To End Inflation, Fed Should Commit “To Good Policy Rules,” and Not Stray to Increase Jobs

(p. A9) Growing up in Glens Falls, N.Y., Edward C. Prescott got an insider’s view of business from chats with his father, an engineer and later comptroller for a global supplier of pigments. Those insights made the economics courses he took in college seem less theoretical and more relevant than they might have seemed to other students.

. . .

With Dr. Kydland, he published an influential 1977 paper called “Rules Rather Than Discretion: The Inconsistency of Optimal Plans,” concluding that policy makers could err by straying from long-term goals to address short-run problems. For instance, central bankers might be tempted to ease up on their commitments to contain inflation in the short run as a way to boost employment. If so, the professors argued, people might start assuming that prices were out of control, creating a psychology that led to faster inflation for long periods.

Sticking to a sound policy was far more effective than jolting the economy with frequent adjustments, they argued. “You should not think in terms of controlling the economy,” Dr. Prescott said. “That leads to bad outcomes. You should think in terms of committing to good policy rules.”

. . .

Though revered by many of his students and colleagues, Dr. Prescott sometimes baffled them. The problem, he once explained, was that he thought much faster than he could talk. He sometimes jumped from one topic to another with no transition.

“His brain did not work like other people’s,” said Timothy Kehoe, an economics professor at the University of Minnesota who worked with Dr. Prescott for four decades, “and in some ways that was a tremendous advantage.”

For the full obituary, see:

James R. Hagerty. “Economist’s Policy Advice: Stick to Long-Term Plan.” The Wall Street Journal (Saturday, November 12, 2022): A9.

(Note: ellipses added.)

(Note: the online version of the obituary was updated Nov. 8, 2022, and has the title “Nobel-Winning Economist Edward C. Prescott Dies at 81.”)

Forest Service Banned Private Logging to Thin Forests; Then Started an Uncontrolled “Controlled” Fire to Thin Same Forests

(p. A11) SEATTLE — In a high-altitude landscape parched by drought, U.S. Forest Service crews took advantage of some stable weather in eastern Oregon this month and prepared to burn off some thick underbrush and shrubbery at the edge of the Blue Mountains, part of an expanding strategy to remove forest fuel that can turn fires into conflagrations.

The target was a 300-acre tract of woodlands in the Malheur National Forest, adjacent to a private cattle ranch. But the controlled fire that the crew set on the afternoon of Oct. 19 [2022] jumped a containment line and charred through a portion of the nearby ranch. Two sisters from the family-owned Windy Point Cattle Company made their way through the smoke-filled landscape for a furious confrontation with the Forest Service’s “burn boss,” Ricky Snodgrass, and then dialed 911.

What happened next, federal officials say, was highly unusual in the modern history of the Forest Service and its programs for managing federal lands across the country. The Grant County sheriff arrived on scene, placed Mr. Snodgrass in handcuffs and sent him to jail.

. . .

With climate change driving an increase in the size, frequency and ferocity of wildfires, the Forest Service adopted a plan this year to step up those prescribed burns, and also more aggressively thin forest stands with strategic logging programs.

. . .

The Forest Service’s operations in this part of Oregon have long been the subject of contention in Grant County, where the U.S. government manages some 60 percent of the land.

Locals have long stewed over federal land management policies, including logging restrictions that have contributed to declines in timber production and the shuttering of the region’s sawmills.

For the full story, see:

Mike Baker. “A Strategy to Protect Forests Reopens Old Wounds in Oregon.” The New York Times (Saturday, October 29, 2022): A11.

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

(Note: the online version of the story has the date Oct. 28, 2022, and has the title “Prescribed Burns Are Encouraged. Why Was a Federal Employee Arrested for One?”)

“If Pro Is the Opposite of Con, Is Progress the Opposite of Congress?”

(p. B12) Gallagher, who became one of the most recognizable comedians of the 1980s for an outrageous act that always concluded with him smashing a watermelon with a sledgehammer, died on Friday [Nov. 11, 2022] at his home in Palm Springs, Calif.

. . .

In 1987, United Press International reported that researchers at Loma Linda University in Southern California studying laughter took blood samples from 10 medical students while they watched Mr. Gallagher in action. Not only did they laugh uproariously; their white blood cells increased. The comedian, the scientists said, appeared to have boosted the subjects’ immune systems.

. . .

Much of Mr. Gallagher’s humor was based on wordplay. (“I don’t know why they say you have a baby. The baby has you.” “If pro is the opposite of con, is progress the opposite of Congress?”) But he also prided himself on being outrageous and even offensive, defying political correctness. (Deaf people, he said, should be required to live near airports.) Many people, especially in his later years, felt his jokes about racial groups, gay people and women crossed a line.

“Look around — see any Mexicans?” he said during one 2010 show. “They’ll be here later for the cleanup.”

In 2011, Mr. Gallagher was a guest on his fellow comedian Marc Maron’s podcast but walked out when Mr. Maron asked him about this and similar jokes. Some critics agreed that his act had gone too far. But he never toned it down.

For the full obituary, see:

Douglas Martin. “Gallagher, 76, Who Smashed Watermelons With a Sledgehammer, Dies.” The New York Times (Saturday, November 12, 2022): B12.

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

(Note: the online version of the obituary was updated Nov. 14, 2022, and has the title “Gallagher, Watermelon-Smashing Comedian, Is Dead at 76.”)

With Both Covid and Monkeypox, C.D.C. Wrongly “Tried to Maintain Control Over Testing”

(p. A14) Too often in a crisis, government officials look for easy solutions, with dramatic and immediate impact. But there are none for managing pandemics.

“A pandemic is by definition a problem from hell. You’re vanishingly unlikely to be able to remove all of its negative consequences,” said Bill Hanage, an epidemiologist at the Harvard T.H. Chan School of Public Health.

Instead, he added, officials should bet on combinations of imperfect strategies, with an emphasis on speed over accuracy.

In both the coronavirus pandemic and the monkeypox outbreak, for example, the C.D.C. at first tried to maintain control over testing, instead of disseminating the responsibility as widely as possible. The move led to limited testing, and left health officials blind to the spread of the viruses.

The Food and Drug Administration was slow to help academic labs develop alternatives for testing, and encouraged the highest quality of diagnosis. It may be reasonable for officials to ask which test is faster or which one produces the least errors, Dr. Hanage said, but “all of them are better than not doing anything.”

For the full commentary, see:

Apoorva Mandavilli. “Unprepared for Covid and Monkeypox. And the Next Outbreak, Too.” The New York Times (Saturday, October 1, 2022): A14.

(Note: the online version of the commentary was updated Sept. 30, 2022, and has the title “New Infectious Threats Are Coming. The U.S. Probably Won’t Contain Them.”)

Argentines Prefer “Cratered” Cryptocurrency Over Hyperinflating Pesos or Hauling “Large Stashes” of Dollar Bills

(p. A4) Even though the cryptocurrency market has cratered in recent months, many Argentines see it as a safe haven ‌in a country where surging inflation and a grinding economic crisis have battered the national currency, the peso, and people’s bank accounts.

“Money here is like ice cream,” said Marcos Buscaglia, an economist in Buenos Aires, the capital. “If you keep a peso for too long, it melts in terms of how much you can buy with it.”

. . .

Across the world, people in low-income and emerging countries have become the biggest users of cryptocurrencies, according to various reports, overtaking the United States and Europe.

Digital coins are prized in countries where the local money is volatile and where governments have made it harder for citizens to buy foreign currencies.

. . .

Argentina provides some clues about the appeal of cryptocurrencies.

Argentines have long looked to the dollar as a safe haven. Saving in dollars “is tattooed into our DNA,” said Daniel Convertini, 34, who works in communications for a ride-hailing company. “I learned to do it from my dad and my grandfather, not because I read it in some financial newspaper.”

. . .

. . . digital currencies provide an advantage by not requiring people to haul around large stashes of bills.

For the full story, see:

Ana Lankes. “Crypto Is Tumbling. But to Argentines, It Still Beats Pesos.” The New York Times, First Section (Sunday, August 21, 2022): A4.

(Note: ellipses added.)

(Note: the online version of the story has the date Aug. 20, 2022, and has the title “Crypto Is Tumbling, but in Argentina It’s Still a Safer Bet.”)

Regulators Slowed Development of Moderna Vaccine

How much credit for the Covid vaccines goes to government and how much to entrepreneurs? Loftus’s book focuses on Moderna, and makes the case that government deserves considerable credit, mostly for early funding. A case can be made that at least as much focus should be given to BioNTech. If BioNTech had been the focus, that case might have been harder to make.

(p. C5) In late 2019, just weeks before the world heard of Covid-19, scientists from the National Institute of Allergy and Infectious Diseases visited the new manufacturing plant of a small, 9-year-old biotechnology company called Moderna. The company’s leaders boasted that the new plant in Norwood, Mass., could make a batch of a newly designed vaccine in 60 days—rapid by standard timelines that usually take 12 months or more.

. . .

One Friday afternoon in August [2020], the company was expecting delivery of large air-handling units to help expand production at its factory. Moderna had hired construction cranes to lift the tractor-trailer-sized units onto the roof of its plant. But delivery was delayed because the supplier lacked all the state permits needed to transport oversize cargo from the Midwest to Massachusetts. If the units didn’t get there by Sunday, Moderna would lose the cranes and a week of production.

Frantic, Moderna executives called Warp Speed officials. They gave the job to an Army colonel, who leaned on state officials, who in turn sent state police with sirens blaring to escort the delivery to their state line and then hand off the convoy to a new escort. The precious cargo rolled into Moderna’s plant on Sunday morning, in time for the cranes.

The much larger and older Pfizer, meanwhile, mostly opted out of Operation Warp Speed for fear it would slow the company down. As for Moderna’s collaboration, it generated enough friction to make the company’s chief medical officer during 2020, Tal Zaks, question at times whether it was worth it to accept the federal assistance.

Dr. Zaks had wanted to use a private contract research organization to run the whole trial, but NIAID officials wanted their clinical-trial network involved. Eventually, Dr. Zaks backed off, and both entities participated. “I realized we were at an impasse, and I was the embodiment of the impasse,” Dr. Zaks said.

Next, when Moderna’s 30,000-person study began enrolling volunteers in July 2020, the subjects weren’t racially diverse enough. Moncef Slaoui, who led Warp Speed’s vaccine efforts, and Dr. Fauci began holding Saturday Zoom calls with Mr. Bancel and other Moderna leaders to “help coax and advise Moderna how to get the percentage of minorities up to a reasonable level,” Dr. Fauci recalled.

Drs. Fauci and Slaoui wanted Moderna to slow down overall enrollment, to give time to find more people of color. Moderna executives resisted at first. “That was very tense,” Dr. Slaoui said. “Voices went up, and emotions were very high.” Moderna ultimately agreed, and the effort worked, but it cost the trial about an extra three weeks. Later, Mr. Bancel called the decision to slow enrollment “one of the hardest decisions I made this year.”

For the full essay, see:

Peter Loftus. “The Partnership That Made the First U.S. Covid Vaccine.” The Wall Street Journal (Saturday, July 30, 2022): C5.

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

(Note: the online version of the essay has the date July 29, 2022, and has the same title as the print version.)

The essay quoted above is an adaptation from Loftus’s book:

Loftus, Peter. The Messenger: Moderna, the Vaccine, and the Business Gamble That Changed the World. Boston: Harvard Business Review Press, 2022.

California $113 Billion Bullet Train “Is a Case Study” in How Boondoggle Infrastructure Grows “Too Big to Fail”

(p. A1) LOS ANGELES — Building the nation’s first bullet train, which would connect Los Angeles and San Francisco, was always going to be a formidable technical challenge, pushing through the steep mountains and treacherous seismic faults of Southern California with a series of long tunnels and towering viaducts.

But the design for the nation’s most ambitious infrastructure project was never based on the easiest or most direct route. Instead, the train’s path out of Los Angeles was diverted across a second mountain range to the rapidly growing suburbs of the Mojave Desert — a route whose most salient advantage appeared to be that it ran through the district of a powerful Los Angeles county supervisor.

The dogleg through the desert was only one of several times over the years when the project fell victim to political forces that have added billions of dollars in costs and called into question whether the project can ever be finished.

Now, as the nation embarks on a historic, $1 trillion infrastructure building spree, the tortured effort to build the country’s first high-speed rail system is a case study in how ambitious public works projects can become perilously encumbered by political compromise, unrealistic cost estimates, flawed engineering and a determination to persist on projects that have become, like the crippled financial institutions of 2008, too big to fail.

. . .

Political compromises, the records show, produced difficult and costly routes through the state’s farm belt. They routed the train across a geologically complex mountain pass in the Bay Area. And they dictated that construction would begin in the center of the state, in the agricultural heartland, not at either of the urban ends where tens of millions of potential riders live.

The pros and cons of these routing choices have been debated for years. Only now, though, is it be-(p. A15)coming apparent how costly the political choices have been. Collectively, they turned a project that might have been built more quickly and cheaply into a behemoth so expensive that, without a major new source of funding, there is little chance it can ever reach its original goal of connecting California’s two biggest metropolitan areas in two hours and 40 minutes.

When California voters first approved a bond issue for the project in 2008, the rail line was to be completed by 2020, and its cost seemed astronomical at the time — $33 billion — but it was still considered worthwhile as an alternative to the state’s endless web of freeways and the carbon emissions generated in one of the nation’s busiest air corridors.

Fourteen years later, construction is now underway on part of a 171-mile “starter” line connecting a few cities in the middle of California, which has been promised for 2030. But few expect it to make that goal.

Meanwhile, costs have continued to escalate. When the California High-Speed Rail Authority issued its new 2022 draft business plan in February, it estimated an ultimate cost as high as $105 billion. Less than three months later, the “final plan” raised the estimate to $113 billion.

The rail authority said it has accelerated the pace of construction on the starter system, but at the current spending rate of $1.8 million a day, according to projections widely used by engineers and project managers, the train could not be completed in this century.

For the full story, see:

Ralph Vartabedian. “Costs Soaring As Bullet Train Goes Nowhere.” The New York Times (Monday, October 10, 2022): A1 & A15.

(Note: ellipsis added.)

(Note: the online version of the story has the date Oct. 9, 2022, and has the title “How California’s Bullet Train Went Off the Rails.”)

Non-Partisan Congressional Budget Office Estimates Cost of Biden Student Loan Forgiveness at $400 Billion

(p. A1) WASHINGTON — President Biden’s plan to erase significant amounts of student loan debt for tens of millions of Americans could cost about $400 billion, the nonpartisan Congressional Budget Office said in a report Monday [Sept. 26, 2022], making it one of the costliest programs in the president’s agenda.

The C.B.O. said the price tag might rise even higher because of Mr. Biden’s decision to extend a pause on federal student loan repayments through the end of the year, which could end up costing some $20 billion. The report gauged the cost over a period of 30 years, though the bulk of the effects to the economy would be felt over the next decade.

. . .

. . . , critics have accused the Biden administration of hiding the plan’s true cost.

Marc Goldwein, the senior vice president for the Committee for a Responsible Federal Budget, said that the C.B.O. score did not take into account a significant part of (p. A13) the administration’s loan relief program: a plan to reduce payments for future borrowers who go on to earn low incomes after college, which outside analysts say could host hundreds of billions of dollars more.

“You’re basically buying a very expensive lottery ticket,” Mr. Goldwein said. “When you’re taking out the loan, you’re going to have no idea of how much you’re going to be paying back.”
Monday’s report, issued by a nonpolitical budget scorekeeper, is one of several attempts to estimate the total cost of the program, which Mr. Biden enacted using executive action rather than legislation.

For the full story, see:

Katie Rogers and Jim Tankersley. “Cost of Erasing Students’ Debt Will Be Steep.” The New York Times (Tuesday, September 27, 2022): A1 & A13.

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

(Note: the online version of the story has the date Sept. 26, 2022, and has the title ‘White House Student Loan Forgiveness Could Cost About $400 Billion.”)

Government’s “Controlled Burn” Created an Environmental “Catastrophe”

(p. A1) Heavy monsoon rains would normally be cause for celebration in the drought-parched mountains of northeastern New Mexico, where the Rockies meet the Great Plains, especially after the largest wildfire in state history came within a mile of torching the region’s largest community this spring.

. . .

Instead of replenishing reservoirs, the downpours are flooding a burn scar left by the blaze known as the Calf Canyon/Hermits Peak fire, releasing contaminants into private wells and overwhelming Las Vegas’s main water (p. A16) supply with ashy sludge.

It is the latest chapter in a catastrophe created by the federal government when Forest Service employees lost control of not just one but two prescribed burns set this spring to clear out undergrowth. That sparked a vast blaze that destroyed hundreds of homes and displaced thousands of people across a fire zone larger than the city of Los Angeles.

. . .

Mr. Trujillo, the mayor of Las Vegas, emphasized that the federal government, which was responsible for starting the fire, should cover the costs of securing the town’s water supply over both the short and long term. “We intend to bill them for every cent,” he said. “I’m having to hold their feet to the fire, no pun intended.”

For the full story, see:

Simon Romero. “A Controlled Burn Left Scars and a Water Crisis.” The New York Times (Tuesday, September 27, 2022): A1 & A16.

(Note: ellipses added.)

(Note: the online version of the story was updated Sept. 28, 2022, and has the title ‘How New Mexico’s Largest Wildfire Set Off a Drinking Water Crisis.” Where there are minor differences in wording between versions, the passages quoted above follow the online version.)

President Grover Cleveland Stuck with His Free Market Principles

(p. C7) Troy Senik, a former White House speechwriter, has written “A Man of Iron: The Turbulent Life and Improbable Presidency of Grover Cleveland” to rescue his subject from obscurity.

. . .

Mr. Senik says that Cleveland should be remembered as “one of our greatest presidents.”

. . .

He entered the White House favoring tariff cuts, the gold standard, limited government and the expansion of the civil service to reduce the power of patronage bosses. When he retired 12 years later, his principles were the same. He vetoed more bills in his first term than all 21 of his predecessors combined.

. . .

(p. C9) When Texas suffered a drought, he vetoed a bill to provide seeds to farmers, warily explaining: “Federal aid in such cases encourages the expectation of paternal care . . . and weakens the sturdiness of our national character.”

. . .

After triumphing in his first White House bid he declared, “Henceforth I must have no friends,” a rather monkish notion of virtue and a fitting template for how he governed. At the end of that term, he was advised not to push for tariff reform before his re-election but ignored the advice, observing: “What is the use of being elected or reelected unless you stand for something?”

“A Man of Iron” is a tribute to an incorruptible man, a rare politician who rose above partisanship.

For the full review, see:

Roger Lowenstein. “Oddly, Both Principled And President.” The Wall Street Journal (Saturday, Sept. 17, 2022): C7 & C9.

(Note: ellipses between paragraphs added; ellipsis within paragraph, in original. Bracketed word also added.)

(Note: the online version of the review has the date September 16, 2022, and has the title “‘A Man of Iron’ Review: Grover Cleveland, Honest to a Fault.”)

The book under review is:

Senik, Troy. A Man of Iron: The Turbulent Life and Improbable Presidency of Grover Cleveland. New York: Threshold Editions, 2022.

The “Silly, Elitist,” and “Venal” in Modern Art

(p. A26) Suzi Gablik, an art critic, author and theorist who once championed modernism — and was once an artist of that persuasion — but found fame when she turned against it, died on May 7 [2022] at her home in Blacksburg, Va.

. . .

At the invitation of the United States government, she began to lecture about American art around the world, an experience that altered her thinking about contemporary art. It was not just daunting but embarrassing, as she wrote later, to try to describe “some of the aggressively absurd forms of art that dominated the decade of the 1970s in America: Vito Acconci putting a match to his breast and burning the hair of his chest; Chris Burden crawling half-naked across broken glass.”

She began to feel that modernism — her religion — had reached its limits. Its provocations were no longer transgressive but silly, elitist and even venal, having been co-opted by corporate sponsors and the growing art market. Her salvo of a book, “Has Modernism Failed?,” arrived with a bang in 1984, and all of a sudden she was a sought-after speaker in her own country, a dissident voice pilloried by some critics but welcomed by others.

. . .

Decrying the pointlessness and commercialism of contemporary art was hardly a new position — Tom Wolfe had gleefully staked it out in “The Painted Word,” in 1975 — but Ms. Gablik’s book nonetheless struck a chord.

For the full obituary, see:

Penelope Green. “Suzi Gablik, Art Critic and Author Who Took Modernism to Task, Dies at 87.” The New York Times (Saturday, May 21, 2022): A26.

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

(Note: the online version of the obituary has the date May 20, 2022, and has the title “Suzi Gablik, Art Critic Who Took Modernism to Task, Dies at 87.”)

Gablik’s “salvo” against modern art is:

Gablik, Suzi. Has Modernism Failed? Revised 2nd ed. New York: Thames & Hudson, 2004 [1984].

As a student, I greatly annoyed one of my philosophy professors when I favorably quoted:

Wolfe, Tom. The Painted Word. New York: Farrar, Straus & Giroux, Inc., 1975.