With the American Rescue Plan Act – not that we appear to need $1.9 trillion in “rescuing” – having taken shape, I’ve updated our K‑12 distribution estimate.

The main change from previous iterations is the addition of $2.75 billion that is to go to private schools, and diminution of what is available to public schools from earlier versions of ARPA.

Note that not all private schools will be able to access the new funding. There are important strictures, including that the money only be distributed by governors to “non-public schools that enroll a significant percentage of low-income students and are most impacted by the qualifying emergency.” I am also assuming that with the new money for private schools, those schools will not be permitted to receive “equitable services” funding. Finally, I changed the title of the last columns from “Biden” to “ARPA.”

These updates change the estimates of aid per public and private school student, as well as total K‑12 money for all federal COVID-19 relief legislation. Total K‑12 funds (not shown) is about $213 billion. Aid per public school student is $3,919, and per-private school student is $2,513. Of course, different students will get different levels of benefit based on the specific school they attend, where they live, etc., and some of the aid to states and localities, not factored in here, may also help schools and students.

Economist Bob Lawson writes:

I have yet to see an argument for wearing masks (and distancing) now that doesn’t apply literally at all times. If you accept that masks have some effectiveness against spreading diseases, which seems reasonable, why should they not always be required? COVID-19 maybe 10x worse than say the flu and maybe 100x worse than other infectious diseases (even common colds can kill) but these diseases kill too. If masks are morally required now, why not before, and why not forever more?

Probably lots of people are wondering the same thing.

There is an argument for wearing/​requiring masks now that does not apply at all times. It is that COVID-19 may have increased the benefits of masking to the point where the benefits of broader masking now exceed the costs. That rationale may apply now but may fail to apply at some point in the future if the benefits of masking falls.

We don’t usually think about masking and other infection-control measures in terms of supply and demand curves, because these activities do not involve economic exchanges. But that framework provides the clearest way to think about when people should adopt such measures. It doesn’t provide a specific answer. But it tells us the optimal quantity of masking is the point at which marginal cost equals marginal benefit.

Masking is a service with both costs and benefits. Some person-minutes of masking are low-cost. Other person-minutes of masking are very costly. When we assemble these person-minutes in order of cost, they form a marginal-cost/supply curve.

The tricky part is the benefits. Since masking involves positive externalities, the demand curve (which reflects willingness to pay) is not the same as the marginal-value curve (which reflects total social benefit). The marginal-value curve is (much) higher than the demand curve, which is another way of saying the value of each person-minute of masking is greater than what anyone is willing to pay you to do it. That’s a pity, because the total-social-value/marginal-value curve is much harder to observe than the demand curve.

And it only gets trickier from there. Masking also involves positive network externalities. That’s a fancy way of saying my decision to wear a mask can increase the value of your decision to wear a mask. Do you know what that means, kids? Multiple pairs of demand and marginal-value curves that form a new, composite marginal-value curve!

All this stuff is so inscrutable, we really couldn’t tell what the optimal level of masking was even prior to COVID-19. It may have been the case that lots more masking would have produced large net benefits in terms of reducing morbidity and mortality from flu and other bugs.

When COVID-19 emerged, it permanently increased the value of each person-minute of masking relative to a COVID-19-free world. (Equivalently, it shifts all of those component demand and marginal-value curves, and the composite demand curve, to the right.) COVID-19 made it much more likely that lots more masking would produce large net benefits.

But it may not always be the case that we should sustain existing masking levels forevermore. The value of masking falls as herd immunity, innovations in treatment, and other factors make COVID-19 and other airborne pathogens less of a threat. So even if masking makes sense now, it might not make sense later.

After all the complexity, the response to Lawson’s challenge boils down to this.

1. It may have made sense to mask more often pre-COVID-19. We really don’t know.
2. COVID-19 has permanently increased the value of masking. We don’t get to go back to the old normal where the value of masking was lower.
3. Economics confirms what intuition suggests: it makes sense to mask more often now. We really don’t know how much more.
4. Contra Lawson, that doesn’t imply we should mask all the time. (Wear a mask while sleeping or swimming? Probably not a good idea.)
5. That’s because masking isn’t an either/​or/​forevermore sort of thing. It’s a question of balancing marginal costs and benefits.
6. Even though COVID-19 permanently increased the value of masking (that is, relative to a world without it), the value of masking could still fall over time if vaccines, medical treatments, or other factors reduce the value of masking.

I am curious to know what Lawson thinks about this analysis.

The first-in-the-nation case against mandatory COVID vaccination was filed today by a Dona Ana County, N.M. detention officer who claims he was fired for refusing to receive the first dose of the mRNA vaccine. Last month the County Manager mandated vaccination of all county-employed first responders—which includes sheriff’s deputies, firefighters, and detention officers.

According to a report in the Las Cruces (N.M.) Sun-News, the plaintiff, Isaac Legaretta, argues that the Centers for Disease Control and Prevention’s advisory committee stated that vaccines given emergency use authorization should not be mandated. Further, the plaintiff points to federal law protecting the right of patients to refuse administration of any unapproved product, asserting that emergency use authorization is not the same as formal approval.

The County Manager’s office contends that, unless special working arrangements are made for those refusing vaccination, “being vaccinated is a requirement and a condition of on-going employment with the County due to the significant health and safety risks posed by contracting or spreading COVID-19.”

As I have written:

In a free society, no person should initiate force against another, and should use force only in retaliation or self-defense. Forcibly injecting substances into someone else’s body cannot be justified as an act of self-defense because there is no way to determine if the person will ever be responsible for disease transmission.

On the other hand, people cannot be forced to associate with someone they consider—rightly or wrongly—to be a threat to their health. And employers cannot be forced to employ people they consider a threat to the health of their customers, clients, other employees, or themselves.

Advocates of mandatory vaccination often point to the landmark 1905 U.S. Supreme Court decision in Jacobson v Massachusetts to claim that states may mandate vaccination. Actually, the decision was more nuanced. The Court upheld the Massachusetts Supreme Judicial Court’s finding that the state did not have the power to vaccinate by force a person that “deem[s] it important that vaccination should not be performed in his case.” However, the state could require the person to pay a nominal fine, which it did not consider a violation of that person’s “fundamental right.” In that case, in which the city of Cambridge, Massachusetts instituted compulsory smallpox vaccination, Henning Jacobson, after losing in the Massachusetts Supreme Judicial Court, took his case to the U.S. Supreme Court. He ultimately paid a fine but did not get vaccinated.

While I have been very impressed with the efficacy and safety of the new COVID-19 vaccines and encourage people to get vaccinated as quickly as possible, I respect the right of individuals to refuse vaccination along with the right of others to refuse to associate with unvaccinated individuals.

It will be interesting to see how this case plays out.

A seemingly scary story in The Wall Street Journal, by Jason Douglas and Joanna Sugden, warns of “a more-contagious and possibly deadlier coronavirus variant” in the U.K., implying that British cases and deaths are spreading faster than before.

The reason the new “more contagious” strain is supposedly spreading so rapidly, they suggest, is because the British government failed to continue a suitably strict lockdown on businesses, workers, and consumers.

“When lockdown lifted in early December,” write Douglas and Sugden, “the new variant went national.” But the U.K. never really “lifted” the lockdown. They just eased it modestly — in lower-risk locations- from Dec. 2 to Jan 4 (“until at least mid-February”). And the authors of this story neglect to tell readers what happened to COVID-19 infections and deaths recently about three months after the new variant “went national.”

What happened is that the 7‑day average of new cases has fallen by a third- from 14,899 on December 1 to 10,089 on February 26, according to The New York Times. COVID-19 is not spreading faster with the new variant. On the contrary, COVID-19 is spreading much more slowly than in early December, when this Wall Street Journal story marked the start of a supposedly frightening new national variant.

Such inconvenient facts would not fit very well in this otherwise exciting story about new variants of COVID-19, which experts wrongly predicted would make infections grow more rapidly.

New York Governor Andrew Cuomo is in hot water. His handling of nursing homes during the pandemic was tragically flawed and his attempted coverup of the blunders has heightened the scandal. The governor has also been accused of sexual harassment by a former aide.

I reported on the governor’s policies in Cato’s fiscal report card. Cuomo received the worst grade of “F” in the 2020 report for his large tax and spending increases.

Interestingly, the essence of Cuomo’s political approach was captured in a 2009 essay by former Cato analyst Tad DeHaven. He presciently described character flaws that recent scandals have drawn attention to. DeHaven’s comments reprinted below were in an essay about failures at the federal Department of Housing and Urban Development (HUD). Cuomo joined HUD in 1993, became secretary in 1997, and left office in 2001.

DeHaven portrays Cuomo as acutely interested in self-publicity, a bit of a back-stabber, and very hostile to criticism. It is true that many politicians exhibit those tendencies, and it also true that other HUD secretaries have been awful, such as Reagan’s secretary Sam Pierce. But the general pattern of Cuomo’s recent behaviors as governor were strikingly apparent back in the 1990s, as DeHaven discussed:

Andrew Cuomo joined the Clinton administration as an assistant secretary of HUD in 1993. He replaced [Henry] Cisneros as secretary in 1997, where he remained until the end of Clinton’s second term. Cuomo followed the same approach as his predecessor—seeking personal publicity while pandering to special interest groups by encouraging those who were not suited for home ownership to nonetheless move into homes.

Cuomo began cultivating his self-promotion at HUD as assistant secretary. In 1993, he organized a lavish conference costing taxpayers $235,360 to announce a new anti-poverty program, and he flooded attendees with sloganeered shopping bags, HUD buttons, and glossy brochures. One observer called it a “rah-rah rally for Andrew Cuomo.” Cuomo doubled the number of top-level staff members under him, and in one of his years as assistant secretary, he spent almost a $1 million on travel. According to the Wall Street Journal, the lavish spending on “image-making … strained HUD budgets so much that officials have devised plans to pay some bills by diverting money from projects intended to help people.”

Being assistant secretary was a good job, but Cuomo wanted the top spot. He got his chance when Cisneros announced his intention to resign shortly after Clinton was reelected in 1996. Seattle Mayor Norm Rice was thought to be Clinton’s first choice to replace Cisneros, but he was knocked out when HUD launched an investigation into his possible misuse of a federal loan. The investigation, which was launched a week after the 1996 election, had been approved by Cuomo’s office. The result was that Clinton went with Cuomo as secretary. Rice was later cleared, but the timing of the investigation and a leak to the press suggested involvement by Cuomo.

A HUD employee characterized Cuomo’s tenure “as all show and very self-promoting. He always was a politician.” In 2000, Cuomo’s HUD administration issued 302 press releases in 331 working days. Most of these releases contained headlines touting Cuomo, not the president. In a move reminiscent of Samuel Pierce, Cuomo spent $900,000 in taxpayer money on a brochure detailing his own accomplishments.

When it became apparent Cuomo would run for governor of New York, he made 25 official HUD visits to the state—21 more than any other state. In his final year as HUD secretary, he also announced $170 million in HUD money for economic development along the Erie Canal. Another former HUD employee noted, “It was about me, me, me, me. If he didn’t get a headline out of it, he didn’t want to hear about it.”

One thing Cuomo didn’t like to see were criticisms of HUD by the department’s inspector general, Susan Gaffney. Gaffney, who had a very good reputation, was subject to a smear campaign by Cuomo’s staff that aimed to undermine her and force her out. Cuomo was reported to be angry with Gaffney over some of her audit reports that reflected poorly on him. One audit suggested that HUD’s determination of which cities were designated “empowerment zones” under a billion-dollar program were subject to political manipulation. An aide to Cuomo told a reporter, “That was his baby—when the audit report came out, he went crazy.” Another report by Gaffney’s office found widespread mismanagement in billions of dollars of HUD contracts.

Like Cisneros, Cuomo’s main policy legacy was to promote federal subsidies and regulations that distorted housing markets, particularly in the direction of weakening safeguards against excessive risk. For example, Cuomo successfully advocated that Congress raise the ceiling on Federal Housing Administration–insured mortgages while lowering down-payment requirements. Those moves help set the stage for higher FHA-insured mortgage default rates in later years.

Cuomo also supported efforts to have home sellers funnel money to nonprofit groups to help pay for buyers’ down payments and closing costs. These “down payment assistance” loans ended up having default rates twice that of standard FHA-insured mortgages. Cuomo portrayed his efforts as helping to increase homeownership rates for minorities, but he also had an interest in not upsetting mortgage industry officials who would later help finance his gubernatorial campaign. He also worked hard to receive support from leftist housing advocate groups, such as ACORN.

During the Cuomo years, mortgage industry officials and housing advocates wanted Fannie Mae and Freddie Mac to purchase higher volumes of riskier loans that were offered to less credit-worthy borrowers. Cuomo’s HUD continued to pressure Fannie and Freddie to increase the portion of their portfolios consisting of loans to moderate-income borrowers. Cuomo applied pressure by having HUD publicly “investigate” whether Fannie and Freddie were sufficiently in compliance with government fair-lending standards designed to prevent discrimination.

We know now that Fannie and Freddie’s expansion into low-quality mortgages was a huge mistake. A decade ago, numerous financial analysts saw the problems coming, but policymakers ignored their concerns and did not change their policy course. Here is a prescient observation by a New York Times reporter in 1999: “In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s.”

Unfortunately, the housing and financial debacles of 2008 and 2009 were far larger than the savings and loan mess. But with Cuomo, fiscally prudent policies took a backseat to his political aspirations.

The essay at Down​siz​ing​Gov​ern​ment​.org has the full cites for DeHaven’s facts and quotes.

Over that past couple of months, we have seen an uptick in permanent private school closures that are at least partially due to COVID-19 – 9 in the last 60 days, after just 3 in all of September through December – and we are likely to see many more soon, as schools take stock of enrollment numbers for next year and decide if they will be viable. And who do these closing schools tend to serve? Almost certainly “regular,” or even low-income, families.

From the outset of our tracking we have published the average tuition of closing schools, which currently sits at $7,032. That strongly indicates that these are not typically schools serving, say, the children of presidents. To put $7,032 in context, we spend more than double that – $15,424 per student – in public schools, and according to Private School Review, the average tuition for private schools is $11,173.

To burrow a bit deeper into the character of closing schools, we took a look at the median family income in the census tract for each school on our tracker. Again, the evidence points to the schools in trouble being those that serve ordinary people, not the rich. The median, median family income for the census tracts of schools on our tracker is $75,117. In 2019, the median family income nationally was $88,149.

The private schools on our list are – or were – typically in lower-income communities. They are also typically Roman Catholic. Not surprisingly, as we see on the chart above, which reports average tract median incomes by type of school, Catholic schools tend to skew toward lower-income areas. (Note, however, that other than independent schools, we have very few non-Catholic institutions on the tracker).

What does this mean for public policy?

First, while it should not be the concern of the federal government to save private schools, the COVID “relief” Washington is contemplating would put them at an even greater competitive disadvantage than they are already in, since they have to charge tuition and public schools are “free.” By our estimates of enacted and potential aid, public schools would receive $3,945 in assistance per-pupil, and private schools only about $2,276.

If there is to be more federal aid, it should simply follow students.

At state and local levels we need to expand school choice programs. Currently 26 states have legislation to do that, but the road is always rocky as teacher unions, school board associations, and other establishment interests use their large numbers and easy ability to organize to fight choice. On the flip side, the pandemic has made the need for choice increasingly obvious, even among people who have generally been happy with the public schools.

The private schools we are losing are not rich. They are disproportionately low-cost, and in lower-income areas. To help them, policymakers do not need to do something extraordinary. They just need to treat the families that want to use them equally.

Politico reports that President Biden will sign an executive order today to review the global supply chains for medical goods and other “key industries,” in order “to determine whether U.S. firms in these sectors are relying too much on foreign suppliers, particularly those in China.” As I explain in a new Pandemics and Policy paper (coincidentally) out today, the federal government should not embrace economic nationalism to “fix” global supply chains that wobbled during the pandemic because–

• The nation’s overall productive capacity and its medical goods industries are generally healthy, and domestic industries and their supply chains adapted during the pandemic to meet extraordinary demand. This is particularly the case for pharmaceutical supply chains, which proved — according to the U.S. International Trade Commission’s thorough review in December — remarkably “resilient.”

• Past U.S. government attempts to re‐​shore “essential” supply chains have proven costly and unsuccessful, while those implemented during the current pandemic have produced significant distortions (e.g., a ventilator glut), public embarrassment, and subsidies to politically-connected companies that are at best tangentially-related to COVID-19.

• Global integration and economic openness can bolster U.S. resiliency by increasing economic growth, mitigating the impact of domestic shocks, and maximizing flexibility. As we have seen during the pandemic with respect to trucks and semiconductors, moreover, re-nationalizing supply chains can actually amplify manufacturers’ pain when economic shocks (pandemics, natural disasters, etc.) are within U.S. borders.

• There are numerous market‐​oriented policies that would generally benefit the U.S. economy while also supporting the industrial base and national resiliency, including: unilateral trade and investment liberalization; entering new economic agreements with U.S. allies, particularly those that specialize in medical goods; eliminating nationalist restrictions on government stockpiles and opposing any new ones; expanding high‐​skilled immigration; and eliminating “never needed” regulations that were suspended during the pandemic to boost domestic production, investment, and adjustment.

Fortunately, Politico quotes a senior Biden administration official as saying that “[r]esilient supply chains are not the same thing as all products being made in America. That’s not our intention here.” Let’s certainly hope not, as the facts above argue strongly against using protectionism and subsidies to “renationalize” allegedly vulnerable global supply chains.

More broadly, the White House’s medical supply chain review should resist the temptation to proposes “fixes” to supply chain problems that — due to previous government interventions and the independent efforts of numerous American companies and foreign multinationals to expand domestic operations, enter the U.S. medical goods market, or adjust their supply chains in response to the pandemic — might no longer exist. Indeed, by the time U.S. policymakers decide to intervene further in the market, it will look much different than the one on which they based their decision and will likely change again by the time any government‐​supported production comes online.

A common medical principle therefore applies to White House’s own medical supply chain review: “First, do no harm.”

(You can read the entire paper here.)