One of my favorite ideas in economics that is so rarely talked about and definitely not in the public consciousness is dead weight loss. Dead weight loss is the concept that when the government imposes a policy whether taxation or mandating behavior, people are not free 1/n
To pursue their preferred outcomes or behavior and almost always results in lower utility and efficiency. Simple way to think of, assume a tax is imposed that raises $1 but people work fewer hours. We do not directly observe the fewer hours worked but we observe the $1 raised 2/n
Most of the time, not always, economists find that the dead weight loss outweighs the policy imposition. This is why to me I have a high hurdle on government action to impose something. We also see this in natural phenomenon. Recent research found that when Japan turned 3/n
Off nuclear after Fukushima, they utilized significantly more coal and that killed a lot more people. The second order effects that we don't see with our actions are more often MORE important than our direct policy actions. We see so many examples of this right now. 4/n
Let's assume Beijing is telling the truth and it is safe to go back to work right now. They have 15 years of constant lying in public health scares so no one believes them. Second order effect. How many people in China are going to die because of unattended NON-corona 5/n
medical needs compared to corona cases? I honestly can't wait to see what will surely be a flood of job market papers in the coming years about policy restrictions and dead weight loss. I'm betting dead weight losses imposed far far far outweigh the gains even prioritizing life
