The editors of the Wall Street Journal report on an interesting development in Wellesley, Massachusetts:

Last year the nonprofit Parents Defending Education sued in federal court on behalf of three Massachusetts families over Wellesley policies and practices that they said violated the First Amendment, the Fourteenth Amendment and civil-rights law. The settlement looks like a solid win for the parents.

Wellesley’s “affinity groups” had held events aimed at specific races. School officials claimed no students or staff were excluded, but the families argued that isn’t what their children were told. The complaint quoted an email where a middle-school teacher said a specific “healing space” was “for our Asian/Asian-American and Students of Color, *not* for students who identify only as White.”

Under the settlement, Wellesley agreed not to “exclude students from affinity-based group sessions or any other school-sponsored activities on the basis of race.” The district won’t identify events “as intended only for certain racial groups.” It “will provide notice” of affinity-based group sessions “to all grade-eligible students, regardless of their race.” Announcements will feature a disclaimer saying that “this event is open to all students regardless of race, color, sex, gender identity, religion, national origin, or sexual orientation.”

The parents also challenged Wellesley’s policies regarding so-called bias incidents, which they argued were “overbroad” and could apply to “virtually any opinion or political belief.” The settlement says Wellesley has “rescinded and will not reinstate” its original bias-reporting procedures.

It’s not as though the parents of Wellesley are MAGA hat-wearing Trump supporters—Wellesley went 77.8% to Biden in the 2020 election. My point is that the political divide isn’t just Democrats vs. Republicans. It’s also radically progressive Democrats against the rest of the party.

Rana Foroohar argues that the U. S. needs a new trade policy in her column at Financial Times. She distinguishes between two “teams” within U. S. foreign policy circles:

The first, Team Status Quo, is heavy on state department and commerce types. They want to believe that we can somehow travel back to the 1990s, a time of wilful blindness about a “one world, two systems” model in which China and liberal democracies would co-operate to their mutual benefit despite maintaining fundamentally different political and economic systems.

The second, Team New Rules, includes Katherine Tai, the US trade representative, as well as other administration officials interested in labour, climate and long-term security issues. They have a more realistic approach, grasping that even if the US wanted to go back to a neoliberal trade approach that prioritised market access for big companies over better wages, the ability to make crucial products or the protection of the planet, China is going in another direction.

What is that direction?

Beijing’s so-called dual circulation plan is a decisive step away from World Trade Organization rules and multilateral agreements orchestrated by technocrats from the US and Europe. It prioritises self-reliance, indigenous innovation and the use of all strategic resources to shape a world where the US no longer calls most of the shots. That means settling more trade deals in renminbi, the better to reduce the financial leverage that the dollar gives the US. It also involves weaponising supply chains — various legislative loopholes in the US still allow states and companies to source supplies such as personal protective equipment from China.

Sadly, she does not venture an opinion on what that change should be. I infer that she leans towards “Team New Rules”, particularly from her observation that Team Status Quo is obsolete. My own preference with respect to China would be one of reciprocity. To whatever extent China imposes quotas or other resrictions on U. S. goods or services, we should impose quotas or other restrictions on Chinese goods or services. To the extent that China provides preference and support to its own companies, we should provide preferences and subsidies to our own. And so on. That, of course, would be enough to make the heads of Team Status Quo spin and cause them to spit pea soup.

At Project Syndicate in providing his view of present inflation, Joseph Stiglitz largely echoes Alan Blinder’s views to which I linked earlier. Much of the piece consists of apologetics for the policy response that has taken place over the two years. These are good points:

The pandemic did expose a lack of economic resilience. “Just-in-time” inventory systems work well as long as there is no systemic problem. But if A is needed to produce B, and B is needed to produce C, and so on, it is easy to see how even a small disruption can have outsize consequences.

Similarly, a market economy tends not to adapt so well to big changes like a near-complete shutdown followed by a restart.

but, sadly, he does not provide any guidance on either subject. It takes him a while to get around to his “balanced response”:

A large across-the-board increase in interest rates is a cure worse than the disease. We should not attack a supply-side problem by lowering demand and increasing unemployment. That might dampen inflation if it is taken far enough, but it will also ruin people’s lives.

What we need instead are targeted structural and fiscal policies aimed at unblocking supply bottlenecks and helping people confront today’s realities. For example, food stamps for the needy should be indexed to the price of food, and energy (fuel) subsidies to the price of energy. Beyond that, a one-time “inflation adjustment” tax cut for lower- and middle-income households would help them through the post-pandemic transition. It could be financed by taxing the monopoly rents of the oil, technology, pharmaceutical, and other corporate giants that made a killing from the crisis.

I gather that he continues to belong to “Team Transitory”.

I suspect that Geoff Shullenberger’s post at UnHerd will raise some hackles. Its title, “Were masks a waste of time?”, seems intended to produce that reaction but the post is actually a bit different. There are actually three distinct questions:

• Has the health system guidance on wearing masks been unambiguous and effective?
• Do masks work?
• Do mask mandates work

and much of his article is devoted to the first and last questions. For example, this observation:

A document published by the World Health Organisation in 2019 framed the results of these studies in no uncertain terms: “there was no evidence that face masks are effective in reducing transmission of laboratory-confirmed influenza”. It’s unsurprising, then, that when the CDC briefed reporters on the pandemic in February of 2020, masking was not even mentioned among the NPIs that might be deployed. The UK government, too, stated early in 2020 that there was no evidence to support masking.

doesn’t actually tell us whether masks (or what sort of masks) work or not. It tells us that the guidance we’ve been receiving from healthcare professionals has been confusing which I should think we should all be able to agree. And this statement:

In light of the earlier consensus, Miller’s findings in Unmasked should not be surprising. As we might have predicted based on a plethora of trials and meta-analyses published prior to the pandemic, mask mandates have had little to no demonstrable impact on curbing the spread of the virus. Miller reaches this conclusion by comparing areas with mask mandates of longer and shorter duration with each other and with areas that never imposed mandates at all. The results, he shows, simply do not support the standard adage that “masks save lives”.

For example, Los Angeles County, the most populous county in the US, imposed one of the earliest mask mandates in the United States, just after the CDC released its new guidance in early April 2020. By May, the county was requiring masks outdoors as well as indoors and enjoying 96-97% compliance. (It also imposed an array of other strict mitigation measures.) But it had case and mortality rates well above the national average throughout 2020 and 2021. LA currently ranks 3rd among California counties in its Covid death rate, faring worse than numerous counties with mask mandates of shorter duration and lower levels of compliance.

doesn’t tell us whether masks (or what sort of masks) work or not. It’s not even dispositive that mask mandates do not work although it does call them into question.

Bearing in mind the economist Paul Samuelson’s jibe (“When the facts change I change my opinion—what do you do?”), my view is that there is some marginal benefit in a non-healthcare setting in preventing me from spreading COVID-19 to others by wearing a mask, with the greatest increment in effect being simply by wearing a cloth mask with surgical and then N95/KN95 masks providing additional marginal benefits. By far the best way to encourage people to use masks is for the relevant authorities to provide unambiguous guidance and systematic utilization of them themselves. I think that unenforced and in all likelihood unenforceable mask mandates are, indeed, a waste of time, at least in the U. S. If wearing them is seen as providing benefits, people will do it without mandates but there won’t be 100% compliance. In the U. S. it’s darned hard to get overwhelming compliance with anything.

In a piece in the New York Times Ezra Klein laments the U. S.’s response to COVID-19:

We began this pandemic by asking the wrong questions, and thus we got the wrong answers. Rewind to October 2019. The Johns Hopkins Center for Health Security and the Nuclear Threat Initiative release the Global Health Security Index. It ranks 195 countries on their pandemic preparedness. Each country is judged on prevention policy, on detection capabilities, on response infrastructure, on health system capacity, on international cooperation and on underlying risk. The news is reassuring, at least if you live in the United States: We’re No. 1!

Then, only months later, we get an actual, once-in-a-century pandemic. The United States fails the test. We have more infections, more deaths, more pain and suffering and division and grief. Our performance doesn’t just fall short of rich countries like Germany and Denmark. It falls short of far poorer countries, too. The Global Health Security Index was measuring the wrong things. The researchers later noted that tucked inside the report was a finding about the United States that would prove more predictive of our response: “It had the lowest possible score on public confidence in the government.”

I hope I’ve made it clear that I think that “policy”, at least as Ezra uses the term, has had relatively little to do the prevalence or virulence of COVID-19. I think other factors including genetics, climate, and obesity had considerably more effect.

Ezra closes with this:

Let’s flesh that out a bit with this:

Here are my suggestions for preparing for future pandemics which I strongly suspect will occur with increasing frequency and rapidity until we start thinking more clearly:

• Elected officials should stop lying to the people.
• Politicians should stop making promises they do not have the ability or even the intention of keeping.
• Elected officials should model in their own behavior the behaviors they expect to see in the people.
• Elected officials should not become wealthy in government service or shortly thereafter by selling their ability as facilitators with their erstwhile colleagues.
• Negative political advertising should be eschewed.
• We should stop preaching hatred of each other.
• We need to return to our traditional optimistic view of the United States and its future.
• We need to stop importing immigrants from countries in which trust is lower than it is here.

And, yes, I recognize that would mean an end to politics as we know it.

The editors of the Wall Street Journal chortle over the failure of the State of California’s proposed single payer plan for the state in the state’s legislature:

Democrats in the state Senate passed a bill in 2017 for a single-payer health system, but it died in the state Assembly because it didn’t include revenue to pay for the $400 billion annual cost. Last month Assembly progressives resurrected the legislation, plus an enormous tax bill to finance it.

This included a 2.3% excise tax on businesses with more than $2 million in annual gross receipts; a 1.25% payroll tax on employers with 50 or more workers; a 1% payroll tax on workers earning more than $49,900; and a progressive surtax to start at 0.5% on income over $149,509 and rising to 2.5% at $2,484,121.

These sweeping tax increases were too politically toxic even for Democrats who believe in confiscatory taxation as an article of faith. Gov. Gavin Newsom campaigned on single-payer but declined to endorse the bill. “It’s one thing to say, it’s another to do,” he said last month.

Lacking enough Democratic votes to pass the bill, progressives killed it. “I don’t believe it would have served the cause of getting single payer done by having the vote and having it go down in flames and further alienating members,” said San Jose Assemblyman Ash Kalra, the bill’s author.

They’ll try again later.

When will people recognize that practical single payer systems, higher taxes, reduced compensation for providers, and more limited consumer choice are inextricably intertwined? It remains true that there ain’t no such thing as a free lunch. Countries with high degrees of social cohesion than we have like Germany, France, Denmark, etc. and the reduced opportunism, cheating, and self-dealing that go along with that social cohesion can manage more expansive systems of social services than we can.

There’s a bit of a brouhaha here in Illinois about students wearing facemasks in schools. Jessica D’Onofrio reports at WGN News:

CHICAGO (WLS) — An Illinois judge’s ruling has forced many schools Monday to decide whether to continue with a mask mandate or to make them optional.

Some school districts plan to keep their mask rules in place, while others made them optional.

Last Friday, a judge in Sangamon County ruled against Governor JB Pritzker’s mask mandate inside school building, in response to lawsuits involving parents and teachers from more than 150 districts.

“Now is not the time from my perspective to be reducing our mitigation strategies,” said Tony Sanders, superintendent of Elgin School District U-46.

While Governor Pritzker has vowed to appeal, many districts are not waiting for the legal wrangling to be over. Chicago Public Schools said it will continue to require masks, as will U-46 in Elgin.

The state’s second largest school district will have an exemption for a handful of students whose parents were part of the lawsuit, but that’s it.

“Based on the wording of the temporary restraining order we believe we still have the authority to enforce mask wearing as part of our local mitigation efforts, and again, the local bargaining agreements that we have that compel us to provide a safe environment for our employees to work,” Superintendent Sanders said.

Many others have moved swiftly to lift the mask mandate. Some said they will continue to strongly encourage their use, others that these are decisions that should be made at home, like the Superintendent of Timothy Christian Schools in Elmhurst.

“We have wide spaces (and) large classrooms. We believe we can achieve this,” said Matt Davidson, superintendent for Timothy Christian Schools. “We’re seeing it in so many places, tens of thousands of schools across the country, have been mask optional all year long.”

My view is that while I don’t have a problem with the mandates as such I do not believe that Gov. Pritzker has the authority to issue them and he has been remiss in neither operating within the law nor seeking authorization from the legislature to do what he believes is necessary which he would certainly receive. It’s both what you do and how you do it that makes for authoritarian government.

I may start a classification for gossip. In this household we listen not only to Chicago local news and national news but to Los Angeles local news. You hear some interesting things on Los Angeles local news you don’t hear elsewhere.

In this case there’s a rumor that the excuse given for Jeffrey Zucker’s ouster from CNN, his relationship with a subordinate, is just a pretext. There a big merger under way and getting rid of Zucker made that easier and more likely.

In a Wall Street Journal op-ed Alan Blinder encourages the Federal Reserve Open Market Committee to be “gentle” in raising interest rates:

Before the January FOMC meeting, a loud minority of market chatter was screaming that the Fed was behind the curve and calling on the committee to spring a hawkish surprise on Jan. 26—such as either raising interest rates that day or calling an immediate end to quantitative easing. Mr. Powell and his colleagues, being far less excitable, demurred. But they did strike a more hawkish tone, making it clear that tighter money—or, more accurately, less-easy money—is coming.

It is. But Fed watchers should understand that after some modest tightening, the central bank will be looking at two-sided risk.

Yes, as the worry warts say, inflation today is far too high, and there is a risk that it will remain too high for too long. The hawks are also correct to point out that the Fed is behind the curve and needs to play catchup. Finally, they are correct to point out that Team Transitory’s inflation forecasts haven’t looked good so far. (Confession: I’m a member.) With inflation stubbornly high, we could be on the cusp of a serious rate-hiking cycle.

Maybe. But there are also risks on the other side.

Start with demand. First and foremost, Covid-19 is still with us. Fear of infection appears to have taken a big bite out of retail sales in December, and that may be continuing into 2022. Second, the massive fiscal support that helped to power spending in 2020 and 2021 has mostly disappeared. In fact, the fiscal throttle is shifting into reverse. Third, businesses won’t keep accumulating inventories at the stunningly high rates of the fourth quarter of 2021. All this adds up to slower demand growth in 2022 than in 2021.

Turning to the supply side, while Omicron is keeping a lot of workers either sick or quarantined because they’ve been exposed, it looks to be subsiding quickly. There are also hints in the data that supply chains are beginning to cope better with the surge in demand for things that come in boxes. There is even a hint in recent data that consumer spending patterns are shifting back toward services, which don’t come in boxes.

Finally, let me add the “risk” that Team Transitory turns out to be right, and inflation tumbles faster than the hawks expect. The Fed’s last published forecast (in December) predicted 2.6% inflation over the four quarters of 2022—as measured by its favorite index, the deflator for personal-consumption expenditures, or PCE. Should something like that come true, PCE inflation would be pretty close to the Fed’s 2% target by late this year.

Let’s take a little poll. Which of these is scenarios is most likely?

1. The best case scenario. By September inflation has fallen faster than expected, GDP growth is robust, and unemployment is low.
2. The “Goldilocks” scenario. Inflation and unemployment have declined slightly while rate of growth of GDP has continued to rise.
3. Inflation and unemployment have risen a little, GDP rate has continued to rise.
4. The worst case scenario. Inflation has continued to rise, GDP growth is sluggish or even negative, unemployment is rising, it’s an election year, and the political temptation to do things which will actually worsen the situation will be irresistible.

I think probably C but D is also quite likely.