Voting in the 2020 American presidential election raised the question posed by Johnny Carson’s game show “Who Do You Trust” (1957-1963). Candidate Biden was chosen based on trust in his half century track record as a political centrist opposed to his Party’s left wing agenda to promote racial, economic and environmental justice. “Follow the Science” on the pandemic became a campaign theme to bolster trust because scientists – unlike lifetime politicians – are perceived as purveyors of truth. The campaign worked, then centrism was abandoned.
COVID 19 brought to the fore the differences between advocates of science-driven management – the premise of not just pandemic management but the entire Biden Administration agenda – and competitive markets. How can producers and consumers stumble onto greater truths than scientists? Economist Adam Smith’s “invisible hand” explained how – almost a century before the naturalist, geologist and biologist Charles Darwin’s “origin”. Scientific investigations were historically the domain of idle rich like Smith and Darwin, because in addition to the need for peer review independent from political influence, they were expensive, time consuming and only infrequently produced interesting results.
Today almost-universal government funding either directly or indirectly has inevitably and irredeemable introduced bias (and sometimes worse) into science, particularly the social sciences. Political narratives feed back into the data, producing more noise .
To Tell The Truth, the Whole Truth and Nothing But the Truth
“As is the case with epidemiologists, the fundamental challenge faced by economists — and a root cause of many disagreements in the field — is our limited ability to run experiments. If we could randomize policy decisions and then observe what happens to the economy and people’s lives, we would be able to get a precise understanding of how the economy works and how to improve policy. But the practical and ethical costs of such experiments preclude this sort of approach.”
Hence economists, like virologists, rely on limited models to make generalizations. Virologists study the cellular makeup of a virus to explain pandemics. Economists study discrimination to reach a generalized truth about systemic racism, or financial panics to understand contagion. Physicists search for sub-atomic Higgs Boson particles to explain the origins and workings of the universe(s).
Witnesses in American court rooms on Perry Mason (1957-1966) swore to tell “the whole truth and nothing but the truth” under penalty of law. Scientific truth is a building block. Economists can then apply their tools, e.g., cost benefit, present value, probability, value of life, etc. to various alternatives to determine the whole truth and develop policies that are in the “public interest.”
But economists and politicians don’t take that oath. 95% of social scientists and historians identified as liberal/democratic, a bias toward progressive political action. The word “policy” derives from the Greek word for politics which is generally not aligned with the public interest.
Historians are even more liberal than economists, but most object to the 1619 Project. It’s not the income inequality caused by market capitalism, but government favoritism that’s unjust. Environmentalists use limited anti-capitalist models to produce seriously sub-optimal policy recommendations. This science isn’t “the whole truth and nothing but.”
Scientific certainties spanning decades or even centuries are often proven wrong with better methods and larger samples or metadata. The federal government has for a half century warned against animal fats in favor of margarine even though metadata disproved the theory in 2018. Just as virology models assume contagion due to irrational public behavior, economic models of “financial panic” assume uninformed individuals irrationally run on solvent banks; in actual fact depositors acted perfectly rational, queuing only at insolvent banks that were paying out at face value on a first come, first served basis. Large scale economic models that suffer from the bias of small scale models tend to over-estimate the benefits of political intervention and under-estimate the unseen “unintended” but predictable indirect costs.
The Politicization of COVID 19
The first question epidemiologists and virologists needed to ask was the origin of the virus, not to assess political blame but to better understand it. Even as the virus continues to spread, 10,000 pages of research have already been published by the Social Science Research Network. But we may never know the full story of COVID 19 origins because autocratic politicians (in China, the US and the international community) suppressed the evidence and squelched the story until the evidence could be destroyed. The WHO, a previously respected international agency (not the rock band) launched a political investigation, first adopting and protecting the political narrative that the virus did not come from a military biological warfare lab in Wuhan, China – then creating a pretense of investigating this and alternative theories. The Wuhan Lab Theory may remain a conspiracy theory due to the ongoing suppression of evidence and dissent, but no more so than the original market theory.
The press demanded action by politicians “to save lives” from the pandemic’s start, so politicians demanded answers from their scientists before they were knowable. Bureaucrats pretended to know more than they did, and many politicians took what they could tout as the strongest actions possible. The contagion models assumed the virus was like 1918, almost universally deadly; shutting down has no health or economic consequences; universal vaccination is risk-less and effective. The actual facts are that it is deadly for the infirm elderly, 95% with comorbidities: the lock down caused massive public health problems and cost trillions of dollars; the vaccine is not as effective as natural antibodies and comes with risks, especially for young children.
There is no point in villainizing bureaucrats: politicians asked the wrong questions of the wrong people. Only a few politicians were truly villainous (e.g., NY Governor Cuomo, with his mind on his lucrative book deal promoting his COVID management and eyes on the presidency signed the order condemning perhaps 10,000 elderly, then covered it up; CA Governor Newsom diverted much of state law enforcement to prevent surfers from accessing the Pacific Ocean while he was lavishly wined and dined.) But politicians failed miserably in protecting the elderly and infirm, and the consequences of the lock downs for which there was no scientific basis were orders of magnitude worse than the disease.
The main villain is the liberal press that did their best to panic the public by demanding the unconstitutional lockdowns while chastising President Trump for not ordering them. The New York Times, which led the charge, now reports that 40% of Americans don’t trust the news, including the Gray Lady herself. That’s because the press (along with TV news) has reverted back to being Infamous Scribblers mostly for the left (Questionnaires showed only a tilt at the top but 2016 campaign contributions were split 95%-5%).
The Autocratic Nanny State Isn’t God
In 1789 the Founding Fathers were apprehensive about trusting the federal government with expanded executive authority beyond the protection of individual rights and international affairs. In 1956 the official motto of the United States was changed from e pluribus unum adopted in 1782 to In God We Trust. In 1984 President Reagan turned the Russian proverb “Doveryai, no proveryai “ in English “trust, but verify” against his presumably Godless untrustworthy Soviet counterparts.
We are told that we must believe in progressive tenets and governmental institutions to “save our democracy” but this is perverse. We can trust the impenetrable and unaccountable administrative state, or political commissions that are always designed to promote the politically chosen narrative, to mislead rather than clarify and inform, with truth hidden in classified appendices. Even if bureaucrats had unimpeachable scientific information and only the public interest as motivation, they would never have the extent of information produced in markets by Neanderthal (to use the President’s term) consumers and greedy capitalist producers to make better decisions.
Some things historically required federal action, but the required scope of federal activities has shrunk since 1789. Even “roads and bridges” can be financed by user fees using AI that monitors, not just how much but what roads when. (Big brother is always watching.) Instead, the government now accounts for half of all spending (we have to pay half of all income sooner or later) and the federal government accounts for 70% of that (with increases planned), operating a Soviet funding mechanism.
The original 1956 game show title was “Do You Trust Your Wife.” We were married to the administrative state in a shotgun wedding. As the young Herod said to his best friend and future emperor of Rome, Claudius (who he would later betray): “Trust no one, my friend, trust no one.”
Kevin Villani, Chief Economist at Freddie Mac from 1982 to 1985, has held senior government positions, has been affiliated with ten universities, and served as CFO and director of several companies. He recently published Occupy Pennsylvania Avenue on the political origins of the sub-prime lending bubble and aftermath.