 Okay, why don't we go ahead and get started then? Is this, if you guys hear me, is this picking it up? Okay, great. So I am gonna be talking about bi-denomics. So let me just mention as a disclaimer at the outset, obviously what I'm gonna be doing is trying to focus this talk and point out some of the things that are unique would be a strong word. Like, so where this phrase comes from, the one I remember was where they called it raydenomics. And that has had to do with the economics behind the supply side revolution in the 1980s. So, you know, to talk about bi-denomics, presumably this is like, oh, the economics of Joe Biden. So let me confess to you of all the presidents that have been in charge since I've been politically aware of whatever I have listened the least to Joe Biden. And they don't pay me enough, right? It's just too painful. But let me mention though, so of course, like it would be obvious and obvious joke for me to open up with here to say things like, oh, you know, Biden's just a puppet we're gonna talk about the economics of the people who are, you know, writing a script for him or whatever. In the beginning, I thought some of that was overplayed that, you know, people would pass clips around on Twitter of, you know, Biden and look at this is incomprehensible. And I would play, it's like, yeah, he's an old guy and I, but I know what he's trying to say. You know, he just kind of went off on a tangent or he lost his place. And in other words, like a lot of the examples of look at how deranged or look at how, you know, he's got to mention, I thought, nah, did you guys see what happened last night, the town hall? There were some clips from there that I said, okay, yes, maybe they are right. So anyway, like I said, like I say, for this, what I'm gonna be doing is trying to isolate things that are if not unique, at least like the signature elements of what the Biden administration says it's trying to do with respect to the economy. Okay, so just to give you an idea of what we're gonna talk about here, he made a big thing, you know, saying after getting through the pandemic, what we're gonna focus on is the return to climate change. And there's a lot of the economics involved with that. And then unemployment insurance extension, stimulus infrastructure, and this earlier this month, he signed this executive order on competition. So with the limited time I have, I'll just try to hit some of the highlights on these areas. Okay, so as far as his climate agenda, some of the things they're doing, he's reentering the Paris Agreement. So for this talk, I won't dwell on this. There's a separate thing I did for Mises University in a previous year, if you're interested in this stuff. Just so you know, that's like one of my areas of expertise is I spent many years studying the economics of climate change, and you know, not just from an Austrian perspective, but just in general really getting into that literature. And so let me just give you a taste of what I'm talking about here is that this stuff, it's not merely that you would, if you're against the government taxing carbon dioxide emissions or putting regulations on how much insulation buildings need to have and so forth, or the energy efficiency of your microwave in your house. And by the way, all that stuff, the federal government really does have regulations on all those things, all right? So it's really incredible just how much of every aspect of your life the federal government thinks now it has the ability or the competence and responsibility to intervene in and to dictate to you on because of the threat of man-made climate change. It used to be global warming now, it's climate change. And so that's, when you get into that literature, like I say, it's not merely that, oh, because I'm a libertarian, I'm against this stuff for philosophical reasons, that's why I'm against it. The literature itself does not support any of this stuff. So I'll give you a couple of examples of what I mean in a minute, but it was shocking when I really got into this to see the gap between what the peer reviewed research, that's the gold standard or that's the fiat standard that they have for this stuff. Hey, follow the science, don't be a science denier, and then you go in and you read the actual published literature and what policy recommendations they're giving in the name of this stuff. Okay, so anyway, I have, at a previous Mises University, I had a whole thing on the economics of the Paris Agreement, something like that. So if you wanna Google my name, you can go find more. But what Biden did is re-entered it, and this is something that the Trump administration had done, and I was amazed that obviously Donald Trump on the campaign trail for the 2016 election was talking a good game about free markets, and this is crazy, and China's eating our lunch, and we gotta stop tying our industry's hands behind their back. And then he came in and pulled out of the Paris Agreement. I was amazed that he did something so bold, because if you're not familiar with it, it was just a huge move, like no other Republican president would have done anything remotely like that. It would have tweaked something and said, hey, instead of cutting back emissions by this amount, let's only cut it back by 2.7% less or something. That's what a Republican normally would have done, and he just pulled out of that, so that was amazing. But Biden undid it. He hosted the Leader's Summit on Climate back in April. That was the one you may remember where everyone was kinda poking fun at them, that they were all in their separate remote locations videoing in, and Biden still had his mask on just to make sure that SARS-CoV-2 didn't go through the internet and get people. And then he canceled a permit that was necessary for the Keystone Pipeline, and then it was just recently that the company that runs this thing, it's from Canada to the US, finally just gave up on the project, because they've been suffering years of delays, both in the courts and in terms of regulation. The Trump administration had, for its part, moved things along at the federal level, and then, so Biden sort of stymied that, that wasn't a surprise. He pledged that he was gonna do that in the campaign trail, and so finally, the company that was responsible for that just said, okay, forget about it. Incidentally, let me just mention, from a libertarian property rights perspective, there is a case to be made that this was not a good project, right? That there were property owners whose legal rights were being run rough shot over by this company coming in and in cahoots with the government and going ahead and building a pipeline. One could be a Rothbardian and object to this thing, but that's not why Joe Biden held up the permit, right? It's not that he was losing sleep at night over property rights, okay? So, okay, let me now just go on a brief digression, just to circle back to what I was mentioning to you before about this gap between what the peer-reviewed literature says and the climate agenda that Biden is now re-answering. So, the Paris climate agreement, and by the way, the reason they call it an agreement and not a treaty is because for the US to be able to get into it, if it was a treaty, then the Senate Republicans would have had to endorse it and they could have held it up, and so that's why under the Obama administration, they were clear, let's not call it a treaty, it's an agreement. So, what they originally said was, we're gonna, all the nations of the world that signed this thing are going to do what they can to limit total global warming to 2.0 degrees Celsius or less. And when they say that, they mean cumulative relative to pre-industrial times, like the 1800s, okay? And then, so they got everyone on board with that, and then activists, the environmentalists started agitating and saying, that's not enough, and they would come up with all these, the latest literature shows that it's much worse than we realized, it's every year they realize the problem is much worse than they realized, and so that violates rational expectations, by the way, in case you wanna zing the Chicago school, you can just say people have not learned. So, their warning, and they said, 2.0 degrees Celsius is way too much warming, look at it, the coral reefs would collapse, all these huge problems, forest fires, look at this stuff, look, open your eyes, and so then they ratcheted it back and said, really what we ought to do is get, try to limit it to 1.5 degrees Celsius, okay? But then they realized we might not be able to make it, but two is too much, so for sure, everyone's gotta stay under 2 degrees Celsius, but let's try to limit total warming from the planet to 1.5 degrees Celsius. Incidentally, just as an aside, that's the way we're talking here, to say, hey, what do we want global temperatures to be in the year 2100 is incredible hubris and obviously it's ludicrous, right? Just to even talk like that. But my point here is to say, even if you go into this literature and accept their basic premises on their own terms, the stuff they're saying is insane, all right? And I just wanna briefly give you examples of what I mean. So back in 2018, in order to sort of give a stamp of approval to this now growing movement among like the more radical activists to, hey, 2.0 degrees Celsius is too much warming. Let's now move the goalposts and insist on 1.5 degrees Celsius for this ceiling on how much global warming we're gonna tolerate. The UN's special body, the IPCC, which is the Intergovernmental Panel on Climate Change, issued this special report. And I know the PowerPoints is nicer, it's visually appealing if I grab things besides just text. And so I went to get the cover of this report, thinking it would be this flashy thing. This is the cover of the report, as far as I could tell, right? So this is very, very boring. They passed the savings on to you, it's my understanding. But so this was a report in 2018, it was a special report colon, global warming of 1.5 degrees Celsius. Now they were very slick about it. Nowhere in the report does it actually say the benefits of pursuing this goal would be higher than the costs, right? They don't actually say, this would be a good idea. And I don't just mean it's merely an error of a mission. They explicitly have sections explaining this distinction and saying, you know, there's a literature out there talking about weighing the benefits and costs of doing policies. That's not what we're doing here. All right, they're just taking it, saying scientists have told us we need to limit warming to 1.5 degrees Celsius. So here's policies governments of the world could pursue to that end, right? So they're being very agnostic. And the reason they're doing that is because there's no way using any possible framework that you could justify this stuff using conventional literature. So I don't mean according to the Heritage Foundation or the Catoans, I'm saying the standard peer reviewed stuff in mainstream economics of climate change journals, there's no way that this makes any sense. This is a crazy draconian goal. And so let me just explain, give you an example of what I mean, the same weekend that this was published in 2018, William Nordhaus won the Nobel Prize in economics for his work on the economics of climate change. Now, Nordhaus is not a Rothbardian. He is a Keynesian, he was a co-author in later editions with Paul Samuelson on his famous bestselling economics textbook. So Nordhaus is a Keynesian guy, he's big on government intervention. The point of him getting into the economics of climate change literature was to tell governments it's a huge market failure, humanity could spare itself trillions of dollars in needless damages if we had an optimal carbon tax. So that's who this guy is. He's not an ideologue from the right by any stretch. In his model that he won the Nobel Prize for in 2018, showed in terms of the latest numbers that he ran, it was the 2016 calibration, it showed that, oh, if humanity does nothing, the globe's gonna warm about four degrees Celsius. If we do what Nordhaus's model said would be the optimal carbon tax, it would warm about 3.5 degrees Celsius. And then, as a benchmark, he said, suppose we limited warming to 2.5 degrees Celsius, he said that would be so bad that would hurt the global economy so much and cause so much economic damage from higher energy prices and so on to hit that target or that constraint that it would more than swamp the additional reduction in environmental damages from climate change. And it would be so bad that just trying to limit warming to 2.5C would be worse for humanity than if governments did nothing at all. So that's what the Nobel Prize winner said in 2018. So if limiting warming just to 2.5C would be worse than doing nothing about climate change, 1.5C would be even worse than doing that. That was so draconian, he didn't even bother putting that in his model at that point because he thought that's just crazy. That's a ridiculous policy. So that's what I'm getting at here. And because he won the Nobel the same weekend that this report came out, places like the New York Times treated them as if they were complimentary. And so readers are like, oh, yep, the writing's on the wall, you know, all these different. It's the physical sciences, the economist, everybody knows how bad climate change is. And Nordhaus himself in interviews was real coy about it. Someone said, can we still hit the 1.5C target? And he just said, at this point, I think that's too late. He didn't say and thank goodness because that's a stupid idea. He just, he kept that to himself because he just won the Nobel prize and wanted to bask in the righteousness. So that's an example of what I mean where it's not just that, oh, that policy's not quite optimal. It's that the guy who just won the Nobel, his work says this policy is so incredibly stupid that it would be better for humanity just to ignore climate change than do that. And yet we're getting lectured about, you know, follow the science. One other quick one, the UN's IPCC, its body on climate change periodically issues reviews that distill down the state of the art of the literature, both the physical science and the economics of climate change literature, just to give a guide to policymakers. So they came out with one in 2014. It was the fifth such thing in that series. And its conclusions were very tepid, you know, vis-a-vis this kind of a target, right? So as of 2014, the UN was not supporting anything in the same ballpark as this aggressive goal. So then you're saying, oh, so by 2018, it's funny that they completely reversed themselves. And now to this, I guess all the experts must have changed their mind. No, here's what they did. If you look at, and this is something that my co-author Ross McKittrick noticed. All right, so this isn't my point, but this is amazing when you get, if you get what I'm saying. In 2014, they had about 60, don't quote me on that, but it's about 60 different, you know, economists, experts in this area on their panels to go ahead and review the literature and then, you know, report their findings. And they have like a lead author for the chapter and then the consulting editors and, you know, things like that, people who just do particular sections. So that's how these things work when they come up with these huge compilations. So in 2014, they had like 60 people contributing and they said, here's the state of the art of the science. Didn't come anywhere close to supporting something this crazy. 2018, they come out with a report, be very coyly leading you to believe this is a good idea. And again, they had dozens of experts for this new one. Of those two groups of people, the people that back in 2014, the UN said, these are the experts on climate change in terms of the economic policies. Let's see what they have to say about the literature. Four years later, this comes out the recommendation or the implicit recommendation flips completely. Of those two groups of experts, there was only one person who was in both groups. So they completely changed who the experts on the literature were in four years. All right, and so that's partly how, so to be clear, the people for this one, they all had PhDs in the appropriate area. So they weren't just the guy off the street, but the point is they were a different group of people from who four years earlier had been anointed to be the ones to summarize the literature. So that's part of the tricks that they use. Okay, switching gears now back to what the Biden administration is doing. So unemployment insurance, let me just summarize some of the big picture and then we'll talk about the economics of it. So typically in the United States, this is handled at the state level. So what happens is if you have a job, part of what the employer on your behalf is paying into the unemployment insurance fund, and then if you get laid off, you can apply for unemployment insurance. It's called, Hans Hoppe would not like using the term insurance here, but that's what they call it. And so, you know, I don't have a job right now. I'm looking for work, and then you get checks from the government to help you get by and they justify that both on humanitarian reasons, but also, oh, we don't want aggregate demand to plummet when people get laid off. We want them to keep being able to spend. So that's the justification. And that's typically handled at the state level in the US. And it's typically a fraction of what you were earning when you were employed, right? So every worker's, if you get laid off and you're getting unemployment checks from the government, you're not, for one thing, the check's different. So how much you earned when you were employed affects how much the government sends you, the way these things have been run historically. And there's a finite time, right? You can't just keep doing that forever and be unemployed for 10 years. At some point, they cut you off. Okay, so that all, and the fraction was like 50, 65%, something like in that range. Okay, so that's how that thing was typically run. When the pandemic hit, they passed in March of 2020, the so-called CARES Act, right? They always got to come up with these acronyms that mean the opposite of what they're doing. And what that did, and you'll see in a minute here why this is particularly alarming or why this had such a drastic impact possibly on labor supply, is in the CARES Act, the federal government came in and said, we're gonna supplement what the states are paying to people, right? And partly, and I saw some libertarians justifying this, and there's a case to be made that, well, wait a minute, if the government at various levels is literally preventing you from going to work, right? Because they're making you stay in home that they're saying your business is non-essential. And so if the government's using its force to stop you from going to work and earning a living, well, then yes, they need to compensate you, right? Just like in the real world right now, if the government says we gotta build a highway where your house is, get out, and then they compensate you, there's a case to be made that you shouldn't view that as you getting stolen money from taxpayers that, hey, the government took my property without my consent and at least they're compensating, right? So I'm not weighing in one side or the other here, but I am just saying some people could plausibly argue that if the government's not letting you go to work, maybe they should give you some money as compensation. Okay, whatever the rationale, whatever you think about it in terms of the principles, this is what they did. And the way they structured it though was, so the states are still doing what they're doing, and then the federal government was just giving everybody, regardless of how much they made when they employed a flat $600 per week supplement for unemployment insurance, what they were calling unemployment insurance, if you didn't have your job during the pandemic, right? And then that originally was gonna be through July 2020 and then that ended up expiring back in December of 2020. Congress came in and reauthorized it at $300 a week, and then the Biden administration went ahead and extended that through, I think the latest right now is September of this year, 2021. Okay, so, and this is the one where I think it was this context, you might've seen that quote where Biden, like he's whispering and he leans forward, he goes, this is good, it helps people, puts money in the economy, doesn't hurt anybody, right? And I saw someone retweet that and said, me trying to justify a three a.m. Taco Bell run. But, so that's where they're coming from with this. So now the concern is, why would this be controversial? So here is, for people in the back, let me, that's labor force participation rate, okay? And you can see here that there's a huge drop off going into the panacea, this is 2020, right? So huge drop off, and then it did bounce back a little bit. It did bounce back a little bit, but obviously not fully recovered. Before I continue on this, in terms of the economics, let's just do a quick, how to mislead with statistics. Let me just draw your attention to this axis over here. You see that number? That's not zero, right? So that drop looks bigger than it really is, right? So just so you know, I didn't calibrate, this is just what Fred, the St. Louis Federal Reserve's website automatically does. So you can't trust the Federal Reserve is what I'm getting at. But in case you're not getting my point, is looking at this, it looks like the labor force participation rate fell off like 30%. And I'm saying, if you look at the axis, it's not that big. It's, you know, they do a snapshot around the chart, but in any event, that's still, you can tell, a big drop, and then yes, it did recover, but not, made up about half the ground, okay? And anecdotally, I'm sure many of you have noticed, especially for like restaurants and things like that, where they have signs up often saying, I've seen this in different states and whatever, saying, please be patient with us, we can't get workers, we're training new people, you know, that's why your order's gonna be all screwed up, these words they're basically saying, all right? So number one, if you have never been employed before, hurry up and do it before September. Now is the easiest time if you're in the United States for you, if you're a young person to get a job, because the people who used to work in those areas right now are still getting paid by the government to not work. And so, you know, they're weighing the costs and benefits and when you're getting paid, that's another reason to delay coming back into the labor force. So the critics of this extension of the unemployment insurance are saying, what do you think's gonna happen? The government's, in many cases, literally paying people more to not go into work than they would get if they started going to work, right? Because once you take a job, then you lose these benefits, all right? So that's the argument. And Biden, of course, was saying, oh, no, no, no, no, the fact that the job numbers that they weren't as impressive in April, that's when this was like a hot topic. And this controversy came up again. He was saying, oh, the fact that, you know, the job numbers went, well, yeah, it was disappointing the report, but we are hiring more people. There's more people hired now than there were, you know, three months ago, the economy's improving. And so that's why this is a good idea, right? It's not that we're paying people to stay home. And even Janet Yellen came out, as an economist, she had to be a little more coy about it. And so she just said something like, well, I don't think the fact that we're, you know, the higher compensation for, and in terms of unemployment checks, is the reason that the labor force participation rate is remaining low, that it's, you know, because people are still scared about coronavirus and things like that. Some of these industries are supply chain problems. So she wasn't denying that, yes, other things equal, if you give people higher unemployment benefits, they're gonna be slower to return to work, right? They would be hard as an economist to say that. I mean, that's like in Krugman's textbook, that's standard stuff. If you pay people for something, you're gonna get more of that outcome. So if you're giving people more money, if they're unemployed, don't be surprised if on the margin more people choose to remain in that status. But she was just saying, that's probably not what's driving, you know, this lag, this reluctance of people to come back into the labor force. That's where her argument was. So I won't dwell too long here on the, so it's arguably empirical, right? That yes, a priori, clearly paying people more higher unemployment is gonna be one factor, but there could be other things swapping it. So that's what the argument is. So I went in just to look at this literature. So I don't need to summarize, you know, the people arguing, bumping up the numbers, prolonged unemployment, because that's pretty obvious. What I'm gonna show you here is how you can use, like the critics, to even use their own work just to show, right? So sort of a fun little exercise. So here, the screenshot, I'm just showing you the, where I'm getting this from. So it's from the Washington Center for Equitable Growth, just the fact that it's the Washington Center for Equitable Growth tells you most of what you need to know about where these people are coming from. And then it says, the long run implications of extending unemployment benefits in the United States for workers, firms, and the economy, and this came out in December of 2020. All right, so one, the whole, it's very glowing. This is very much in support of the federal government supplementing the states with unemployment benefits. And it has all kinds of charts like this. I'll just read some of these key things. So the title here says, when workers have access to a longer duration of unemployment insurance benefits, re-employment wages increase. And then the bottom here, it's showing different, how long the unemployment benefits were in place for. Because like I said, historically, you'd get cut off after a certain time. And then with each new economic calamity, it certainly, for what was called the Great Recession, to be more generous and to not be so heartless and cruel in the face of these horrible economic times, Congress would keep extending the benefits, because no one wants to vote to cut off unemployment insurance when the unemployment rate's really high. This is terrible politically, the optics of it. And so what these people who are for such policies are trying to show is, look, as you extend, how long the government pays people unemployment benefits when they're out of work and still technically looking for a job, once they finally do get rehired, the wage they get tends to go up. So if they just have 26 weeks, you see that the wage increase relative to before they got laid off is a little bump, 72 weeks, 79 weeks was the maximum benefit length in 2009. And then what happened in 2010, 2011, it was up to 99 weeks. You just do the numbers like there's only 52 weeks in a year, that's a long time to be getting checks from the government while you're looking for work. And so you see how that just keeps going up. And they talk here in the bottom about how it's a matching problem, right? You're unemployed, you're looking for work, employers are out there, they need workers, and they're searching for each other. They're just trying to find each other, you can play some romantic music, and then once a match is made, then you get hired. And so their point is, if we expand the length of time for which we're willing to pay workers during the search process, ultimately when the match is made, they're gonna have a higher pay. So what I'm saying to you is, notice this is entirely consistent with the story that increasing the length of how long you pay, the benefits that you're paying them will make them stay unemployed longer, right? That's why they can find a better match is because and get higher pay once they do get hired again, is because they have longer to look. Okay, so I'm saying this whole study, nothing in it contradicted what the critics were saying, even though the authors of this study were putting it out as if this is to rebut those critics that say, overly generous federal unemployment benefits during the pandemic are somehow hurting the labor force. No, no, no, actually, look at the longer we, so this isn't about the size of the payment, this particular study was looking at the duration, but saying if we have a longer duration, workers end up making more. So how could you possibly say this hurts labor? So you see what they're doing there? So again, this is entirely consistent, right? The mechanism by which this comes true is that people stay unemployed longer and spend a longer time looking for a job that pays more. Or thinking of it the other way, in order to get you to stop taking checks from the government, which are more than you were making before, you need to find a job. You have to wait until you get a job offer where you're getting a huge raise, right? That's the only thing that would induce you to stop getting checks for doing nothing. Okay, so that's another way of looking at it. But my point is even this website or this study that was for the policy is actually totally consistent with what the critics were saying. I found another one. So I googled news stories looking for unemployment insurance, restricts labor supply or reduces labor. And the author, I think it was like, it was vox.com. I'm almost positive, right? So they were wagging their fingers at this notion. Oh, don't listen to these right wingers. And they said, after all, a study from the summer of 2020 when the CARES Act first kicked in showed that it didn't have an impact. It didn't reduce labor supply. And so again, you see that huge drop in the labor force participation rate and people like Janet Yellen just arguing, well, it could have been due to lots of factors. We don't know. But now this one's saying, no, empirically, they went and looked and showed that it didn't, it wasn't because I was just curious, well, what was the argument? So let me just show you. Before I do that though, let me just pause and make sure you understand the numbers involved here because probably you have common sense. That's why you're here in Auburn. And you assume, you know, your understanding of how ridiculous some of these payments were compared to what the worker was making, you might have thought, well, I'm sure it wasn't that unreasonable. Oh, wait a minute. So here, this is from their table. I just want to make sure you understand how this thing worked and why, remember, I said 10 minutes ago, the flat $600 payment from the federal government regardless of what you made, why that was so severe for particular workers. So $300 weekly earnings. So these two columns are saying, let's take a typical worker. So somebody who was making, when they were employed, $300 a week, precares, meaning before this March 2020, federal package came in, like the way it was traditionally handled at the state level. In California, for example, your unemployment compensation for the time that it was being forced would be $150 a week, right? So there, that was 50%. So again, if you had been a worker who made on average $300 a week when you're employed, you get laid off. The California government administering its unemployment compensation plan would give you about 150 a week. So after the CARES Act kicks in in March 2020, you're now getting on top of that an extra 600 a week. So they're saying you're getting total 750 a week. And notice the percent change going from 150 to 750 is a 400% increase, right? So that's what those percentage changes are referring to, saying what's your compensation, your unemployment compensation, pre, CARES Act and post. And so for different workers, that jump is a different percentage, right? That's what they're trying to get at here. So it wasn't treating all workers the same or didn't impact all the workers the same. In Oregon, as opposed or in contrast, you got 195. So you can see they gave you more than 50%, but not that much more, right? So typically you'd get about 195. So that increased to 795. That's only a 307% increase, okay? So what they're doing here is they're establishing there's variation in the data, right? So if you're gonna do an econometric study, it can't just be everyone gets the same treatment and then you go and look at the outcome because there could have been other things going on. Ideally what you want is people get different sizes of the dose of the thing that you're looking at, the treatment to then see how does the outcome change so you can kind of get some variation. So that's what they're doing here is they're showing, look at our data has lots of variation in the independent variable. What about people making $600 a week, right? Because different workers made different amounts of money. For someone who typically made 600 a week when employed in California, the pre-cares payment would be 300, right, 50%. You add 600 to that, so now it's 900. So that's a 200% increase. And then, but in Oregon, it would be 390 to 990. So that's a 154%, okay? So you see how these numbers are coming where they're coming from, but two things. One is they're different for different workers, but you see why that flat $600 payment is so enormous because for particular workers, look at the impact it would have had. And that's what I mean when I'm saying, lots of workers, this wasn't a right-wing exaggeration. There were plenty of people, millions, who were truly getting paid more to stay home than if they went back and took a job. So of course they would be crazy for them to take a job just in terms of the narrow cost benefit. Beyond that, if you go and look at some of the discussion about when they came up, like how did they come up with the $600 figure? They did it quite consciously to replace the median workers' wages, right? So they wanted it to be that workers were getting paid at least as much as they were before the pandemic hit because they wanted them to stay home, right? And they made no bones about it. They were saying, yeah, we don't want people to have to choose between limiting the spread of coronavirus and putting food on the table. So that's why we need it to be that they can't just get 50 or 65% of what they used to make. That's not enough to make ends meet if we were telling them to stay home for three months, we got to bump it up, right? So it's ironic that now after it did what it was designed to do, people are scratching their heads and saying, why are these right-wingers saying this had anything to do with labor supply, right? That was the ostensible rationale for it. Sort of like with the housing bubble stuff, when people, when right-wing types later were saying, well, the government was trying to encourage loans to people who wouldn't have qualified otherwise. And so maybe that's partly why some people got into houses they shouldn't have. And then the critics were, what are you talking about? You're just making this stuff. Back when it was working, that was the whole rationale of the program. They were saying, we can't just let free market lending rule the day because not enough people get loans, we need the government to come in. And then when it blows up, all of a sudden they're denying that that was the rationale. So a similar thing here, but let's go back to that pay pressure. So these are some of their results. I'll just walk through this one slide. I know it's in the back, it might be hard to see. So they're looking at an event study, the effects of the replacement rate ratio on the probability of employment. So what they're trying to do is empirically assess, looking at, because they had vast amounts of data in terms of the surveys and stuff that the federal government collects to see given what those ratios were, just to remind you, like the 400%, the 307, the 200, those numbers, that's what they're looking at. They're looking at how much were you getting from the state before the CARES Act and then after, and then they're gonna group workers by those percentages and look and see, do we see any difference in the employment probability of that group of workers based on if we segregate them and group them according to how much did their unemployment go up when they started getting the 600 a week, flat payment from the feds. And lo and behold, it does look like there's a big difference. And it works out exactly as one would have guessed. So that bottom line, that red one is 5.0 or greater. So they're saying the ratio, if the amount of unemployment compensation you got is 500%, well, 400% greater, five times as much, then the probability of you being employed, like as of May, 2020, a few months after this thing kicked in, this is 30, so it's like our negative 34%. There's a 34% chance less that you're gonna be employed when they checked in May of 2020, if the amount you were getting paid was five times more than it normally would have been. And then the green line you can see is between four and five. So those colors line up exactly as you would expect. And again, it's not like a little effect. You can see, so this time the axis isn't misleading. That is the right axis, that's zero up there where they all are together. And notice, before the pandemic, those lines were all very close together, right? And all of a sudden the pandemic hits, the CARES Act kicks in at the dotted line, and you see all of a sudden this huge dispersal, dispersion, I guess is the word I want, and it lines up exactly as you would expect. The people who got paid more compared to beforehand are much less likely now to have a job if we check in in May, for example. And so again, on its own terms, doesn't this confirm exactly what the critics are saying? Like, how is this an argument against it? Why is the Vox writer saying a study in July of 2020 showed the CARES Act had a negligible impact on employment probability? This is what the argument of the author's saying. They're saying, yeah, it's true, looking at past that dotted line, but if you look at before the dotted line to after the dotted line, it doesn't look like anything big changed, right? So they're looking at this. They're not looking at this gap or that gap. They're looking at the gap here, where did the gap there? You see that? And so they're saying, look at this chart. I don't see why that dotted line has anything to do with it. So that's the argument they're making. And I'm just pointing out to you that the raw data is entirely consistent with the story. They're arguing that, well, it must have been something else that caused it because the CARES Act, those $600 checks didn't actually start coming in until the dotted line. So whatever it is that made those groupings spread out like that must have been something else. I gotta move on here to hit the other points. Let me just anticipate an obvious response from somebody who believes in incentives and the fact that people respond rationally to getting paid more to stay home is to say, okay, well, people knew this was coming, right? So the fact that, and this timeline is very narrow, by the way, that's like a one week difference going from those two data points. So to say, because you start seeing the impact of the CARES Act a week before the checks start rolling in doesn't mean it didn't influence people's decisions, right? Especially in the midst of a, you know, they're being told that this thing is gonna kill everybody. Why don't you stay home? And the authors try to go through and show, well, if you look at congressional testimony, it wasn't obvious how big the payment was gonna be. And so we don't think that, you know, the anticipation has anything to do with it. All right, so they do try to deal with that. But in any event, this is what the outcome shows. Okay, stimulus infrastructure. This has become sort of a running joke where members of the Biden administration are trying to argue that just about anything is quote infrastructure, because again, that's for whatever reason the public is okay with that. Spending money on infrastructure, they're thinking, yeah, the roads are terrible, that bridge is gonna collapse on me. Given the government's gonna spend a bunch of money, I'd rather they spend it on that than boondoggle projects. And so it was sort of a running joke where, like I say, Biden officials were arguing that all sorts of stuff was infrastructure when it clearly wasn't. But even on its own terms, this is from the CBO, the Congressional Budget Office's latest long-term budget outlook. And this is the federal, U.S. federal debt as a share of the economy. And you can see where we are right now. It's not quite, it's almost as high as it was at the peak level during World War II. And then it just keeps going. And that is not because the people at the CBO forecast a huge recession because they believe in Austrian business cycle theory. This is just on autopilot. This is what's baked into the cake because of demographic trends with Medicare and Medicaid, you know, the aging of the population, what's sometimes called unfunded liabilities if you're familiar with them. And as they forecast that interest rates go from rock bottom levels up a few points back to more historic norms, right? So they're not predicting a huge spike in interest rates because the bond market flips on the U.S. and they crash the dollar. That's not what it, it's just, well, interest rates right now are historic lows. They're gonna start inching up over the next couple of decades. And given the outstanding federal debt, if interest rates go from one and a half percent to 3%, that's gonna have a huge impact on the cost of servicing it. It's that sort of thing that is driving that. Okay, so this idea that the federal government has not been spending money on bridges and roads and that's why everything's in disrepair. It's crazy. And also just to say, oh, what we really need to get out of this and to have the economy recover is just more federal spending and in particular deficit spending. You can see that's these numbers don't add up that the way things are right now they're spending way more than they should. And especially as unemployment officially drops, you would think they would be forecasting surpluses. Okay, now that we're emerging from this, let's go ahead and flip to start paying down some of that, but that's not what they're doing. Okay, last thing I'll mention here is this executive order on competition. So I think it was earlier this month that Biden actually signed. They had been talking about it for a while. There's one good element of this. So it's occupational licensing reform. Now, when I say good element, what I mean is in principle, this could be a good thing. They could take it and do something good with it. They are at least acknowledging the language and there's very watered down, but they're saying things like occupational licensing, just to make sure I'm not losing anybody. What that means is it's often handled at the state level, but there's also ways that the federal government gets involved with it. It's saying that if you wanna be able to work in a certain occupation, you need to get a license from the government first. Okay, so the way to adjust to a normal person who doesn't trust the free market and thinks businesses are out to get you and they think that the government's there to protect you, the way they would understand this and historically what this was supposed to be would be things like, oh yeah, if you wanna become a brain surgeon, you can't just put up a shingle and clean off your pool table and maybe put a tarp down or something for sanitary reasons and then just start operating on people. You need to have a license from the government, typically state level, right? The state medical board has to license you. It's illegal for you to practice medicine or for you to practice law is another good example, right? You need to pass the bar, you need to have a law license law and then how do you get that? Oh, you gotta go to law school. How do you get a medical license to be a brain surgeon? Well, you gotta go to medical school, right? So there's a, I would say collusion, you could just say an affinity or an interaction and cooperation if you wanna use less loaded language between academia and the government regulators on this stuff and again, the ostensible rationale from the public's perspective is to weed out charlatans, right? To make sure only qualified people are in these very sensitive areas, particularly things where it would be hard for the consumer before buying the product or service to judge and then if it goes poorly, you can't just say, well, I'm never going back to that guy to operate on my brain. You know, that didn't work out so well. Now I have 16 lobes, right? So they're saying, that's different from, oh, I went, you know, I bought a, I'm trying to think of something innocuous. I went to take my dog to get groomed and the person did a bad job and my dog looks goofy for two months until the fur grows back. Like that's pretty innocuous. And yet dog groomers and certain jurisdictions do need to get licensed, right? So there's, my point is there have been such ridiculous over the top horror stories of this stuff that are absurd that even normal people who normally don't trust the market and are okay with governments coming in and regulating can see that, wait a minute, this isn't about protecting the public. This is just about the entrenched producers in an industry limiting competition from newcomers. And it's quite explicit. Like this is obviously what happens because given that there's, you know, a board to say, like, okay, in this jurisdiction, how many new people can open a hair salon? Who should get a license to be able to become a hairdresser? Like to do African braiding, for example. And so who are the experts on that? The people right now who are doing that for a living. They're the experts, they're the ones already in there and they get to decide what the optimal number of new entrants to allow in the community is. So you can see how that's a very dangerous system and liable to corruption where they're gonna say, oh, in the interest of the public, I think we gotta be, you know, raise our standards to make sure that the hairdressers in this area are impeccable. And naturally that raises wages in that industry. So like I say, there is some language if you go and read this executive word that Biden signed earlier this month about. Yes, while it does protect the public in certain things in some areas, it's perhaps overzealous and so we're gonna, you know, use the tools of the federal government to pull that. So like I say that at least there's a nod to something that somewhat makes sense. But a lot of the rest of it is just completely wrong-headed. Let me mention, I don't know if you guys covered it in terms of the standard curriculum, in terms of what you did this week. I looked through the lectures, I don't see something jumping out at me, but certainly in previous Mises use, there've been lectures on like anti-trust enforcement. And so if you go and look at that, the Austrian school is very good on competition and how the mainstream gets it wrong. And so in particular, the metric of well, how many firms are in an industry, that is a misleading statistic, right? It'd be much better to have one or two big firms controlling 95% of the market so long as there was free and open competition and any upstart could come in and challenge them as opposed to 20 firms splitting the market 5% each, but the government makes it illegal for anyone to come in and compete with them, okay? And so the Austrians are very good about that and thank you for your time.