Trump's Proposal of a Universal 10 Percent Tariff Is Economic and Political Idiocy

If a presidential candidate said that they would increase your taxes by 10 percent, odds are that you would not vote for that person. Yet in spite of being barraged with criminal charges, that is exactly what former President Donald Trump did. Earlier this month during a Fox News interview, Trump proposed that if re-elected, he would impose a 10 percent tariff on all consumer goods entering into the United States. 

Trump justified the tariff by saying "that money would be used to pay off the debt." Trump opined that the tariffs would not be so onerous that it would dissuade foreign companies selling goods to the United States, but it would be enough to raise a lot of money. He also thinks that it would "put a ring around the economy" in the hopes of boosting domestic production. It sounds like a win-win, right? Not when you look at the economic effects of a tariff....

Let's start with the fact that a tariff is a tax imposed on the import or export of goods between countries. These taxes are most typically used to encourage or safeguard an industry. Trump's rationale used in the interview has to do with collecting tax revenue for the government. We bought $3.2 trillion of goods and services last year. With a 10 percent tariff, it would mean a tax revenue of about $320 billion, which would hardly make a dent in the U.S. debt of $32.8 trillion. Domestic producers also see a bit of a boost in business. 

Who ends up paying for the tariff? Yes, foreign producers indirectly pay in that they have less business. However, it is domestic consumers pay for the tariff in the form of more expensive consumer goods. Then there is the deadweight loss, which is a loss of economic productivity as a result of the inefficiency of taxation. In short, the politically connected producers and government coffers benefit at the expense of the American taxpayer. You can read more from my 2016 analysis of the adverse economic effects of tariffs from when Trump first proposed tariffs. 

This is not mere economic theory. We have already seen what happened when Trump previously imposed tariffs. I worried about this in 2017 with Trump's tariffs on aluminum and steel, in no small part because U.S. steel tariffs imposed in 2002 cost 200,000 U.S. jobs. History repeated itself with Trump. There were 6,000 jobs added to the steel industry, but at what cost? According to the Wall Street Journal, at the cost of declining steel demand, higher prices, and 75,000 U.S. manufacturing jobs. The higher metal prices ended up costing the American people $11.5 billion annually. That was only aluminum and steel. The Section 301 tariffs imposed on China caused a reduction of U.S. real income by $1.4 billion per month (Amiti et al., 2019). 

What was the total effect of Trump's tariffs? The American Action Forum calculated that these tariffs have cost the American people $51 billion annually. The Tax Foundation projects that the cost of Trump's tariffs are a GDP lowered by 0.21 percent, wages reduced by 0.14 percent, and 166,000 fewer full-time equivalent (FTE) jobs. 

What about Trump's new tariff proposal? According to the Tax Foundation, a 10 percent universal tariff would cost $300 billion a year, eliminate 505,000 full-time equivalent (FTE) jobs, and reduce the size of the U.S. economy by 0.7 percent. To put that cost into context, such a tax would be the largest tax increase since the end of World War II, or a $2,600 tax hike per household. 

It is not merely the economic factor that is worrisome. Imposing such a tax would be declaring a trade war on every country, including our allies. Trump would be in violation of numerous trade agreements. Not only would it erode global trust in the U.S. government, but it could plausibly trigger an escalation of global economic chaos. In 1930, President Hoover passed the Smoot-Hawley Tariff Act to protect the U.S. economy. I would argue that it was one of the worse public policy decisions made during peacetime...at least before the COVID lockdowns. It was so oppressive and catastrophic that the tailspin from the retaliatory tariffs led to the economic downturn of the Great Depression. 

We do not have to go that far back in economic history to imagine how other countries would respond. We have already seen how deleterious it can be with Trump's tariffs. The U.S. Department of Agriculture released a report (Morgan et al., 2022) regarding the retaliatory agricultural tariffs in response to Trump's aluminum and steel tariffs. USDA found that from mid-2018 to the end of 2019, the U.S. lost more than $27 billion in agricultural exports. That does not even factor in the trade war that has escalated with China since Trump was elected into office, although it did very little to push U.S. firms out of China or nothing to accelerate foreign direct investment outflows (Vortherms and Zhang, 2021).  

We know from decades of economic data that tariffs reduce employment, economic productivity, and output, as is illustrated by a report from the International Monetary Fund (Furceri et al., 2019). Trump continues to show us that he is clueless as to how international trade works. Hopefully, this is only campaign rhetoric to drum up voters because actually implementing this tariff would hurt the voters he purports to help. Yet his past record with tariffs suggests otherwise. Sadly, President Biden is not much of an improvement. Biden either extended most of Trump's tariffs or swapped them out for different trade restrictions. While I will not hold my breath, I hope that the next president of the United States is capable of understanding the importance of having liberalized markets and minimizing trade restrictions.

The Argument that "Colorblindness Is Racism" Is Woke Doublespeak

On August 28, 1963, Martin Luther King Jr. delivered an iconic speech. Sixty years ago to the day, this preacher and activist told us he had a dream. In his famous "I Have a Dream" speech, MLK said that "I have a dream deeply rooted in the American dream...I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character." This speech symbolized the idea of a post-racial America, one in which race did not ultimately determine what kind of person one ended up being.

I would wager that if MLK gave that speech today, the woke crowd would have called MLK a race-baiter, a Right-winged nut job, an Uncle Tom, or worse. Color-blindness was once considered a progressive viewpoint (progressive in the literal sense, not the regressive ideology permeating on the Left today). 

The first call for a colorblind society came in 1865 from the President of the Anti-Slavery Society, Wendell Phillips. He ended up being nicknamed "Abolition's golden trumpet," not to mention an advocate for Native Americans. According to George Lewis Ruffin, who was the first African-American judge in the United States, Phillips was "wholly colorblind and free from prejudice." Supreme Court Justice Thurgood Marshall, who was the first African-American Supreme Court Justice, opined "that the Constitution is colorblind is our dedicated belief." Colorblindness was also the first argument that the NAACP made in their appellate brief of the Brown v. Board of Education case. These are far from being racist moments in history. On the contrary, they paved the way for the Civil Rights movement of the 1960s.

It takes a fair amount of historic amnesia to argue that colorblindness is racist or the work of the Far Right. Until recently, it would have been considered the ideal to aspire towards, the one in which we could put the ideals of the Declaration of Independence fully into practice. The shift against colorblindness is more indicative of how the political Left has changed than anything (more on that later). For those on the woke Left, the idea of color blindness is racist, denies the lived experience of other people, and acts as a form of gaslighting. To succinctly quote an argument from Psychology Today that encapsulates this line of thinking, "Colorblindness creates a society that denies their negative racial experiences, rejects their cultural heritage, and invalidates their unique perspectives."

This is not to say that there has never been racism in this country or that race does not have the potential to be a factor in one's story because both would be false. Conversely, to say that race is the primary or sole factor that determines one's life is equally false. This leads to another issue, which is that a major problem with the arguments against colorblindness is a fundamental misunderstanding of the concept: 

To interpret 'color-blind' so literally is to misunderstand it, perhaps intentionally. 'Color-blind' is an expression like 'warm-hearted': it uses a physical metaphor to encapsulate an abstract idea. To describe a person as warm-hearted is not to say something about the temperature of that person's heart, but about the kindness of his or her spirit. Similarly, to advocate for color-blindness is not to pretend you don't notice color. It is to endorse a principle: we should strive to treat people without regard to race, in our public policy and our private lives. 

This principle is not about "I don't see color," but rather that I do not assume that everyone has the same personality, values, or life story simply because they have a similar or identical skin color. To quote Supreme Court Justice Neil Gorsuch from the recent affirmative action case:

The category of 'Black or African American' covers everyone from a descendant of enslaved persons who grew up poor in the rural South, to a first-generation child of wealthy Nigerian immigrants, to a Black-identifying applicant with multiracial ancestry whose family lives in a a typical American suburb.

I view people as individuals as complex people in which race can be one of many factors that account for the tapestry of their life story. Racial minorities can have a diversity of experiences, opinions, and values, which is why it does not make sense to paint any racial group, regardless of skin color, with such broad strokes. When I say "I do not see color," I do not mean that I have a deficiency with my eyesight or that I am oblivious to history or what happens in society. Colorblindness means that I do not believe that the color of one's skin has any bearing on one's merit or character.  

One of the definitions of racism in Oxford Dictionary is "the belief that some races are better than others, or a general belief about a group based only on their race (own emphasis added)." This definition is lost on much of the political Left in the United States. If you look at an individual and make assumptions about them solely or primarily on the color of their skin, is that not racism? 

As I brought up three years ago, the woke Left has a habit of making such broad generalizations about white people and the nonexistent notion of "white culture" that those generalizations end up being racist. Under this anti-racist mindset, they do not take issue with it because white people are "supposedly" the oppressors and it is thus permissible because "they are not the minority."

Racism is about determining the worth of a person based on their skin color. Colorblindness is about saying that race does not factor into one's character, values, or moral rectitude. If you do not want to be racist, then colorblindness is precisely what you should be aiming for. 

The doublespeak comes in when saying that "striving to treat people without regard to race" is racism, yet obsessing over race like the anti-racism crowd does is not racist, even though it very much is. As we have seen with research on diversity training, focusing on race does not mitigate racism, but often reinforces and strengthens it. That makes sense considering that your thoughts shape your reality, or in this case, focusing on race is only going to make you live in a race-obsessed world in which almost everything is racist. If you think the previous sentence was hyperbolic, you can read my piece from last May. It goes over why disparity does not automatically mean racism, but it covers a list of things individuals on the woke Left have called racist, including exercise, homework, white babies, cycling, politeness, and logic.   

Anti-racism activist Ibram X. Kendi believes that the only solution to racial discrimination is more discrimination, which implies that much of the woke Left is more interested in perpetuating racism than it is mitigating it. As Dennis Prager brings up, "the Left's insistence that color is important is one of the most racist and anti-human doctrines of our time. It was precisely when America was most racist that people's color was deemed most important. Why would we want to return to that time?" Why, indeed?

Let's jump back to the recent Supreme Court affirmative action case. If there were such a strong correlation between race and socioeconomic status, the political Left would not have gotten so upset over the recent affirmative action ruling from the Supreme Court. Why? Because college admissions offices could have simply used socioeconomic status and be done with it. Speaking for someone who conducts education policy work as part of his job, I can tell you that the correlation isn't so strong. Deep down, the political Left knows it. It is why the affirmative action ruling was upsetting: because admissions offices cannot de jure perpetuate race and identity politics in the college admissions process. The cynic in me would argue that such a perpetuation serves to keep the woke Left in power to make sure they control the cultural narrative and foment a racial divisiveness in this country. 

I do not want to live in that society in which people are divided by race, religion, sexual orientation, or other factors. A goal in my interpersonal relations is that race does not play a factor on whether I spend time with that person. Above all else, I view them as human beings with their own experiences rather than part of a collective. 

That colorblindness plays a role in my personal life and I would like for it to play a role in greater society. We might not live in a meritocracy and we might not ever reach a strictly perfect meritocracy. Nevertheless, I believe that striving for meritocracy and a colorblind society is how we get over obsessing over race. I pointed out the importance of meritocracy after the recent Supreme Court affirmative action case. However, to end today's entry, I will quote former Manhattan Institute fellow Coleman Hughes, who happens to be black:

"Color-blindness is the best principle with which to govern a multiracial democracy. It is the best way to lower the temperature of racial conflict in the long run. It is the best way to fight the kind of racism that really matters. And it is the best way to orient your own attitude toward this nefarious concept we call race. We abandon color-blindness at our own peril."

Yes, Judaism Has a Blessing for Going to the Bathroom: The Significance of the Asher Yatzar Blessing

"When you gotta go, you gotta go." Having to go to the bathroom is an essential function of the human condition. Such a seemingly mundane function makes me think of a scene in the musical Fiddler on the Roof. In the musical, there is a scene someone asks the rabbi if there's a blessing for the tzar. The rabbi said, "Of course. May G-d bless and keep the tzar far away from us." There is a blessing for everything, and going to the bathroom is no exception. Judaism has that one covered in the form of the Asher Yatzar blessing. You can read the Hebrew here, but the English is below:

Blessed are You, Hashem, our G-d, King of the Universe, who formed man with wisdom and created within him many openings and many hollow spaces. It is obvious and known before Your Seat of Honor that if even one of them would be opened, or if even one of them would be sealed, it would be impossible to survive and to stand before You even for one hour. Blessed are You who heals all flesh and acts wondrously.

This blessing has its origins in the Talmud (Berachot, 60b) and it is one for the books. This is not a blessing that Jews are supposed to say once a day or in a blue moon. It is said after every time one goes to the bathroom, even if it is a single drop of urine (Shulchan Aruch, Orach Chayim, 8:4). 

On the one hand, we are to show respect for our bodies and be thankful for when our body is working. It is a vessel capable of fighting off viruses and bacteria, removing dead cells, and working around the clock to do its utmost to keep alive. I know that before I was religious, I would only notice my body functioning well after I recovered from an illness. I think part of why this is said on a regular basis is to make sure we do not take our bodies for granted.

On the other hand, the blessing recognizes what happens if the body does not work (Shulchan Aruch, Orach Chayim, 6): it would not be possible to survive. At the beginning of the blessing, it mentions G-d's wisdom in this human creation. Why would he create a being that is prone to malfunctioning or dying if something goes awry? Where is the wisdom in that?

Maybe it precisely because we are not angels, robots, or machines. Maybe because this balance between gratitude for our bodies when they do work and recognizing our body's limitations is what we need if we are to understand what it means to be mortal. Asher Yatzar is a chance to reflect on what works in our lives, the fragility of life, and the role that G-d plays in the universe. It is an opportunity to be mindful of our bodies, as well as show empathy for those whose bodies are not working so well. As the Velveteen Rabbi points out, Asher Yatzar "becomes an opportunity to think about the interior and exterior on personal, spiritual, and communal levels." It reminds us that our physical wellbeing is a spiritual act and that no act is too small for elevating it with a spiritual purpose, even going to the bathroom.

Bradley Cooper's Prosthetic Nose In Bernstein Biopic Isn't Anti-Semitic: This Debate Distracts Us from Real Anti-Semitism

Leonard Bernstein was an American conductor, composer, pianist, humanitarian, and author that brought us musicals as West Side Story, Candide, and On the Town. His influence in the world of music was great enough that Netflix decided to produce a biopic called "Maestro." The producers hired renowned actor Bradley Cooper to play the role of Leonard Bernstein. Between his activism and sexual relations with men while being married to a woman, it makes for an interesting story. In order to play Bernstein, Cooper made the artistic choice of depicting Bernstein while using a prosthetic nose that is larger than Cooper’s actual nose (see comparison below). 

Much like so many other topics in our polarized world, this caused a wave of controversy. This sort of debate is unsurprising in the Jewish world because of "three Jews, five opinions." Being Jewish, I can at least understand why it would cause controversy in the first place. The depiction of Jews having large noses dates back to the Middle Ages. Back then, Christian artists wanted to depict Jews as demonic and animalistic, which include a large, animal-like nose. The Nazis portrayed Jews with having grotesque, exaggerated noses. 

I know it the idea of a "Jew nose" is ridiculous because I converted to Judaism and my nose looks nothing like "the Jew nose." Plus, anyone who has met Jews of color, Mizrahi Jews, Sephardic Jews, or other Jewish converts know that the idea of a "Jewish nose" is bunk. Even most Askhenazi Jews do not have “the Jew nose.” It does not matter that the Jewish nose is more myth than anything else. Nevertheless, portraying Jews with the "Jew nose" is commonplace in the Muslim world when they want to paint Israel in a negative light. It is also used in certain extremist groups on the Far Right. 

In spite of the negative stereotype not based in reality, I do not have an issue with Cooper using the prosthetic nose. Let's start with the fact that Bernstein's own children defended the decision. In their statement, his children said "It happens that to be true that Leonard Bernstein had a nice, big nose." Yes, Jews are not any more likely to have large, grotesque noses than non-Jews. However, that was not the case for Bernstein. 

We can get into a debate of the proportionality of Cooper's prosthetic relative to Bernstein's actual nose. Anyone who has seen movies knows that Hollywood has a tendency to embellish. Even if you are to argue that Cooper's prosthetic is slightly larger than Bernstein's, Cooper's prosthetic does not have any resemblance with the deformed caricatures that were used in the Middle Ages or used by Nazi propagandists (see below). 

Then there is the matter of intent. Cooper did not come into this role thinking of what he could do to paint Jews in a bad light. His goal was to depict Leonard Bernstein to the best of his ability. To reiterate, Leonard Bernstein had a large nose, which his own children admit. Cooper's choice to use the prosthetic nose he used was not out of malice towards Jews, but an artistic choice used. You can love or hate the choice of whether he used a prosthetic or if it was a wee bit too big, but Cooper didn't do it to stick it to the Jewish people. 

8-23-2023 Addendum: Cooper is hardly the only actor who has used a prosthetic nose to better depict a character. There has been Meryl Streep, Anthony Hopkins, Robert DiNero, Steve Carrell, and Jared Leto. 

Whether Cooper is playing "Jewface" (when a non-Jew plays the role of a Jew) tangentially brought up the debate of whether a character from a minority group should be portrayed by an actor or actress from that minority group. Personally, I don't care if a non-Jew plays the role of Leonard Bernstein. Good acting is about being able to suspend audience members' reality and take them to a time and place that is not our own. If Cooper can pull that off with Bernstein, it doesn't matter that he's not Jewish. I also understand that does not matter in a world of identity politics. Just ask Scarlett Johansson when she auditioned for the role to play a FTM transgender individual. 

This obsession over identity politics does not only corrupt the art of acting. It misses the forests for the trees because it does elucidate us upon the dangers that face Jews. You would think that anti-Semitism would have died with Hitler after he carried out his morally egregious "Final Solution" and killed six million Jews. Sadly, anti-Semitism is still with us and is on the rise. It is not something that is solely on the Far Right, but has made its home in the Far Left with the so-called "progressives." The sad truth is that anti-Semitism is becoming en vogue once more and more ubiquitous in nature.

For those who are concerned about rising anti-Semitism, there are plenty of action steps that can be done. Engage with people who are Jewish, particularly if you are not Jewish. Learn more about anti-Semitism, Jewish people, and the Jewish religion. Speak out against anti-Semitic jokes or people who use anti-Semitic tropes. Donate money to organizations that fight anti-Semitism. But obsessing over an actor's artistic choice that is not based in Jew-hatred? That is not one of them.

Net Zero Is a Pie in the Sky Solution That Is Far From Being Zero-Cost

Fighting climate change has been all the rage, especially from activists and politicians on the Left. According to this narrative, an increase in greenhouse gas (GHG) emissions is causing a surge of natural phenomenon that threaten our way of life. If we do not do something fast to lower GHG emissions, our planet will either be destroyed or severely damaged. We need to act fast or else, say the climate change activists. 

That is where the Net Zero debate comes in. Net Zero refers to a balance between the amount of GHG emissions that are produced and the amount that are removed from the atmosphere. It is a goalpost to make sure that we do not go above 1.5°C above pre-industrial levels. This 1.5°C threshold is what many climate scientists believe is acceptable before crossing to a "point of no return" in terms of there being catastrophic and irreversible events. 

My questioning of the premise goes beyond my generally skeptical and inquisitive behavior. It certainly would not be the first time the environmental movement has cried wolf. The media has exaggerated climate change's effect on such phenomena as hurricanes or heat waves to peddle climate change sensationalism. As a matter of fact, I have enough skepticism of the apocalyptic view where I would state that climate change is not a crisis because the worst-case scenarios are based on low-probability climate modeling that makes unrealistic assumptions. This is why I view climate change as a manageable phenomenon to which we can adapt. For argument's sake, let's assume that climate change is a threat to all of mankind and that we need to cut emissions like mad if we want to survive. 

What would it actually take to reach Net Zero? Last week, the Institute for Energy Research (IER) released a study entitled The Challenges and Costs of Net-Zero and the Future of Energy answering that question. Here are some actions that would need to take place in a U.S. context (p. 16-17):

• Eliminate coal usage by 2030. While coal consumption has been decreasing since 2007, coal still accounts for 19.5 percent of U.S. energy consumption. This ignores an elephant in the room. China is the world's largest consumer and producer of coal. Even the Left-leaning New York Times admits that this is a challenge to climate change goals. 
• Renewable energy supply 100 percent in primary energy by 2050. In 1991, fossil fuels made up 85.6 percent of U.S. energy consumption. In 2021, that figure went down to 78.7 percent. While renewables grew by 5.6 quadrillion BTUs between 1990 and 2022, fossil fuels grew by an even higher 6.8 quadrillion BTUs. To replace the increase in fossil fuel consumption, renewable energy consumption would have to increase by sixfold over the next thirty years. That would include wind and solar needing to increase by fourteen-fold. Given the land use required for solar and wind, it presents considerable challenges (more on that in a moment). 
• Between 210 and 330 million light-duty electric vehicles (EV) by 2050. Last April, I criticized Biden's emissions standards that encouraged EVs too quickly. As of 2022, less than one percent of all vehicles are EVs. According to a report from Princeton University, anywhere between 6 and 17 percent of the vehicle stock would need to be EVs by 2030. To do that, the U.S. would need to triple its EV production to reach the lower end of that range. Seeing how EV manufacturers are struggling to produce enough EVs without going bankrupt, this seems too lofty of a goal. 
• 2-5 times more electricity infrastructure. To reach this goal, you would need 1.3-5.9TW of wind and solar to do it. To reach the low-bound 1.3TW, wind and solar farms would need to take up 260,000 square kilometers. To put that into perspective, that is larger than the size of Oregon, Wyoming, Michigan, or New England (IER, p. 21-22). 
• Going back to my EV emissions critique from last April, the United States already has a strained electric grid system. It would be a huge amount of change. You expect that we can quintuple the grid size by 2050?

This only gets into the scenarios needed for it to work. We would also need to increase the mining of lithium, graphite, cobalt, nickel and rare earth metals (IER, p. 35). If by some miracle we could make it halfway to Net Zero, it would still cost a decline in GDP of $7.7 trillion, 1.2 million jobs, an increase of household electric bills to $840 [in 2017 dollars], and gasoline prices increasing 236 percent (IER, p. 5). 

If you are looking for additional reading on Net Zero scenarios, the Energy Policy Research Foundation published a report in June 2023 showing how ridiculous and rosy the assumptions the International Energy Agency made in its Net Zero projections.

Net zero is as delusional as zero-COVID or the quixotic dream of chasing windmills. The truth is that fossil fuels still have a major role in energy portfolios. I believe that we should move to greener energy. The problem is that much of the environmentalist movement is anti-nuclear. Without nuclear power as a major part of the energy portfolio, we have de facto shut down the only viable path towards Net Zero that can meet energy demands. 

It sounds like an environmentalist wet dream to envision a world without fossil fuels. Doing so without nuclear at the forefront would be like holding a coal in your hand and expecting it to burn someone else. As long as the anti-nuclear crowd is driving the green agenda, activists and politicians will go after everything, whether it is our cars, stoves, or water heaters. We need to keep our guard up and remain skeptical of such environmental ploys, especially if the environmental movement continues to make such radical proposals under such tenuous assumptions. 

British Study Shows Another Cost of Lockdowns: Declining Social-Emotional Skills

Most people have been vaccinated from COVID and the U.S. government ended its COVID emergency powers back in May. Yet we are still reeling from the pandemic. I am not simply talking about how the pandemic affected mental health of millions. I am talking about the effects of the needless COVID restrictions, especially the lockdowns. I knew the lockdowns were a bad idea from the start. It turns out that lockdowns could not pass the muster of a basic cost-benefit analysis because the costs considerably exceeded any derived benefit. 

The evidence for how lockdowns ruined millions of lives continues to ramp up. Earlier this month, the British think tank Institute for Fiscal Studies released a study with a long title: How did parents' experience in the labour market shape children's social and emotional development during the pandemic? The premise of this study is to determine the effects that parents' stability (or lack thereof) in the labor market affected the social-emotional skills of their children. It was not good, to say the least: 

"Overall, the socio-emotional skills of children whose parents had stable labour market experiences throughout the pandemic - whether employed or unemployed the whole time - held up better on average than the skills of children whose families faced more economic instability. This suggests that it was the stability of parents' labour market experiences, rather than being in any particular economic state, that was an important determinant of children's socio-emotional development during the pandemic (p. 3)."

48 percent of children's social-emotional skills being worse off a year into the pandemic, as opposed to the sixth who had fewer challenged (ibid.). Or to translate that finding, "for every child that had fewer challenges during the lockdowns and school closures, three children ended up faring worse." After accounting for pre-pandemic skills, IFS found that "children whose families experienced at least one change saw, on average, their socio-emotional development worsen by about 9% of a standard deviation more than those whose families remained consistently employed or unemployed throughout."

This not only means a reduction in actual and future earnings for the parents: "The intergenerational impacts of economic uncertainty on child socio-emotional development are likely to operate through an increase in parental stress and possibly through a decrease in actual and expected expenditures on children (p. 25)." This also has the potential to stymie "better outcomes in later education, crime and health, and higher employment and higher wages in life (p. 23)." These findings are similar to the ones in a study co-authored by researchers at Cambridge University and Addis Ababa University about the social-emotional learning of Ethiopian students (Bayley et al., 2023).

A pet peeve of mine is when people like to blame all this fallout on the pandemic. The only direct costs of SARS-CoV-2, the virus that causes COVID-19, are COVID-related illness, COVID-related morbidity, and COVID-related death. There are some other indirect costs related to health, such as crowded hospitals and burnt out medical staff throughout. As for everything else, that was not on the virus. The virus did not decide to close business or schools down. That was brought to you by the politicians who enacted short-sighted, myopic, and harmful regulations such as the lockdowns. 

For some, blaming it on the pandemic is preferable to reminding us of the reality that the lockdowns were ineffective and came with considerable costs. At least IFS was intellectually honest enough to call out the culprit to declining social-emotional skills of children: "the disruption to parents' experiences in the labour market created by lockdown restrictions (p. 2)." The virus did not tell workers in multiple industries to not come to work and stay home. That was by government fiat. If the government bothered with standard risk assessment, cost-benefit analysis, or simply plain 'ole foresight, it would have been clear as day that lockdowns would come with considerable costs. 

This was especially true for how lockdowns affected children. When I took the time in June 2022 to discuss the effects of COVID regulations on children, part of that analysis was showing how lockdowns exacerbated mental health issues and poverty for children across the world. Another part of that 2022 analysis was illustrating impeded educational attainment, which will eventually have negative impact on these future adults' lifetime earnings. Now we can add another cost to the list: declining social-emotional skills. 

The negative impact of lockdowns on this generation of children is undeniable, and what makes it worse is that it was avoidable. I truly feel sorry for the children who had to go through the COVID pandemic. Seeing their ability to socialize with others and process their emotions stifled is only going to have greater costs as they develop into adults. Government leaders across the world need to acknowledge and learn from the cost of onerous lockdowns so another generation of children does not go through permanent emotional damage. 

It Was a Hot July, But We Shouldn't Give Into Climate Change Hype on Heat Waves or "Global Boiling"

Last month was the hottest month that I can remember in recent memory. That is not simply anecdotal evidence on my end. The World Meteorological Association is positing that July 2023 is the hottest month on record. As we see below, global mean surface air temperature is above what it historically has been. If you read news from media outlets, we should not only be worried but downright terrified about how climate change is making extreme heat worse and very well bring the end of days. The Guardian opined that Phoenix's heat waves are testing the limits of survival. Washington Post said that this deadly heat are the alarm bells of a planet on a brink. The Atlantic asked how much longer the Southwest will be habitable. The Left-leaning Center for American Progress released a report on the health care costs of extreme heat. 

Since we are in an age of global warming, it makes sense that it is going to be warmer than it was in the Little Ice Age (16-19 c.). It seems tautological, to say the least. But it is more than the planet getting warmer. It is about whether more extreme heat is wreaking more havoc on the world. Last year after Hurricane Ian, I scrutinized the media hysteria on hurricanes as it pertained to climate change. It turns out that the media was ignoring that number, frequency, and intensity of hurricanes did not increase due to climate change. Furthermore, it turns out that hurricanes have not caused more economic damage when using normalized cost trends. I would like to know if the media is exaggerating the effects of heat waves in the same way they have with hurricanes or if this time is different. 

First of all, saying that this is the "hottest year on record" does not mean much when experts only have been collecting surface temperature data since the late nineteenth century (see NASA data below). There are literally centuries for which we do not have such detailed data. Nevertheless, let us use what data we do have. For context, they started collecting these data at the tail-end of the Little Ice Age. What we see with these NASA data are that the planet has warmed up by about 1° Celsius over the past 140 years. We started collecting these data at a cold period and entered a period in which the global temperatures have gradually increased over time. 

Scientists have gathered surface temperature data since the late 19th century and satellites have only gathered data since the late 1970s. Aside from surface temperature data and satellite data, we only have proxy measures that a 2006 study from the National Academies of Science called "low resolution." Let's take a look at one of these proxy measures: benthic carbon and oxygen isotopes from up to 66 million years (Westerhold et al., 2020). What we see below is that in prehistoric times, the Earth's global temperature was up to 12° Celsius warmer for millions of years. In spite of those warmer temperatures, the planet survived. One can infer from this proxy measure that we could withstand a bit more heat (more on that later). 

There is a factor in play with what we have since the 1880s: temperature readings are disproportionately taken in urban areas (Zhang et al., 2021). This is important since, as the European Commission points out, cities are often 10-15° Celsius warmer than the surrounding rural areas in no small part due to the urban heat island effect. As urban centers developed in the 20th century, so has the urban heat island effect. We need to keep this upward measurement bias in mind when discussing the modern temperature data we do have.

For what we do have on record prior to this year, the worst years include 2015, 2016, 2019, 2020, and 2021. In 2003, Europe had a nasty heat wave (Lhotka and Kysely, 2022). This still was not as bad as the Drought of 1540, not to mention other nasty droughts between the 11th and 15th centuries (Cook et al., 2015). This illustrates how extreme weather situations existed in pre-modern times, which is to say that hot summer days do not automatically mean climate change. 

As for the United States, we have data to show that the worst heat waves have not taken place this decade. Data from the Environmental Protection Agency (EPA) shows that the worst heat waves in known history comes from the Dust Bowl era in the 1930s, not this century. 

One more interesting chart on U.S. data, this one showing the number of warm spells. This chart below comes from the government's Climate Science Special Report. In Chapter 6 of the report, we see that the length of warm spells has decreased since the Dust Bowl era and started to pick up again in 1970s. The figure plateaued in the 21st century. 

This same government report shows another peculiar trend. If we are to compare the highest temperatures between 1986 and 2016 versus that between 1901 and 1960, what we see is that the highs were warmer in the first part of the 20th century. If the massive increase in greenhouse gas emissions are supposed to cause greater temperatures, why are we seeing most parts of the United States have lower highs than in previous years?

An important question to ask is what sort of impact heat waves have. One is that of droughts because heat waves can exacerbate drought, which has impact on agriculture and general water availability. I went to the Intergovernmental Panel on Climate Change (IPCC) report to answer this question. I did see multiple regions dealing with a low level of increased drought (IPCC, p. 10). What I did not see is a high level of drought that would correspond with the media sensationalism. 

 

What about people dying from extreme heat?  The Lancet published a study covering 854 European cities between 2000 and 2019 (Masselot et al, 2023). The study found that extreme cold was way more likely to kill than extreme heat (more than ten times likely), as we see from the study's chart below. Take a look at the x-axis of the chart. 

What is the difference? The scaling for extreme cold deaths is not the same as that for extreme heat. The scaling is about 1:6, which is to say that the authors of the study exaggerated the excess death rate by about sixfold to make their point. If you make the scaling equal by using a 1:1 scale, you see an even more obvious picture, which is that extreme cold is way worse than extreme heat. Based on figures in the Lancet study, Bjorn Lomborg was able to extrapolate that rising temperatures are able to save over 150,000 lives a year. The truth is that the largest source of temperature-related mortality is the extreme cold, not extreme heat.

And if that were not enough, there was decline of around 50 percent in global heat wave deaths between 1980 and 2016 (Formetta and Feyen, 2019, see below). Not only are the fatalities much smaller than extreme cold deaths, but heat-related fatality rates have been on the decline. Another study showing heat mortality data for the United States shows a similar decline in heat-related mortality (Sheridan et al., 2021).

This is not to say that there is no cost to warmer summers. What we do see in the data is that the concern is nowhere near where it needs to be to justify panic. That is because climate change is not an apocalyptic disaster. We have seen environmentalists use fear and alarmism multiple times where the event did not pan out, whether that was it deforestation, acid rain, the death of the Great Barrier Reef, a nuclear winter, or Rachel Carson's The Silent Spring. If people stopped using worst-case, low-probability models to justify the fears, we would not be in such a panic. Climate change is a manageable problem. How do we manage it? Adaptation is our best bet because it has already worked. 

As already illustrated, weather-related deaths have decreased about 96 percent in the past century, even with population growth. Instead participating in a secular form of self-flagellation, we should embrace the technology we have to make our lives better. We can do more to mitigate the effects of warmer summers with air conditioning, fresh drinking water, swimming pools, and electric fans. We could fight the heat waves by asking for subsidies on air conditioners, painting streets white to reflect the sunlight, or working towards cheaper energy (especially nuclear power). These are superior policy options compared to dealing with climate change by forcing electric vehicles on the American people, gas stove bans, implementing cap-and-trade, or using really strict water heater energy efficiency standards. Do-good policy beats feel-good policy and looking at the data for what they are beats the sensationalism around so-called "global boiling." 

U.S. Credit Downgrade by Fitch's a Reminder of Deteriorating Fiscal State of Affairs

The COVID pandemic turned the global economy upside-down. As resilient as the U.S. economy was going into the pandemic, that does not mean the U.S. economy remained immune. Most states in the Union decided to lock down the economy in response to COVID, which cost the U.S. economy a whopping $9.2 trillion. Supply chains were thrown out of whack enough to create a supply chain crisis. If that were not enough, a combination of the Federal Reserve pumping trillions of dollars into the economy along with the government spending trillions on so-called "pandemic relief" caused the inflation spike we see to this day. This debt ceiling debacle earlier this year exposed how out of control the U.S. debt situation is getting.   

It seems that people have been noticing this dysfunction, including credit rating agencies. That would explain Fitch's downgrade of the U.S. government's formerly stellar credit rating of "AAA" to "AA+." This is the second downgrade from one of the major three credit rating agencies since the practice of credit ratings really took off in the early 20th century. The first downgrade was by Standard and Poor's in 2011. Why did Fitch's decide to downgrade now? According to its rating action commentary, Fitch's had the following to say:

"The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to 'AA' and 'AAA' rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions."

The good news is that Fitch's overall outlook is stable. That might have to with a well-diversified and high-income economy, dynamic business environment, and the fact that the U.S. dollar is still the predominant reserve currency. This means that for the time being, the United States still remains an overall trustworthy economic powerhouse. At the same time, there are legitimate concerns. In the short-term, the Federal Reserve is not finished with raising interest rates. This plays into why Fitch's is anticipating a mild recession later this winter.  

Fitch's bring up how the debt-related political standoffs and last-minute resolutions have eroded trust in the U.S. Congress of doing its job to ensure as basic of a function as fiscal management. This is not about mere discontent of how the U.S. government approaches the debt ceiling. It is about the bigger picture. There is no medium-term plan to deal with the country's fiscal challenges. As I have brought up more than once, the debt-to-GDP ratio is rising by government deficits and shows no indication of falling. We have doubled our debt in the past decade, which is a good way to corrode trust in future lenders. The national debt is projected to be double the size of the U.S. economy in thirty years, which does not inspire confidence. Not addressing these failings will have negative impact on U.S. economic growth, which will affect the lives of everyday U.S. citizens.

This downgrade in the credit rating may be temporary or the United States will be in a lot of hurt in the long-run. If the government wants to get a handle on its fiscal state, it would find real reforms for the three main drivers of U.S. public debt: Social Security, Medicare, and Medicaid. What I do know is that if the United States wishes to be the economic powerhouse it has been since the mid-20th century, it needs to get in touch with the tradition of fiscal discipline and fast. Otherwise, the likely path will be more credit downgrades and the United States economy ending up like that of Argentina or Greece.

Biden's Water Heater Energy Efficiency Standards Would Put American Homeowners in Troubled Waters

The Biden administration has been on a crusade against climate change. Its weapon of choice has been regulations. The Inflation Reduction Act (IRA) included electric vehicle provisions and clean energy tax credits, neither of which will do anything significant to reduce global temperatures. Earlier this year, one of Biden's Consumer Product Safety Commission commissioners suggested the ludicrous idea of a gas stove ban. In April, Biden proposed electronic vehicle (EV) emission standards so strict that they illustrate the flaws of advocating so much for EVs. 

Now we have Biden's Department of Energy (DOE) proposing energy efficiency standards on consumer water heaters. If successful, these regulations will compel "that most common-sized electric water heaters to achieve efficiency gains with heat pump technology and gas-fired instantaneous water heaters to achieve efficiency gains through condensing technology." The latter regulation is designed to push more people towards electrification. The Biden administration's DOE calculated that the regulations would save consumers $11.4 billion per annum. It makes it seem like a win for fighting climate change. Here are some issues I take with that assertion.

I am going to forget the fact that these sorts of rosy projections tend to overstate benefits while understating costs. Industry data show that the average installation cost for a heat pump versus an electric water heater is up to $2,800 more expensive. How long it takes for the consumer to recoup savings depends on climate, house size, and number of occupants. Based on DOE estimates, it can take anywhere between a few months and eight years to break even. 

Even if someone experiences a modest savings of $20/month, odds are most households would rather not pay extra money upfront for the more expensive unit. 57 percent of Americans do not have enough to cover a $1,000 emergency. Especially with the monetary and fiscal policy that brought this inflation, what makes you think most households have an extra $2,800 laying around to pay for a water heater that complies with these DOE standards? This does not get at the fact that the same industry data show that a gas water heater is cheaper in the long-run than an electric water heater. 

I have other reasons to think prices will go up as a result of these proposed regulations. The leading water heater manufacturer, Rinnai Corporation, stated that the proposed standards are not feasible for its noncondensing line and that they will "force consumers to choose less efficient water heating solutions such as tank style water heaters." That means supply of water heaters will be constricted, which will drive up prices. Rinnai President Frank Windsor also warned that in addition to higher energy bills, there will be shorter appliance lifespans. This means higher repair costs, as well as that the DOE's projections are based on rosier assumptions about longer appliance lifespan. 

The Right-leaning National Review illustrations functional considerations for a water heater: "The heat-pump water heaters are a compelling choice for those living in hot climates, but for those living in places that get colder, it isn't as great of an option. The unit essentially functions as an air conditioner because after it suck in hot air from the room, it then blows out cold air." The article points out another issue: "The heat-pump water heaters require seven feet of clearance, which means they are not a good option for people who have water heaters in rooms with low ceiling or underneath staircases." In other words, a heat-pump water heater is not an optimal choice for all households. People should have the right to purchase whichever water heater best fits their circumstances. 

I am already skeptical about the monetary benefits for the climate since most of our energy still comes from fossil fuels. Only with an electric grid with predominantly renewable energy could this possibly work, and we are still a long ways from that objective. But let's get at a more essential question: What about the carbon emissions reduction these standards are supposed to bring? 

The DOE calculates that it will reduce carbon emissions by 501 million metric tons (p. 15). 501 million sounds like a large number, but that number needs to be put into greater context. I asked a similar question with the IRA last year: How much will this policy actually reduce global temperatures? After all, the rationale for these efficiency standards is that reducing global temperatures will mitigate the effects of climate change. If it does not reduce global temperatures significantly (certainly at the 1.5 degrees Celsius threshold that has people worried), then we should seriously question why the DOE is implementing these regulations in the first place.

Per the Right-leaning Heritage Foundation, even if the United States eliminated all fuel-based carbon emissions, it would only reduce global temperatures by 0.2 degrees Celsius. If that is how little eliminating all carbon emissions helps, imaging how insignificantly tiny and minute these water heater efficiency standards are going to make a difference. It is basically next to nil. Plus, as I brought up in April, climate change is not the crisis the alarmists make it out to be. 

Why is the DOE going out of its way to burden the American people with these regulations? It surely is not because these efficiency energy standards help with climate change, which makes the DOE's motives here more suspect. Using the excuse of "it's to fight climate change" is giving the Biden administration the carte blanche to regulate anything with an electric plug or that fires up around the house. Any home owner that wants to go all-electric can do so at any time. There is no need for government fiat, especially since these regulations will do nothing of actual significance to lower carbon emissions. As such, the Biden administration should back off its war on home appliances and rescind its proposed rules. That way, we can get back to some actual common-sense environmental policy instead of feel-good environmental policy.