

Anthony, Scott D. The Silver Lining: An Innovation Playbook for Uncertain Times. Boston, MA: Harvard Business School Press, 2009.

Field, Alexander J. A Great Leap Forward: 1930s Depression and U.S. Economic Growth, Yale Series in Economic and Financial History. New Haven, CT: Yale University Press, 2011.

The Classical Liberal Economist’s Current Job: Minimize the Harm from Tariffs, Maximize the Benefits from Deregulation and Downsizing Government

I used to run into Richard Burkhauser at economics meetings occasionally and always enjoyed talking with him and hearing about his research. I believe Richard’s activity in the first Trump administration makes sense: if tariffs are going to be imposed, do them in a way that minimizes the damage to the economy. Although not mentioned in the article quoted below, I am sure Richard also did what he could to further the part of Trump’s agenda that was positive for he economy: reducing regulations so entrepreneurs can innovate and create jobs, and downsizing the government so taxpayers can keep more of their earnings.

(p. 1) Partway through a panel discussion at a recent economics conference in San Francisco, Jason Furman, a former adviser to President Barack Obama, turned to Kimberly Clausing, a former member of the Biden administration and the author of a book extolling the virtues of free trade.

“Everyone in this room agrees with your book,” Mr. Furman said. “No one outside of this room agrees with your book.”

The academics and policy wonks gathered in the hotel conference room laughed, but the comment captured something real: After decades of helping to shape policy on weighty matters like taxes and health insurance, economists find that their influence is at a low ebb.

. . .

(p. 6) Mr. Trump, in his first term, had few economists in top roles, and perhaps the most prominent exception — Peter Navarro, a Harvard-trained economist who was an adviser on trade policy — held skeptical views on trade, particularly with China, that put him far outside the economic mainstream. (In a 2016 survey of academic economists, not a single respondent said putting tariffs on China to encourage domestic production would be a good idea.)

Economists who held more mainstream views had limited influence. Richard Burkhauser, a Cornell University professor who served on Mr. Trump’s Council of Economic Advisers, said he and his colleagues quickly understood that there was little point in trying to talk Mr. Trump out of imposing tariffs.

“The most forlorn economists at the C.E.A. specialized in trade,” he said. If they had tried to fight tariffs, he said, “that would have been the last meeting we were at.”

Instead, Mr. Burkhauser said, economists focused on a different question: If the administration was going to impose tariffs, how could it do them in the least painful way possible?

For the full story see:

Ben Casselman. “Economists See Influence Wane in Policy Circles.” The New York Times, SundayBusiness Section (Sun., January 12, 2025): 1 & 6.

(Note: ellipsis added.)

(Note: the online version of the story has the date Jan. 10, 2024, and has the title “Economists Are in the Wilderness. Can They Find a Way Back to Influence?”)

Plenty in Science Still “Just Doesn’t Make Any Sense”

In my Openness book, I argue against those who see a future of inevitable stagnation. One argument for inevitable stagnation says that entrepreneurs build their innovations on science and we have run out of new knowledge to learn in science.

But whenever we keep our eyes open and observe more closely, or in new areas, we see what we cannot yet explain. The passages quoted below give another example. So we still have a lot to learn in science.

(Of course I also point out in the book that much entrepreneurial innovation is not tied to current advances in science–and is done by entrepreneurs who do not know, or who do not hold in high esteem, the current conclusions of mainstream scientists.)

(p. A14) On Dec. 24 [2024], NASA’s Parker Solar Probe swooped closer than it ever had before to the sun, just a few million miles above its blazing hot surface.

The team behind the mission waited nervously, trusting that the probe would survive the encounter. Then, a few minutes shy of midnight on Thursday [Dec. 2?, 2024], Parker phoned home.

. . .

. . ., there was some fear that the probe might not survive this time. Parker’s heat shield is designed so that the front of the vehicle can withstand facing the blistering heat of the sun’s outer atmosphere, which reaches millions of degrees, while the back, which contains the probe’s sensitive instruments, sits at a comfortable 85 degrees Fahrenheit.

“Literally one side is at a temperature that is unfathomable,” Joseph Westlake, the director of heliophysics at NASA, said. “And the back of it is a hot, sunny day.”

. . .

Parker’s data will . . . help scientists understand how the sun’s outer atmosphere, known as the corona, can be hundreds of times hotter than the solar surface below it.

“It’s like if you were standing next to a bonfire and you took a couple of steps back, and all of a sudden it got hotter,” Dr. Westlake said. “It just doesn’t make any sense.”

For the full story see:

Katrina Miller. “After Silence, Solar Probe Signals Earth of Survival.” The New York Times (Sat., December 28, 2024): A14.

(Note: ellipses, bracketed year, and bracketed date, added.)

(Note: the online version of the story was updated Dec. 30, 2024, and has the title “After Days of Silence, NASA’s Parker Solar Probe Phones Home.”)

My book mentioned in my initial comments is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.