GMU Econ alum Julia Cartwright, writing in the Washington Post, explains that
the bill Congress passed to fix the alleged problem — which is currently waiting for President Donald Trump’s signature — says more about Washington’s dysfunction than about what ails the American housing market….
The Road Act, for all its bipartisan support, does not meaningfully address any of these supply constraints. Fixing these issues would require Congress to take on local planning boards that value neighborhood character above affordability, and shorten permitting timelines that can stretch for years. It would also need to reckon with the tariffs on lumber and steel that raise construction costs before a single wall goes up.
These are the forces keeping homes out of reach for Americans, and the Road Act leaves them largely intact. Homeownership will become more attainable when policymakers focus on removing barriers to new construction. Searching for villains won’t fix the problem.
Brian Gross’s letter in today’s Wall Street Journal is excellent:
Scott Bessent’s five principles of economic statecraft in his op-ed “Hamilton Inspires Trump’s Economic Statecraft” (June 24) deserve serious engagement. Yet two of them cannot simultaneously be true.
His first principle holds that economic security requires reducing trade imbalances. His fourth celebrates dollar primacy as a pillar of American power. But the world’s willingness to hold dollars is precisely what allows the U.S. to run persistent trade deficits. Trade imbalances are not evidence of American weakness; they are one consequence of issuing the world’s reserve currency. What Mr. Bessent frames as a vulnerability is the price of an extraordinary privilege. Treating it as a problem to be solved risks undermining one of the principal advantages of American financial leadership.
On Hamilton, the secretary is more selective than the record warrants. Hamilton wasn’t arguing for retreat from global commerce. He was arguing that the U.S. needed to become credible enough to engage in it as an equal. He warned that the want of central regulation meant that “no nation acquainted with the nature of our political association would be unwise enough to enter into stipulations with the United States.” His concern wasn’t exploitation by trading partners. It was American unreliability.
That concern bears directly on Mr. Bessent’s third principle: that America must write the rules of the next economy. That requires convincing partners that the rules will hold. You can’t simultaneously signal that existing commitments are conditional and expect others to bind themselves to new ones. The country that tears up frameworks doesn’t get to author the replacement. It simply loses the pen.
Hamilton was writing for a small agrarian republic struggling to establish its credibility in a world dominated by British industry. The U.S. is now the issuer of the world’s reserve currency, the center of the global financial system, and the principal architect of the international economic order. The challenge isn’t whether America can compete. It is whether it can distinguish real vulnerabilities from the privileges it mistakes for burdens.
As GMU Econ alum Dan Mitchell writes, Trump at least can be credited with prompting more folks on the left to look favorably upon free trade. A slice:
[S]upport for free trade on the left didn’t just increase, it more than doubled.
On the flip side, it’s sad to see that support for free trade on the right declined a bit. Though I hope conservatives go back to being Reaganites once Trump is out of the White House.
I’ll close with a couple of caveats.
First, I’m skeptical that folks on the left now like free trade for the right reason. My concern is that they simply want to disagree with Trump. That’s better than nothing, of course, but I’d like them to understand why it’s a good idea to reduce the burden of government (in all areas, not just trade policy).
Second, I may be getting old, but I can remember what happened when Biden was in the White House. His trade policy was largely a continuation of Trump’s 1st-term protectionism. Though maybe, just maybe, a pro-trade Democrat will emerge as the 2028 race heats up (I won’t be holding my breath).
In response to a Bloomberg report headlined “Trump Pauses Duties on Moroccan Fertilizer to Aid Farm Economy,” Scott Lincicome tweets:
Imports (and free trade) to the rescue, again.
Alexander Kustov rightly criticize Europe’s ‘progressives‘ regressives for their unscientific and inhumane hostility to air-conditioning. Two slices:
As the latest heat wave discomforts Europe, France is arguing about air conditioning. Marine Le Pen’s far-right National Rally supports issuing €20 billion (about $23 billion) in interest-free loans to buy 30 million to 40 million units and insulation. The French left argues that air conditioning is a selfish indulgence and an ecological menace. Jean-Luc Mélenchon, the country’s most prominent left-wing leader, warned that cooling would mean “increasing the damage,” and says he wouldn’t expose his grandchildren to air conditioning because it “destroys your sinuses.”
To an American, this is disorienting. Nearly 90% of U.S. households have air conditioning. But in much of Europe, cooling is a hot issue on which the populist right has the better side of the argument.
That should unsettle American progressives, who assume the far right is consistently irrational while the left is the party of science. On air conditioning, the opposite is closer to the truth. Keeping people cool in a deadly heat wave is humane and politically smart. It is the kind of help ordinary citizens can see for themselves and appreciate.
Summer heat is dangerous. In France, a single heat wave killed nearly 15,000 people in 2003. Across Europe, more than 61,000 people died in record heat in 2022. Air conditioning is the cure. The economist Alan Barreca and his colleagues found that the spread of home cooling explains most of the decline in “hot-day-related fatalities” in the U.S. since 1960.
…..
When it comes to air conditioning, with people dying in the heat, the populists are simply correct. The left’s most respectable voices are telling grandmothers to draw down the shutters and wait it out. You don’t have to like Ms. Le Pen, or agree with her on immigration, to admit she has this one right. Caring about evidence means being willing to say so out loud, even when the side that has lost the thread is your own.
Also critical of the inhumane ideology that prevents human beings from cleansing the environments in which they actually live and experience closely is Matthew Hennessey. A slice:
European homes aren’t air-conditioned the way American homes are, and the consequences are proving deadly. Houston has roughly the same population as Paris and very few people die there when the temperature spikes. The average summer temperature in Phoenix—a city full of elderly people that is only a little smaller than Paris—is over 100 degrees Fahrenheit. Baking to death is a choice.
Roger Pielke Jr. of the American Enterprise Institute gets right to the heart of it: “The larger problem is not technology or cost, but the fact that among many, cooling technologies have taken on a moral framing as a vice.”
Brittany Bernstein is correct: “If the Supreme Court is in the tank for Trump, it sure has a weird way of showing it.” A slice:
But in rejecting Trump’s final avenue to avoid paying millions to Carroll, who successfully argued that Trump sexually abused her in the late 1990s and later defamed her when he denied her allegations when she came forward in 2019, the Court has offered just another piece of evidence that it hardly caters to the president’s every whim.
And in fact, the very same day the Court issued its ruling in the Carroll case, it dealt two more losses to Trump, including a ruling in favor of Lisa Cook, a member of the Federal Reserve’s Board of Governors whom the president had tried to fire. In a 5–4 ruling, the Court determined Cook can remain in her job while the case works its way through the legal system.
The Court also upheld a Mississippi law allowing election officials to count mail-in ballots that are postmarked by Election Day but received up to five days after it.
And yet, progressives are quick to discount these rulings against the president. Every decision in the president’s favor is used as evidence that the Court’s conservative majority serves as a “rubber stamp” for the president.
Barry Brownstein recalls “Thomas Paine’s challenge to a complacent America.”
Richard Salsman hits an important nail squarely on its head:
The publicly schooled are easily fooled. Government ownership & control of the means of PRODUCTION is facilitated by government ownership & control of the means of INSTRUCTION. End the vicious bipartisan DESTRUCTION of human capital. Defund public schools ASAP.
Price controls have been tried on every inhabited continent and for 4,000 years of recorded history. Few policies have been tried among more races or in so many different cultural settings. Yet the results have been remarkably similar.
Thus, self-interest is the indomitable individual force that drives us to seek progress, makes us achieve it, and spurs us on, but which also makes us inclined to monopolize it. Competition is the no less indomitable humanitarian force that snatches progress as it is achieved from the hands of the individual in order to make it part of the common heritage of the great human family. These two forces, which can be criticized when considered separately, constitute social harmony when taken together because of the interplay of their elements in combination.
It is a well known fact, that there are parts of Europe, which have more Capital, than profitable domestic objects of employment. Hence, among other proofs, the large loans continually furnished to foreign states. And it is equally certain that the capital of other parts may find more profitable employment in the United States, than at home. And notwithstanding there are weighty inducements to prefer the employment of capital at home even at less profit, to an investment of it abroad, though with greater gain, yet these inducements are overruled either by a deficiency of employment or by a very material difference in profit. Both these Causes operate to produce a transfer of foreign capital to the United States. ’Tis certain, that various objects in this country hold out advantages, which are with difficulty to be equalled elsewhere; and under the increasingly favorable impressions, which are entertained of our government, the attractions will become more and More strong. These impressions will prove a rich mine of prosperity to the Country, if they are confirmed and strengthened by the progress of our affairs. And to secure this advantage, little more is now necessary, than to foster industry, and cultivate order and tranquility, at home and abroad.
