Welcome to this edition of the Mueller Report!
The weather is finally breaking here in the NYC area – that is, we are not supposed to see any highs above 80 until next year. This is cause for much rejoicing among the Mueller clan!
This week I share some reflections on why some (often influential) parts of society have seemingly turned into hypochondriacs overnight. Before launching into that, let me share some other brief thoughts.
Finance
The first round of put contracts I wrote (sold) expired and none were exercised. So I received a couple hundred dollars in exchange for setting aside ~$15,000 that could have been used to buy the stocks I wrote puts on. Perhaps the greatest attraction of writing options (puts or calls) is increasing the velocity or use of my money or my stock holdings. Even though I might only receive 1% in the price of a contract relative to how much money gets locked up in case the contract is exercised, I could hypothetically write this contract 15 times or so during the year – which turns the 1% return into a 15% (assuming it is never exercised).
There is, of course, the danger that the price of the stock I write a put option on falls significantly and then I have to buy it at above its market prices (the agreed-upon price called the “strike price”). But then my plan is to turn around, after buying the shares, and writing call option contracts on my new holdings. I haven’t had to do that yet but am expecting to at some point.
This is not investment advice – you should make sure you understand how option contracts work, and the risks, before venturing into this field. I also have a pesky voice in the back of my mind based on my years of economic training saying, “There is no such thing as a free lunch” and “There are not $10 bills lying on the ground for a reason.” I don’t know what the catch of writing options is – that is to say, why is there a pretty high return to writing them? My initial thoughts are 1) you give up the use of a sizeable amount of money for the duration of the contract and 2) you are providing a kind of service in terms of taking on the risk of the stock price falling a lot. I’m selling a kind of insurance to those who would like to have insurance against large losses on their stockholdings…
Podcasts
I spoke with Josh Herring this summer about the basic contours of MMT this summer. The episode just went live recently and you can listen to it here.
Also, there is an interesting podcast from EconTalk where Russ Roberts interviews Jason Riley about the state of race relations in the U. S. Riley wrote a biography of Thomas Sowell recently and has a lot of important observations and data to keep in mind in conversations about BLM, police violence, etc.
The Paranoia of the Elite
One benefit of living in the northeast is being able to rub shoulders with a lot of different folks. I have a front row seat to observe how many of the elite (highly educated, affluent, influential, etc.) live and think. I’ve begun telling people lately:
The paranoia of the elite knows no bounds.
I have been struck by how paranoid and fearful so many of the highly educated and affluent in society are – especially how afraid they are of Covid-19.
Examples abound, but let me mention a couple. NYU requires 100% vaccination of all faculty, staff, and students to step foot on campus. But that’s not all, they also require everyone to wear masks at all times while on campus. So 100% vaccination, primarily young people, and masking at all times. They are far from the only university with such policies – some are even stricter!
NYC has created a citywide vaccine requirement. Anyone who is not vaccinated is not allowed in most indoor public places from hotels and restaurants to museums and coffee shops.
President Biden recently mandated that all companies with over 100 employees must have all their employees vaccinated.
I have an acquaintance, a libertarian-leaning professor, who wrote earlier this year about his first (accidental) physical contact with another human being besides his wife and son in over 9 months…Now that is paranoia. What’s remarkable is that he is certainly not alone in this extreme isolation to avoid catching Covid-19. And if you look around the world, you find that the U. S. tends to be far more open than most other developed countries.
So how did we get here – with most in the media, in the medical profession, many politicians, and most government officials implementing sweeping restrictions based around Covid-19? While the speed and scope of these policies seems remarkable and breath-taking, they are actually not all that surprising given several trends over the past several decades, particularly among more highly educated elites and intellectuals.
Reason #1 – Safetyism and helicopter parenting
Lenore Skenazy and Jonathan Haidt have both written on these topics at some length. They argue that parents have become increasingly focused on keeping their children free, not only of catastrophic physical harm, but even from most kinds of minor harm like skinning elbows and knees to getting other cuts, scrapes, and bruises. They have also become increasingly concerned about protecting their children from other forms of physical harm or danger such as: allergies, sickness, bullying, kidnapping, etc.
This preoccupation with physical safety-ism has been accompanied by increasing focus on mental and emotional safety-ism too. Children should be protected from the insults, criticisms, and disappointments that inevitably come with living with others. Think about the move to give all children trophies for participating in a game, or refusing to keep score at sports games altogether. The anti-bullying movement is another example of this trend.
I do not mean to suggest that bullying, criticism, failure, or physical harm are always trivial or that they should be sought out. But safety-ism has led to parenting styles that can increasingly be described as “helicopter” parenting. The term illustrates how parents increasingly hover over their children’s lives like a helicopter, ready to drop in and rescue them at a moment’s notice – whether from physical harm that could occur from climbing trees or rocks, learning how to use tools, etc.; or from other potential emotional or mental “harms” like criticism, insults, and failure. Another analogy used is that of “snowplow” parenting – the term evoking the image of the parent going in front of their child and clearing all obstacles – whether grades, disciplinary consequences, or other hindrances to (primarily) academic and economic success.
In the past, children would spend much more of their time in unsupervised play with others. During these times they would often fight with one another, get physical injuries, suffer disappointment, criticism, or failure, etc. But they also learned to solve their own problems. They learned how to navigate relationships even when things are tough. In short, they learned how to be resilient.
Safetyism and helicopter parenting inadvertently reduce children’s resiliency.
Reason #2 – Careerism and Performance
This is especially a problem among more affluent and educated people. Increasingly, life success is equated with material and career success. And those are closely connected to getting into particular industries. And getting into those industries is often greatly helped by one’s college pedigree and network. Students (and parents) compete fiercely to get into top Ivy league schools so that they can be “successful.”
Bill Deresiewicz, in Excellent Sheep, describes this relentless demand for children to perform by their parents. Not only does the demand create large amounts of stress, worry, and anxiety – it also produces guilt in those who do not succeed and insecurity in those who do.
Why insecurity for those who succeed? Because they connect approval, contentment, and happiness with performance and success. It is not enough to simply accomplish something. That may feel good after a particular success but sooner or later (often sooner), students feel like they need to succeed again in order to maintain the approval of their parents and their peers, or to feel a sense of self-worth. And so they find themselves running on a treadmill with bursts of adrenaline or dopamine depending on how they performed recently – but they are always running; and afraid of falling.
Reason #3 – Exposure to bad news
Neil Postman observed years ago in Amusing Ourselves to Death that changes in how people consumed news and information would significantly impact how they saw the world, and therefore themselves. And that impact would generally be quite destructive. He worried that the shift of our news media from print to images would reduce our ability to process complexity or to consider what is happening dispassionately and thoughtfully. Social media magnifies this problem. I include here the preface of Postman’s book, which I also keep on my office door on campus:
We were keeping our eye on 1984. When the year came and the prophecy didn't, thoughtful Americans sang softly in praise of themselves. The roots of liberal democracy had held. Wherever else the terror had happened, we, at least, had not been visited by Orwellian nightmares.
But we had forgotten that alongside Orwell's dark vision, there was another - slightly older, slightly less well known, equally chilling: Aldous Huxley's Brave New World. Contrary to common belief even among the educated, Huxley and Orwell did not prophesy the same thing. Orwell warns that we will be overcome by an externally imposed oppression. But in Huxley's vision, no Big Brother is required to deprive people of their autonomy, maturity and history. As he saw it, people will come to love their oppression, to adore the technologies that undo their capacities to think.
What Orwell feared were those who would ban books. What Huxley feared was that there would be no reason to ban a book, for there would be no one who wanted to read one. Orwell feared those who would deprive us of information. Huxley feared those who would give us so much that we would be reduced to passivity and egoism. Orwell feared that the truth would be concealed from us. Huxley feared the truth would be drowned in a sea of irrelevance. Orwell feared we would become a captive culture. Huxley feared we would become a trivial culture, preoccupied with some equivalent of the feelies, the orgy porgy, and the centrifugal bumblepuppy. As Huxley remarked in Brave New World Revisited, the civil libertarians and rationalists who are ever on the alert to oppose tyranny "failed to take into account man's almost infinite appetite for distractions." In 1984, Orwell added, people are controlled by inflicting pain. In Brave New World, they are controlled by inflicting pleasure. In short, Orwell feared that what we fear will ruin us. Huxley feared that what we desire will ruin us.
This book is about the possibility that Huxley, not Orwell, was right.
Increasingly people’s attention is directed by algorithms and social networks. This contributes to increasing emotional, rather than logical, reasoning. People are rightly upset over the videos of police killing minorities. But they rarely think about how these instances make up a small percentage of minorities murdered every year (on the scale of 1-3 %).
Or we see regular tallies and images of people dying from Covid-19. The pandemic is a tragedy, and something to be taken seriously no doubt. But the concern raised by Postman and others is that people are increasingly unable to weigh various options logically. They put tremendous weight on a few particular issues or outcomes because of the emotional presentation. Stalin was right when he said, “One death is a tragedy. A million deaths is a statistic.”
Regular exposure to any and every tragedy, from school shootings to massive hurricanes and rainstorms, to outbreaks of Covid-19 and increasingly full hospitals understandably feeds paranoia and fear – even if 90% or even 99% of everything you see occurs somewhere else to someone else.
Reason #4 – Godless fear of death
As more people doubt God’s existence and goodness; that is, as society becomes increasingly secular, death becomes the greatest evil we face. It represents the end of everything we know. And so most people are really, really afraid of dying. Part of this stems from the fact that death is such a small part of our experience given the amazing improvements in our standard of living. Most people live 70+ years in wealthy countries. Beyond that, the elderly in the U. S. are increasingly separated from the rest of the society – living in retirement communities or nursing homes.
Reason #5 – The Fatal Conceit that we can control our environment
Behind much of what I believe to be an unreasonable response to Covid-19 is the belief that we can control the virus and how many people it kills. Whether through social distancing, shutting down businesses, increasing the vaccination rate, getting booster shots, etc., there is a belief that if we just do the right things as a society we can control the virus.
Hayek wrote a book called The Fatal Conceit talking about people’s tendency to believe that they can control the economy. The lessons from that book apply to today’s economy and even more broadly to the rest of our society.
Ramifications & Challenges
Part of the political and social division in the U. S. is driven by growing differences between classes of people based upon education, occupation, and to a lesser degree, geography. During the shutdowns last year, most of the people who implemented the policies shuttering businesses were conveniently able to work from their home office or basement or bedroom. They were not putting their jobs or livelihoods on hold.
Economists and political scientists, starting with Tiebout (maybe there were some earlier), have long observed that people can vote with their feet. Over time, they move away from cities with poor public services or high crime. They move from states with high taxes to states with lower taxes (this is why Florida surpassed New York in its total population a number of years ago). Voting with one’s feet is often costly and takes time. We can usually only see the effect over longer periods of time. And we also know, that to get up and move, is far from costless. If people are moving, especially across state lines, they must see a significant benefit.
What can we learn about Covid responses from people voting with their feet? We learn that more restrictive Covid responses either 1) do little good in terms of increasing people’s safety and/or 2) people generally care much less about being safer than about being free.
Why do I conclude that?
Because we have seen dramatic numbers of people voting with their feet. And overwhelming, they are moving from more restrictive states, like CA and NY, to less restrictive states like TX and FL. Do you anyone, anyone, who moved from a less restrictive state to a more restrictive state because they felt safer in the more restrictive state? Anecdotally, I don’t – I’m not sure I’ve even heard people voice that possibility. Many thousands of people are more or less fleeing states with overbearing responses to Covid-19, not vice versa.
We are embarking on what of the greatest social experiments in history. Disrupting the normal habits and routines of millions of people for over a year. At the same time, the federal government has embarked on an experiment testing the limits of reality. What happens if we pay people to not work? What happens if we give out hundreds of billions of dollars of assistance to businesses, or to landlords, or to governments? What if we launch the most expansive social spending program in history?
But there are many effects from the response to Covid-19 that will manifest themselves for years. Loss of schooling, loss of work, families relocating, greater relational and social distance between people. And wounds from bitter conflict and disagreement that may never fully heal.
What do we do with all this? Ultimately, I believe the first step is recognizing the presence of many of these factors and problems in our own lives. Do we have a propensity to anxiety or a drive to perform in order to be content? How emotional do we allow ourselves to be as we read about vaccine mandates, or mask policy, or school shootings, or anything else? And then we have to ask the question: how can I encourage others to recognize what is going on and encourage them to resist further social and political movements to safetyism, paranoia, and ultimately futile attempts at trying to control our environment?
These are a few of my thoughts on our moment - I make no claim to special revelation on these issues or imagine that this is somehow the final word. But I hope you find some of these observations interesting and provocative, if not compelling.
Talk to you next week!
I enjoyed The Paranoia of the Elite. A few observations and/or comments.
The line, "failed to take into account man's almost infinite appetite for distractions" reminded me of The Pilgrim's Progress when Bunyan describes Vanity Fair as a place where "there is constant, round-the-clock entertainment." Even though humanity has always had this capacity since the fall, modern society has definitely raised the bar so to speak (e.g. internet, 24 hour news, sports, shopping, pornography, video games, etc., etc.).
"This contributes to increasing emotional, rather than logical, reasoning." This certainly resonates with me. Unfortunately, we eliminated the requirement to take and pass a Logic class in high school many years ago. We seemed to have replaced it with measuring all actions, activities, and perspective on "feelings." [Comment. A number of years ago the UK mandated all written grading or mark-up on papers must be in purple "only." No red ink, green ink, blue ink, etc. since it could have a negative effect on a students self-perception (i.e. feelings).]
You also noted, "Godless fear of death." Plus, I appreciate you mentioning Hayek's book, The Fatal Conceit. This drives to the heart of the problem which is an individual's worldview. There is also a good book by R.C. Sproul, "Everyone's A Theologian." I recommend it if you are interested.
Thanks again for writing and publishing The Mueller Report!
Shalom & Hesed.
-- Duane
Huxley is correct; Orwell is correct. The great dangers of an authoritarian society are Orwellian, like China. Consider how they’ve banned extensive video gaming activity and also encourage copious amounts of education. Yet their internet is closed and they lack freedom of speech.
On the other hand, the great dangers of a liberal society are Huxley-ian, like the USA. Just saw TikTok hit 1B monthly users this week as well. On average, an individual spends 24.5 hours on TikTok/week… we are consuming ourselves with bread (obesity) and games (entertainment).
Appreciate the comments around Paranoia of the Elite as well. It never ceases to amaze me how afraid people are of Covid. In fact, I see massive confusion around risk-taking as it pertains to the Godless fear of death. Covid-19 isn’t abnormally dangerous for a majority of people. Driving a car is dangerous for all people. Control over your health while driving is a fatal conceit - you have zero control over other drivers. What I mean is other people’s choices affect your risk when driving, just as other people’s choices around physical health affect yours. What’s the difference here? Why are people making costly decisions to protect themselves from Covid-19 while simultaneously being unwilling to sacrifice driving for similar safeties?
What I see personally is a complete twisting of perception. If you talk about covid-19 deaths and infections 24/7, people will think it’s really dangerous. If you talk about car accidents 24/7, people will think that’s really dangerous. That’s one major reason people’s risk analysis is cockamamie.