Today, Steven Koonin and Scott Atlas propose a framework for analyzing policy failures involving “the consensus trap”; Hoover invites you to an event examining the presidency in historical context, featuring Niall Ferguson and David Kennedy; and Isabel Lopez Ysmael examines the impact of high-skill immigration on opportunities for American workers.
Science and Policy
In this new research paper featured in The Wall Street Journal, Senior Fellows Steven E. Koonin and Scott W. Atlas, with Terrence Keeley, examine “three of the most consequential public policy failures of the past two decades—the 2008 financial crisis, the COVID-19 pandemic management, and the campaign for rapid decarbonization.” The authors argue that each of these episodes “share a common pathology we call the consensus trap,” wherein “powerful institutions and leaders” align “in manufacturing a consensus not supported by the evidence.” The authors suggest a common pattern to these policy failures: “The consensus is asserted, credible dissent is suppressed, the policy fails, and the accountability is lacking.” The paper and companion op-ed make the case that institutional reforms, including within the federal judiciary, can help to prevent repeat occurrences of the consensus trap. Read more here.
US History
On October 20, Senior Fellow Niall Ferguson and Distinguished Visiting Fellow David M. Kennedy will headline Hoover’s next event in the yearlong Ideas That Made Us: Dialogues on Freedom series commemorating 250 years of American independence. Ferguson and Kennedy will offer a provocative examination of the presidency through the long lens of the American experience. Is the United States today entering genuinely new territory, or are forces that have previously shaped the nation reemerging in new forms? The distinguished historians will exchange ideas on how history can illuminate our understanding of the present, as well as where comparisons to the past can fall short. Register for this free in-person event at the link below. Learn more and register here.
Immigration Policy
Do high-skilled immigrants take jobs from American workers? It’s a common worry, and not an entirely unfounded one, according to this paper from the Hoover Immigration Initiative. But most Americans come out ahead, as wages tend to rise and the benefits spread well beyond the industries that hire foreign talent. Restrictions, meanwhile, harm US competitiveness and weaken growth across the economy. Author Isabel Lopez Ysmael argues that immigration restrictions aimed at protecting native workers may prove counterproductive. If firms can’t find domestic workers with the skills they need, they may offshore high-skilled roles to other countries instead—taking support roles with them. Read more here.
Economic Research
“You would not expect an 85-page equation-packed economics treatise to stir public feeling,” writes The Economist. “Yet in Singapore, a new working paper by four economists,” including Senior Fellow Amit Seru, “has.” According to the paper, “between 2007 and 2019 civil servants in the squeaky-clean city-state were 60% more likely to buy private flats within a kilometer of planned but unannounced Mass Rapid Transit metro stations, compared with a control group. Those who subsequently sold got S$80,000 ($62,000) or so more than owners of similar flats in other parts of town for every year they held on to their purchases.” As the article notes, the paper generated quite a stir in Singapore, as it was published on the eve of lawmakers being granted a pay increase. Read more here.
California Decides
If approved by California voters this November, Proposition 37 would create a state-run second-mortgage program for “moderate-income” Californians buying newly built homes. To qualify, a buyer must have lived in California for at least one year, must occupy the home as a primary residence within 60 days of closing, and must have family income no higher than 200% of the area median income for their county. A qualifying buyer would still take out a normal primary mortgage from a private lender. On top of that, the state program would provide a fixed-rate second loan covering up to 17% of the purchase price, the share ordinarily covered by a down payment; the buyer must still put in at least 3% of their own money. Voters face questions including whether borrowers will repay the bonds issued under this program, and how the state would likely respond if many borrowers default. Read more here.
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