The Editorial Board of the Wall Street Journal reports how Lina Khan – a darling of the Biden administration and expressly admired by J.D. Vance – used her powers as an antitrust enforcer to kill an innovative American company (with the final lethal stroke perhaps being delivered by Trump’s tariffs). Two slices:
The maker of the Roomba vacuum cleaner, iRobot, filed for bankruptcy Sunday after 35 years in business. An obituary might describe it as a victim of government assassination. Overzealous antitrust cops egged on by Sen. Elizabeth Warren stuck in the knife. President Trump may have dealt the death blow with his tariffs.
We explained at the time how Ms. Warren and progressives in the Biden Administration thwarted Amazon’s attempt to buy iRobot in 2022. They claimed the $1.7 billion acquisition would unfairly augment Amazon’s lead in robotics and home devices. They also said the Roomba would enable Amazon to hoover up data and spy on Americans.
…..
In January 2024, Amazon and iRobot called off the deal amid opposition from Ms. Khan’s FTC and Europe’s antitrust regulators. The Biden FTC issued a statement saying it was “pleased.” Amazon CEO Andy Jassy quipped that regulators trusted Chinese firms “more than they do Amazon.” Less pleased are the U.S. workers who subsequently lost their jobs.
After the deal collapsed, iRobot said it would cut 31% of its workforce and send overseas “non-core engineering functions to lower-cost regions.” Even then, the Bedford, Mass.-based company continued to struggle against Chinese competitors. Amazon’s backing might have helped it innovate into new robotics fields that Chinese firms hadn’t penetrated.
Mr. Trump’s tariffs may have been the fatal punishment. The company had shifted production to Vietnam to minimize its trade exposure to China. It was smacked all the same by Mr. Trump’s 46% Liberation Day tariffs on Vietnam. Mr. Trump later cut the tariffs to 20% in a deal with Vietnam, but iRobot said the trade uncertainty made it hard to operate.
The ironic culmination to the story: iRobot will now be taken over by its Chinese contract manufacturer Picea, which also makes competing household devices. By scuttling the Amazon acquisition, antitrust regulators have strengthened Chinese robotic competitors and driven jobs overseas. Will Ms. Khan and Ms. Warren take a bow? Probably not.
Politicians worry about robots and artificial intelligence killing jobs. The far bigger threat is clumsy government interventions that make a mess out of markets.
Reacting to Trump’s prime-time national address on Wednesday, National Review‘s Noah Rothman is understandably mystified by Trump’s mindless attachment to tariffs. A slice:
Indeed, Trump attributed his economic record in its entirety to trade barriers — not that voters need much convincing there. “Much of this success has been accomplished by tariffs,” Trump said, “My favorite word, tariffs, which for many decades have been used successfully by other countries against us. But not anymore.”
That confidence was betrayed by the president’s gimmicky attempt to establish an emotional connection between the public and trade protectionism — a bond Trump himself maintains with religious conviction.
“Because of tariffs,” he said, “tonight I am also proud to announce that more than 1,450,000 service members will receive a special warrior dividend before Christmas” to the tune of precisely $1,776 in honor of next year’s semiquincentennial. “And the checks are already on the way,” Trump smiled, “nobody understood that one until about 30 minutes ago.”
This is the Republican equivalent of raiding the treasury for the benefit of teachers, for example — a deserving demographic, the plight of whom on an individual level tugs at your heartstrings. Maybe you object to the underlying economic policies that render that sop necessary as a political maneuver, but you can’t argue with the results — not unless you want to be demagogued into next week for your callous disregard for the selfless Americans who make this country work.
Trump is wise to enlist the public in his foremost economic project. He should have done that in April. It’s too late now. The effects of tariffs are today thoroughly known and equally resented. Trump has scaled his trade barriers back from their maximalist iteration, but quietly — never letting the public know that the policies they despise are in retreat.
Nerdy – but Brian Albrecht here offers an insightful and important explanation of why sound price theory instructs us to be wary of the headline “China Shock” numbers. Here’s his conclusion:
Markets connect people through prices. That’s what makes them so good at coordinating activity. It’s also what makes them so hard to study in pieces.
GMU Econ alum David Hebert explores the cronyist Jones Act.
Phil Gramm and John Early make clear that “something is profoundly wrong with the U.S. welfare system—a problem that runs far deeper and is more dangerous than the shocking fraud in Minnesota that has been making headlines.” A slice:
Across the past half-century, America has seen what in any other country would be considered a golden age, in which lower-income households have made incredible progress. Despite the end of our postwar economic dominance around 1975, the country’s real per-capita gross domestic product grew by 142% from 1974 to 2024. More than two-thirds of U.S. households have inflation-adjusted incomes today that would have put them in the top one-fifth of households in 1967. Sixty-two percent of the children who grew up in the poorest fifth of all households in the ’70s and ’80s worked their way up to a higher income bracket as adults, some all the way to the top quintile.
Yet even as our economy has experienced broad-based growth, real federal welfare spending has soared by 765%, more than twice as fast as total federal spending, and now costs $1.4 trillion annually. Were that money simply doled out evenly to the 19.8 million families the government defines as poor, each household would receive more than $70,000 a year.
The source of this dramatic mismatch is a fraud built into how various programs determine welfare eligibility: The government doesn’t count any refundable tax credits or benefits that aren’t paid in cash as income to the recipients.
Some claim this is appropriate because the beneficiaries aren’t free to spend noncash benefits on whatever they like. But that is a specious argument, because money is fungible. Receiving Medicaid, for example, frees up cash that would otherwise be spent on healthcare, allowing the recipients to spend the newly freed cash on other things. Noncash benefits aren’t in the end that different from income—except that salaries are taxed while government benefits aren’t. And individual welfare programs often don’t even count benefits paid in cash as income for the purpose of gauging eligibility.
David French takes an accurate shot at trying to explain why MAGA people mistakenly believe that, pre-Trump, America was in a death spiral. A slice:
Americans live longer, enjoy higher median wages, live in larger and more luxurious homes, and enjoy more civil liberties and greater access to justice than even the recent past. The starter homes of the 1950s — tiny places that often lacked central air and other modern utilities — would be considered poverty-level accommodations now.
Violent crime is much lower than in decades past, the divorce rate has decreased from its highs in the early 1980s, and the abortion rate (despite recent increases) is far below its early 1980s peaks.
But even as I type these words, I realize their inadequacy. You cannot fact-check a person out of a feeling, and without question, the people I talked to felt — deep in their bones — that something had gone fundamentally wrong in the United States of America and in their lives. And a dry recitation of contrary facts not only did nothing to assuage this feeling of fear and loss; it was positively enraging — cringe, in a word.
To use an example wielded against me time and again, “How can you possibly say that America is better than it’s been when drag queens are reading to kids in public libraries?”
To that I say, as my friend Kevin Williamson put it in a recent piece addressing the new right’s nostalgia, “More drag queens, sure, but fewer slaves — the moral trajectory of Western civilization is not entirely in the direction of failure, you know.”
One disadvantage of your teenage and early adult years is that you tend to experience adversity without perspective. It’s hard to place your own experience in a larger context when you haven’t yet experienced that context.
And that’s exactly where we — the older generations — have failed. When I see young people radicalizing on the left and right, including through their greater tolerance for political violence, I see the fruit of our own intolerance and polarization.
My intrepid Mercatus Center colleague, Veronique de Rugy, is appalled by the U.S. government’s penchant for taxing the poor in order to give to the rich. A slice:
American heads of households younger than 35 now have a median net worth of about $39,000 and an average net worth of more than $183,000. Those over 75 have a median net worth of roughly $335,000 and an average net worth exceeding $1.6 million. As a group, today’s seniors are the wealthiest we’ve ever had.
Many own their homes outright in markets younger families cannot afford to enter. Seniors enjoy higher rates of stock ownership and have benefited enormously from decades of rising asset values. Meanwhile, younger Americans face soaring housing costs, student loan debt, delayed family formation, and a labor market shaped by slower growth and higher federal indebtedness.
Some of this reflects natural wealth accumulation over time, and there is nothing wrong with that. But why does the modern welfare state magnify the disparity? As [Russ] Green explains, “retired millionaires have become the greatest recipients of government aid,” as Social Security can redistribute up to $60,000 a year to an individual and $117,000 to a household. “Meanwhile,” Green notes, “Medicare programs are paying for golf balls, greens fees, social club memberships, horseback riding lessons, and pet food.”
Younger Americans are also on the hook for about $73 trillion in unfunded obligations projected over the next 75 years, making now the time to act. Some defenders of the status quo argue that higher taxes will fix the problem, but it would again fall on younger earners to continue redistributing benefits to the same affluent seniors, worsening the generational imbalance. The problem is not a lack of revenue; it’s a benefit structure that ignores modern demographics, modern wealth patterns, and basic fairness. Paying less to seniors who don’t need the money is the only fair reform to this dilemma.
Every time someone points these facts out, defenders respond reflexively: “But seniors paid in. They earned it.” No, not all of it. Not in any meaningful, actuarial sense.
Matt Yglesias urges his fellow Americans on the political left to quit their unwarranted hostility to oil and gas. A slice:
This won’t be popular with everyone on the left. But President Claudia Sheinbaum in Mexico, Prime Minister Mark Carney in Canada and the labor parties of Norway and Australia have done it. It’s not just about votes; it’s also a realistic path toward a cleaner environment.
Start with the politics. It wasn’t that long ago — in 2012, for Barack Obama’s re-election — that the Democratic Party’s national platform argued that “we can move towards a sustainable energy-independent future if we harness all of America’s great natural resources.”
Since then, the party has pivoted toward hostility to oil and gas. In a 2020 debate with Mr. Trump, Joe Biden vowed to focus on a green economy and “transition from the oil industry,” and sought to halt new oil and gas leasing early in his term (though ultimately the industry, after defeating the leasing pause in court, thrived). The animus is often invisible to participants in factional arguments because so many of them are based in coastal metropolises that lack major natural resource industries. But from the standpoint of formerly blue or purple states like Pennsylvania and Ohio — or a place like Texas, where Democrats were once optimistic that a growing Hispanic population would deliver them a vast trove of voters — the change is notable.
Apart from the economic damage that Mr. Trump’s unilateral actions are generating, they have already dealt a major blow to the fabric of international cooperation and the rule of law that had been painstakingly developed over the postwar period. His actions have violated the provisions of international institutions and agreements, and bilateral treaties, as well as U.S. domestic law. They have caused financial turmoil, strained relations with U.S. allies, and have seriously damaged the international reputation of the United States.
The truth is that industrial policy will lead to a government-planned economy, which – as history has shown repeatedly – is doomed to fail because it seeks to impose the will of a few on everyone else. It rejects the benefits of economic freedom and the free-enterprise system. Industrial policy does not merely redirect the market economy, it takes it over, even if in small steps. Government coercion to achieve the preferred economic outcomes of those in power has demonstrably and repeatedly failed to life the common people’s fortunes. Industrial policy is not a recipe for improving people’s lives; it is a way to impoverish them.
Truth withers when freedom dies, however righteous the authority that kills it; and free individualism uninformed by moral value rots at its core and soon surrenders to tyranny.
Thank goodness we now have Washington elites saving us from the freedom to choose to purchase goods that they (in all the glory of their bureaucratic omniscience) know to be bad for us.
