Category: Economics

Tighter Zoning Laws Resulted in More Racial Segregation

(p. A22) Across the New York City suburbs, a thicket of local zoning laws thwarts the building of all but the most expensive single-family homes.

In some parts of Scarsdale, in Westchester County, new homes must be built on lots of at least two acres. In most parts of the village of Muttontown, on Long Island, new homes must be at least 2,000 square feet. The Town of Oyster Bay, also on Long Island, requires that some guest apartments, known as accessory dwelling units, be occupied only by family members or domestic servants.

These zoning laws are among the most restrictive in the country. They severely limit the state’s housing supply, making the entire region less affordable. And they are rooted in Jim Crow.

For much of the 20th century, towns surrounding New York City used a stomach-churning mix of racial covenants and restrictive zoning laws to shut out Black Americans and others considered undesirable from thriving suburbs. The federal government supported this system in myriad ways, including by denying government backing for mortgage loans in Black neighborhoods, a practice known as redlining, which hardened segregation and sharply restricted the ability of Black Americans to secure mortgages and buy homes. After World War II, the government greatly expanded its role in residential segregation by backing large suburban developments across the United States like Levittown, on Long Island, on the condition that they exclude Black buyers.

The Fair Housing Act of 1968 made racial discrimination in housing illegal. But communities were still allowed to enact and maintain zoning laws that had the same effect. By this time, prices had risen, and the generous postwar federal subsidies that made it possible for white Americans to buy suburban homes — but which had largely been denied to Black Americans — were no longer available. Even if a suburb might no longer be allowed to overtly ban Black families, limiting development to large and expensive homes could achieve a similar goal.

As a result, the tighter zoning laws became associated nationally with increased racial segregation, as well as a diminished housing supply.

For the full commentary, see:

Mara Gay. “To Cut New York Housing Costs, Ease Suburbs’ Zoning Laws.” The New York Times (Thursday, Feb. 23, 2023): A22.

(Note: the online version of the commentary has the date February 21, 2023, and has the title “The Era of Shutting Others Out of New York’s Suburbs Is Ending.”)

Yale Economist Says Stagnant Japan Would Benefit from Mass Suicide of Elder Citizens

A growing number of so-called “progressives” are advocating an end to economic growth. I do not believe that most of them understand how much more suffering and death the world will experience if their advocacy succeeds. (I remember decades ago seeing a beautiful but troubling Japanese movie with my friend Hajime Miyazaki, in which the loving, aging matron of a starving family was willingly carried up a mountain by one of her sons and left there so the other members of her family would have more to eat.)

(p. A1) In interviews and public appearances, Yusuke Narita, an assistant professor of economics at Yale, has taken on the question of how to deal with the burdens of Japan’s rapidly aging society.

“I feel like the only solution is pretty clear,” he said during one online news program in late 2021. “In the end, isn’t it mass suicide and mass ‘seppuku’ of the elderly?” Seppuku is an act of ritual disembowelment that was a code among dishonored samurai in the 19th century.

. . .

(p. A10) Given Japan’s low birthrate and the highest public debt in the developed world, policymakers increasingly worry about how to fund Japan’s expanding pension obligations.

. . .

In Japanese folklore, families carry older relatives to the top of mountains or remote corners of forests and leave them to die.

. . .

In broaching euthanasia, Dr. Narita has spoken publicly of his mother, who had an aneurysm when he was 19. In an interview with a website where families can search for nursing homes, Dr. Narita described how even with insurance and government financing, his mother’s care cost him 100,000 yen — or about $760 — a month.

For the full story, see:

Motoko Rich and Hikari Hida. “Scholar Suggests Mass Suicide for Japan’s Old. Does He Mean It?” The New York Times (Monday, Feb. 13, 2023): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the story has the date Feb. 12, 2023, and has the title “A Yale Professor Suggested Mass Suicide for Old People in Japan. What Did He Mean?”)

Famine Among the Inuit Led to “The Occasional Killing of Children Who Would Otherwise Starve”

Are we fundamentally better than the Inuit? Or has economic growth allowed us to have higher standards of behavior so we never must commit “the occasional killing of children who would otherwise starve”? In my Openness book I argue that people treat each other better when they live in a system of innovative dynamism that creates economic growth.

(p. 15) Peter Freuchen spent the winter of 1907 alone in the dark. A junior member of a Danish scientific expedition to northern Greenland, he was, in his own words, “just past 20, full of a lust for novel adventures,” and so, “like a fool,” he volunteered to spend the season manning a remote weather station. As wolves slaughtered his dogs and the icy condensation of his breath caused his cabin’s frozen walls to creep inward, his thoughts turned “sterile and unattractive” and he began having extended conversations with his cutlery. But the ordeal did not break him, for Freuchen had fallen in love with the Arctic.

Freuchen is the subject of Reid Mitenbuler’s “Wanderlust,” an attempt to reconcile the contradictions of, as Mitenbuler writes, “a highly sociable person who, somewhat inexplicably, was drawn to some of the most isolated places on Earth.” Mitenbuler paints Freuchen as the rare explorer who saw the world’s remote corners not as territory to be conquered but as a place to call home. Although narratively clumsy, it is a charming portrait of a man who traveled the world with an open mind, whose natural warmth never faltered in the cold.

As an explorer, Freuchen distinguished himself not through feats of heroism but by actually giving a damn about the people he met during his travels. After visiting Greenland on several lengthy expeditions, he came to stay in 1910, founding a trading post in Thule, in the island’s far north, in partnership with his friend Knud Rasmussen. He met the Inuit on their own terms, learning their language and eating their food, working alongside them to survive in an environment where one had to grow used to the reality of famine, starvation and even the occasional killing of children who would otherwise starve.

For the full review, see:

W. M. Akers. “The Land of Frozen Poop Chisels.” The New York Times Book Review (Sunday, March 5, 2023): 15.

(Note: the online version of the review has the date February 26, 2023, and has the title “Frozen Poop Chisels and Amputated Toes: A Life of Arctic Adventure.”)

The book under review is:

Mitenbuler, Reid. Wanderlust: An Eccentric Explorer, an Epic Journey, a Lost Age. New York: Mariner Books, 2023.

Allow Entrepreneurial Competition in Medicine by Ending Obamacare’s Ban on Physician-Owned Hospitals

(p. A17) A tiny paragraph in the enormous Affordable Care Act prohibits physicians from building or owning hospitals. Any existing physician-owned hospital built before 2010 is prohibited from growing beyond the size it was when the bill passed. This law limits competition, defies common sense and is likely contributing to higher prices for Medicare and reduced access to treatment for millions of Americans.

. . .

. . . recent research affirms the power of American entrepreneurship to lower costs and improve quality. Doctors, whether at the bedside or the forefront of scientific innovation, are well-suited to reimagine healthcare operations, lower costs and improve the quality of care.

Specialty physician-owned hospitals focused on cardiology and cardiac surgery were found to deliver higher-quality care than nonprofit hospitals, with lower rates of hospital readmission or mortality for high-risk surgery. Physician-owned specialty hospitals for orthopedic procedures, such as hip and knee replacements, offered lower costs and higher quality than nonprofit counterparts.

. . .

Healthy competition drives job creation, innovation and long-term economic growth. The federal government doesn’t prohibit plumbers from owning plumbing companies, radio hosts from owning radio stations or farmers from owning farmers markets. It’s time to reopen the free market in healthcare and let the power of competition do its work.

For the full commentary, see:

James Lankford and Brian J. Miller. “End ObamaCare’s Ban on Physician-Owned Hospitals.” The Wall Street Journal (Tuesday, Feb. 21, 2023): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date February 20, 2023, and has the same title as the print version.)

State Bureaucracies Did Not Nimbly and Effectively Spend Massive Pandemic Crisis Funds

(p. A1) . . . when the Biden administration gave Mississippi $18.4 million in mid-2021 to hire public health workers — part of $2 billion in grants to bolster the Covid work force at state and local health agencies nationwide — it appeared that help had, at long last, arrived.

But as of January [2023], 18 months later, Mississippi had spent just $3.6 (p. A14) million of its grant — less than a fifth. Its attempts to hire epidemiologists, nurses and other soldiers in the war against Covid had largely fallen flat. The state has lost one in 224 residents to Covid-19, one of the nation’s worst death rates, including 122 people in tiny Scott County alone.

Mississippi’s woes are an acute example of a larger public health failure that is reprised nearly every time a major health threat grabs headlines. The problem, experts say, is that Congress starves state and local health agencies of cash for even basic needs in quiet times. Then, when a crisis hits, it floods them with millions or even billions of dollars earmarked to battle the disease of the moment. And the sluggish machinery of Capitol Hill often ensures that most of the aid arrives only after the worst of the crisis has passed.

The $2 billion in Covid hiring grants is the latest example. Nationwide, states and localities had spent only $371 million of the money by December, or about 19 percent, according to the Centers for Disease Control and Prevention, the conduit for the funds.

. . .

The record is replete with other such fumbles.

Six months after the World Health Organization declared the H1N1 influenza pandemic over in mid-2010, states and localities had used just a third of the $1.4 billion in federal funds they had received to combat it. The outbreaks of the Ebola virus in 2014 and the Zika virus in 2016 also led to funding windfalls, but health experts say most of the money arrived late.

For the full story, see:

Sharon LaFraniere. “In Mississippi, Covid Millions Left Unspent.” The New York Times (Monday, Feb. 13, 2023): A1 & A14.

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

(Note: the online version of the story has the same date as the print version, and has the title “Why Mississippi, a Covid Hot Spot, Left Millions in Pandemic Aid Unspent.”)

“The 1619 Project” Shows How Government Policies “Discriminated Against African-Americans”

(p. A15) Hulu’s series “The 1619 Project” blames economic inequality between blacks and whites on “racial capitalism.” But almost every example presented is the result of government policies that, in purpose or effect, discriminated against African-Americans. “The 1619 Project” makes an unintentional case for capitalism.

The series gives many examples of government interventions that undercut free markets and property rights. Eminent domain, racial red lining of mortgages, and government support and enforcement of union monopolies figure prominently.

The final episode opens by telling how the federal government forcibly evicted black residents of Harris Neck, Ga., during World War II to build a military base. The Army gave residents three weeks to relocate before the bulldozers moved in, paying below-market rates through eminent domain. After the war, the government refused to let the former residents return. Violation of property rights is the opposite of capitalism.

For the full commentary, see:

David R. Henderson and Phillip W. Magness. “‘The 1619 Project’ Vindicates Capitalism.” The Wall Street Journal (Tuesday, Feb. 21, 2023): A15.

(Note: the online version of the commentary has the date February 20, 2023, and has the title “‘The 1619 Project’ on Hulu Vindicates Capitalism.”)

The commentary quoted above is related to Magness’s book:

Magness, Phillip W. The 1619 Project: A Critique. Great Barrington, Massachusetts: American Institute for Economic Research, 2020.

Communist China Fails Again at Flailing Efforts to Centrally Plan Fertility

(p. 1) In China, a country that limits most couples to three children, one province is making a bold pitch to try to get its citizens to procreate: have as many babies as you want, even if you are unmarried.

The initiative, which came into effect this month, points to the renewed urgency of China’s efforts to spark a baby boom after its population shrank last year for the first time since a national famine in the 1960s.

. . .

Many young Chinese adults, who themselves were born during China’s draconian one-child policy, are pushing back on the government’s inducements to have babies in a country that is among the most expensive in the world to raise a child.

. . .

(p. 12) Efforts by the ruling Communist Party to raise fertility rates — by permitting all couples to have two children in 2016, then three in 2021 — have struggled to gain traction. The new policy in Sichuan drew widespread attention because it essentially disregards birth limits altogether, showing how the demographic crisis is nudging the party to slowly relinquish its iron grip over the reproductive rights of its citizens.

“The two-child policy failed. The three-child policy failed,” said Yi Fuxian, a researcher at the University of Wisconsin-Madison who has studied Chinese population trends. “This is the natural next step.”

Sichuan, the country’s fifth-largest province with 84 million people, lifted all limits on the number of children that residents can register with the local government, . . .

For the full story, see:

Nicole Hong and Zixu Wang. “Public Is Wary Of China’s Push For Baby Boom.” The New York Times, First Section (Sunday, February 26, 2023): 1 & 12.

(Note: ellipses added.)

(Note: the online version of the story has the same date as the print version, and has the title “Desperate for Babies, China Races to Undo an Era of Birth Limits. Is It Too Late?”)

Elon Musk Got Rich the Old-Fashioned Way, He EARNED It

(p. B4) Elon Musk is tired, his back hurts and his mom wants him to get some sleep.

. . .

A self-described nanomanager, Mr. Musk has long waded deeply into the weeds of the companies he runs, including SpaceX and Tesla Inc., green up pointing triangle routinely working late into the night and sleeping little. His tenacity has led to superhuman-like accomplishments, such as landing space rockets and making electric cars sexy.

. . .

Since taking ownership of Twitter Inc. in late October [2022], Mr. Musk’s workload has exploded to more than 120 hours a week from as much as 80 hours before, he told investor Ron Baron in November at a conference.

“I go to sleep, I wake up, I work, go to sleep, wake up, work—do that seven days a week,” Mr. Musk said.

. . .

Even before buying Twitter, Mr. Musk wasn’t a “chill, normal dude,” as he once joked on “Saturday Night Live.” Mr. Musk has said he usually goes to sleep around 3 a.m. and typically gets six hours of shut-eye before waking and immediately checking his phone for any new emergencies.

These days, Mr. Musk has said he is sleeping at Twitter headquarters in San Francisco. He has even provided beds for employees.

. . .

Concerns about Mr. Musk’s health had circulated a few years ago, ignited by photos of him that appeared to show a new scar on his neck. In 2020, he confirmed he had two surgeries, the first a failure, to address neck pain.

His pain, Mr. Musk has said, traces to a birthday party thrown years ago by his second wife that was attended by a sumo wrestler.

Mr. Musk took to the ring and—according to him—managed to throw the 350-pound opponent, resulting in an injury to his spine. “It cost me smashing my c5-c6 disc & 8 years of mega back pain!” Mr. Musk said on Twitter last year.

. . .

Entrepreneur Arianna Huffington at one point in 2018 pleaded with Mr. Musk to take better care of himself.

. . .

He responded with a tweet sent at 2:32 a.m.: “Ford & Tesla are the only 2 American car companies to avoid bankruptcy. I just got home from the factory. You think this is an option. It is not.”

For the full story, see:

Tim Higgins. “Musk’s Frantic Schedule Comes at a Personal Cost.” The Wall Street Journal (Monday, Feb. 6, 2023): B4.

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

(Note: the online version of the story was updated February 5, 2023, and has the title “When Does Musk Sleep? He Speaks of Limits to Fixing Twitter, Back Pain.”)

Janega Claims That Europeans in Middle Ages Washed Themselves Daily

If the claims in the book quoted below turn out to be well-documented, then I may need to modify a few sentences in my Openness book, if a new edition ever appears.

(p. A15) A longstanding myth holds that people in medieval Christian Europe didn’t bathe. In fact, the Middle Ages subscribed heartily to the adage “cleanliness is next to godliness.” Thinkers of the period considered physical beauty to represent spiritual purity, and they looked at hygiene in the same way: If one’s body was impure, it would by definition be unattractive and out of harmony. If it had any imperfections, one would best address them through cleansing. For women, in particular, cleanliness was one of the very highest virtues.

The daily wash usually involved collecting water in a ewer, heating it, then pouring it into a large basin to be used for scrubbing. Baths in a wooden tub would happen less often, given it was a world without plumbing. Water is heavy, and collecting it, heating it, and then getting it from the kettle into the bathtub was difficult. Baths also required space, which was at a premium in most households.

Luckily, there were a few ways to bathe outside the home. In warmer months, you could simply find a pond or a lake, and you were good to go. But in January this could be a problem, and that was where bathhouses came in. Bathhouses took the laborious and difficult work of drawing and heating water and monetized it. Most towns boasted at least one professional bathhouse, while cities played host to a number of competing establishments.

For the full essay, see:

Eleanor Janega. “The Middle Ages Were Cleaner Than We Think.” The Wall Street Journal (Saturday, Jan. 14, 2023): A15.

(Note: the online version of the essay has the date January 12, 2023, and has the same title as the print version.)

The essay quoted above is based on the author’s book:

Janega, Eleanor. The Once and Future Sex: Going Medieval on Women’s Roles in Society. New York: W.W. Norton, 2023.

Americans “Vote with Their Feet” Against Higher Taxes

(p. A15) The Tax Foundation’s 2021 State Business Tax Climate report ranks California’s state and local taxes as the second highest in the nation, just below New Jersey and above New York. People are fleeing these states.

. . .

I analyzed all 50 states’ net domestic migration levels and compared those levels with each state’s overall tax ranking. The ranking includes a weighing of taxes on corporate profits, individual income, sales, property and unemployment insurance.

The 10 states with the lowest taxes gained an average of 948 per 100,000 total population. For states that ranked 11th through 20th on taxes, the average was 457. For states ranking 21st to 30th, the gain was only 97. Net domestic migration turned negative for states ranking 31st to 40th with a loss of 141. And for the 10 states with the highest taxes, the average loss was 809 per 100,000.

These findings strongly reinforce the popular saying that people vote with their feet. They will leave places with relatively high taxes for those with lower levies. It may surprise Mr. Newsom, but people generally want to keep more of the money they earn.

For the full commentary, see:

James L. Doti. “Californians Aren’t the Only Tax Refugees.” The Wall Street Journal (Thursday, Jan. 12, 2023): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date January 11, 2023, and has the same title as the print version.)

The Tax Foundation’s report mentioned above is:

Walczak, Jared, and Janelle Cammenga. “2021 State Business Tax Climate Index.” Washington, D.C.: Tax Foundation, 2020.

Entrepreneur Andy Yen’s Technology Enables Russians to Elude Censors

(p. A1) After Moscow erected a digital barricade in March [2022], blocking access to independent news sites and social media platforms to hide information about its unfolding invasion of Ukraine, many Russians looked for a workaround. One reliable route they found came from a small Swiss company based nearly 2,000 miles away.

The company, Proton, provides free software that masks a person’s identity and location online. That gives a user in Russia access to the open web by making it appear that the person is logging in from the Netherlands, Japan or the United States. A couple of weeks after the internet blockade, about 850,000 people inside Russia used Proton each day, up from fewer than 25,000.

That is, until the end of March, when the Russian government found a way to block Proton, too.

Targeting Proton was the opening salvo of a continuing back-and-forth battle, pitting a team of about 25 engineers against a country embarking on one of the most aggressive censorship campaigns in recent memory.

Working from a Geneva office where the company keeps its name off the building directory, Proton has spent nine pressure-packed months repeatedly tweaking its technology to avoid Russian blocks, only to be countered again by government censors in Moscow. Some employees took (p. A9) Proton off their social media profiles out of concern that they would be targeted personally.

The high-stakes chess match mirrors what is playing out with growing frequency in countries facing coups, wars and authoritarian rule, where restricting the internet is a tool of repression. The blocks drive citizens to look for workarounds. Engineers at companies like Proton think up new ways for those people to secretly reach the open web. And governments, in turn, seek out new technical tricks to plug leaks.

. . .

Companies rarely discuss being targeted by an authoritarian government out of fear of escalating the conflict. But Andy Yen, Proton’s founder and chief executive, said that after a period of trying to keep its “head down,” Proton wanted to raise awareness about the increasing sophistication of governments, in Russia and elsewhere, to block citizens from reaching the open web and the need for technologists, companies and governments to push back.

. . .

“We’re gearing up for a long fight,” Mr. Yen said in an interview at the company’s office. “Everybody hopes this will have a happy ending, but it’s not guaranteed. We don’t see the light at the end of the tunnel, in fact, but you keep going because if we don’t do it, then maybe nobody else will.”

. . .

The battle took on a “Spy vs. Spy” dynamic in Proton’s headquarters. Mr. Yen said a network of people within the government, telecommunications firms and civil society groups had helped Proton operate in Russia, providing access to local networks and sharing intelligence about how the censorship system worked. But those contacts began to go dark as the Kremlin’s crackdown on dissent intensified.

. . .

Mr. Yen was interrupted during a staff meeting in mid-July with news that Russian censors had come up with an even more elaborate block. A corporate chart from the time shows use dropping off a cliff. Russian engineers had identified what is known as an authentication “handshake,” the vital moment when Proton’s VPN connection gets established before reaching the wider web. Blocking the link made Proton’s service essentially unusable.

“We had no idea what was happening and how they were doing it,” Mr. Cesarano said.

By August, after working around the clock for days to find a fix, Proton acknowledged defeat and pulled its app from Russia. The company has spent the months since then developing a new architecture that makes its VPN service harder to identify because it looks more like a regular website to censorship software scanning a country’s internet traffic. Proton has been successfully testing the system in Iran, where Proton has seen a sharp increase in VPN use during recent political demonstrations.

In Russia, Proton has reintroduced its apps using the new system. Mr. Yen acknowledged that it probably wasn’t a long-term fix. He has confidence in the new technology, but figures Russian engineers will eventually figure out a new way to push back, and the game will continue.

For the full story, see:

Adam Satariano and Paul Mozur. “The Cat-and-Mouse Battle for Russia’s Internet.” The New York Times (Wednesday, December 7, 2022): A1 & A9.

(Note: ellipses, and bracketed year, added.]

(Note: the online version of the story was updated Dec. 9, 2022, and has the title “Inside the Face-Off Between Russia and a Small Internet Access Firm.” )