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Today’s Wall Street Journal features this lovely essay by Robert Woodson, who died a few days ago. A slice:

America was founded on ideals intentionally left unfinished. Its true greatness lies not in claims of perfection, but in its constitutional capacity for self-correction. The painful struggle to live up to those ideals takes courage, self-discipline and, above all, grace. Not the cheap, performative grace of political rhetoric that rationalizes wrongdoing or denies injustice. The costly kind that demands something of you: discipline, sacrifice, responsibility and moral courage. The kind that chooses restoration over revenge even when revenge feels justified.

Radical grace doesn’t excuse evil but refuses to let evil define the future. This virtue has always been one of black America’s greatest contributions to the nation. Slavery didn’t build black resilience. It revealed the strength, faith, ingenuity and perseverance already present in people who refused to let oppression define the limits of their humanity. Out of bondage emerged some of the greatest examples of entrepreneurship, family formation, innovation, moral strength and excellence this country has ever produced.

Even during Jim Crow, flowers grew through the cracks. Radical grace, not victimhood, is the defining thread of black America’s story, and it is the model all Americans must recover.

Here’s the abstract of a new paper by U.C.-Berkeley economist Lucas Davis:

It may seem like a distant memory now, but as of the mid-2000s, U.S. natural gas production had been flat for a decade, and the U.S. was importing liquefied natural gas (LNG), with plans to import much more. Then shale gas happened. Advances in hydraulic fracturing and horizontal drilling caused U.S. natural gas production to increase significantly, and the U.S. went from being a net importer of natural gas to being the world’s largest exporter. This paper calculates how much shale gas has saved U.S. natural gas consumers. Using price differences between the United States, Europe and Japan, we calculate that U.S. natural gas consumers have saved $3.1-$4.3 trillion between 2007 and 2025, equivalent to $164-$227 billion annually. Access to low-price U.S. natural gas has been particularly valuable during major supply shocks such as the war in Ukraine, and the benefits of shale gas have been experienced broadly across sectors and states.

Donald Trump, like all protectionists, is not pro-consumer; but unlike many protectionists, he is also not pro-business. Trump, like all collectivists in practice, is pro-state – as is revealed by this Bloomberg report of his shaming of American businesses who seek to be reimbursed for the illegal tariff charges that they paid. A slice:

The scramble for as much as $166 billion in refunds — plus interest — comes with the risk of political and legal jeopardy. Trump often says it’s foreign firms that pay his import taxes — though studies show otherwise — and he’s now painting refund backers as unpatriotic after the Supreme Court struck down his IEEPA authority.

“You’re talking about the people in many cases that hate our country, giving them back money,” the president told reporters at the White House on Thursday. “It was a terrible decision.”

“CEO has ‘had enough’ of Trump’s big scheme to save the US economy.”

The Editorial Board of the Washington Post correctly recognizes that any government – such as today’s Labour government in the U.K. – that resorts to calling for price controls is a government that’s desperately out of touch with economic reality. A slice:

One of the ways inflation can damage the economy is by prompting politicians to buy into economic delusions in response.

Case in point: The Financial Times and BBC reported that the British Treasury has been pressuring grocery chains to adopt “voluntary” price caps on staples such as bread, eggs and milk as part of the government’s response to price increases worsened by the ongoing conflict in Iran. The government has reportedly threatened to move forward with additional regulatory interventions — acknowledging they will be financially damaging to grocers — if retailers refuse to cap prices.

The Editorial Board of the Wall Street Journal wisely decries the GOP’s continuing embrace of the devilish designs of organized labor. A slice:

On Wednesday seven House Republicans also crossed the aisle to hand unions the 218 votes they needed in a discharge petition to bypass a committee and send the Faster Labor Contracts Act (FLCA) to the House floor. The GOP Members who confuse the priorities of union bosses with the needs of union workers are West Virginia Rep. Riley Moore, New Yorkers Nick LaLota and Mike Lawler, Nebraska Rep. Don Bacon, Ohio Rep. Max Miller and Pennsylvania’s Rob Bresnahan and Brian Fitzpatrick.

The law gives unions a bludgeon against business by mandating government arbitration if companies don’t reach agreements on an approved timeline of when unions are first certified. If the employers and the union can’t agree on a contract within 90 days, government would step in for mediation followed by binding arbitration. Individual workers are cut out of the process.

This is an invitation for unions to refuse to compromise on their demands because an employer can oppose a deal and still may have to accept it. Arbitrators often have minimal operating knowledge of a particular company, its constraints or its priorities for growth. Rulings can be based on industry trends and generalities. An arbitration panel decision would be binding on the parties for two years unless amended “by written consent of the parties.”

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… is from page 33 of Thomas Sowell’s Compassion Versus Guilt, a 1987 collection of some of his popular essays; specifically, it’s from Sowell’s November 29th, 1984, column titled “Withdrawal from Drugs” [original emphasis]:

Drugs are inherently a problem for the individual who takes them, but they are a much bigger problem for society – precisely because they are illegal. It is their illegality that makes them costly and drives people to desperation to get the money by any means, at anybody else’s expense.

DBx: Yes.

Arguments in favor of drug prohibition too often rely on a few illegitimate moves. One of these moves is to identify very real problems that arise (or that would arise) from the taking of narcotics that have been legalized – problems that extend beyond the adults who choose to take narcotics. Such problems are a genuine downside – a ‘cost’ – of drug legalization. But the reality of these costs is insufficient to justify continued criminalization of narcotics; these costs must be weighed against the benefits of legalization.

The benefits of legalization extend beyond the benefits that drug users might get from using legalized drugs. Even if we ignore the users’ benefits (or insist that these benefits aren’t real or credible), there are benefits to those of us who don’t use illicit narcotics. Chief among these benefits is reduced corruption of law enforcement (including governments’ reduced reliance on civil asset forfeiture), along with a reduced role for criminals. This latter observation points to a second illegitimate move frequently made by drug warriors: they point to the problems that arise from drug use in today’s criminalized system. But many of these problems (as Sowell points out) are artifacts of the criminalization of drugs.

Just as criminal gangs no longer supply booze in America, criminal gangs would not supply other now-illegal intoxicants were these intoxicants legally purchasable and usable by adults.

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Here’s a letter to the Wall Street Journal.

Editor:

Greg Ip’s argument that cryptocurrencies, being privately issued, will fail as money relies heavily on his historical claim that privately issued bank notes in the 19^th-century United States failed as money (“Stablecoins Are Private Money. That’s Why They’re a Risk to the Economy.” May 25). Mr. Ip’s history is incomplete.

It’s true that problems plagued privately issued bank notes in 19^th-century America. But research by Hugh Rockoff, George Selgin, Lawrence H. White and others reveals that these troubles were caused not by the bank-notes’ privateness but, instead, by government restrictions. Most notably, but not only, legislation restricted branch banking and required privately issued bank notes to be collateralized by state-government and railroad securities that sometimes proved to be junk.*

In contrast, where banking was less encumbered by government restrictions – places such as Scotland in the 18^th and 19^th centuries, and Canada in the 19^th century – privately issued bank notes served very well as money.

Nor is history kind to Mr. Ip’s suggestion that government money serves well as a store of value. In the 124 years from 1790 through 1913 (the year the Federal Reserve was created), the dollar lost approximately eight percent of its value, yet in the 114 years since the Fed’s creation (1913-2026), the dollar lost a whopping 97 percent of its value.**

If cryptocurrencies fail to serve as good money, the reason won’t be that private issuers of money are destined to perform more poorly than government issuers.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

* George A. Selgin and Lawrence H. White, “How Would the Invisible Hand Handle Money?” Journal of Economic Literature, December 1994, Vol. 32, pages 1718-1749.

** George Selgin, William D. Lastrapes, and Lawrence H. White, “Has the Fed Been a Failure?” Cato Policy Report, November/December 2012, and “Consumer Price Index, 1800- ” Federal Reserve Bank of Minneapolis.

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My Mercatus Center colleague Rebecca Lowe – a native of Great Britain – tells why she loves America. A slice:

The values underlying the Declaration of Independence — freedom, equality, justice — don’t belong to any place. Yes, you might find them here in America more than you find them in other places. That’s one reason I live here. And you might find them in John Locke’s work more than you find them in other people’s works. But they reflect truths about humanity; about what it is to be human. They reflect moral truths. So they are John Locke’s, and Americans’, only in a loose descriptive sense.

I love America, and I love the Declaration of Independence, not because of great phrases like “the pursuit of happiness”. But because America and the Declaration of Independence represent a commitment to the pursuit of moral truth. And there’s nothing more important to me — or for all of us.

Agustina Vergara Cid praises immigrants to America who “have fought for America’s founding promise because they understood it, not because they inherited it.” A slice:

Lafayette chose to fight for America after he became enamored with the cause for independence. In 1778, he wrote: “The moment I heard of America I loved her; the moment I knew she was fighting for freedom I burnt with a desire of bleeding for her; and the moment I shall be able to serve her, at any time, or in any part of the world, will be the happiest of my life.”

Jordan McGillis, writing at National Review, explains how “a market-based rare earths policy can counter China.” A slice:

On the one hand, since geopolitical risk is and always has been a factor in corporate capital allocation, we could simply let market actors price in the potential for Chinese export stoppage and adjust accordingly. That’s not just an optimistic theory drawn up on Econ 101 blackboards. In the middle of the pandemic, the world’s top semiconductor manufacturer, TSMC, responded to market risk dynamics by planning a new plant in Arizona — two years before Congress would pass industrial-policy legislation on semiconductors. In the minerals sector in 2023, six months after China announced its new export controls on gallium and germanium, an American company announced a massive discovery in Wyoming, as I wrote about for National Review Online (“New Wyoming Dig Shows Limits of China’s Export Controls,” January 22, 2024). Consistent with the laissez-faire attitude is trade with non-adversarial countries, environmental regulatory reform, and innovation to reduce the importance of the vulnerable minerals altogether.

“Detroit once ruled Canada’s car Industry. Trump’s tariffs may end that.” A slice from this New York Times report: (HT Scott Lincicome)

At the industry’s peak around the turn of the last century, cars and trucks, most made by U.S. manufacturers, accounted for nearly 40 percent of all exports from Ontario, Canada’s industrial center and most populous province.

The massive factories and the hundreds of thousands of workers they employed underscored the tight bonds between the United States and Canada.

For over 60 years, Canada’s auto industry had thrived from free trade agreements that sent much of its production to the United States. By ending tariffs, those agreements also made cars built in American factories affordable for Canadians, a boon to U.S. industry.

But Mr. Trump’s tariff campaign is shattering that dynamic, hollowing out the once-mighty Detroit-based carmakers in Canada. The future of a free-trade agreement that has knit together Canada, the United States and Mexico is also up in the air.

David Bier reports on just how radically restrictive immigration policy has become under Trump. A slice:

The Department of Homeland Security (DHS) announced Friday that it will cease granting green card applications except in extraordinary circumstances. In short, DHS grants green cards when a qualified immigrant who is inside the United States applies to adjust their status to legal permanent residence. Now, every legal immigrant must leave the country—that is, self-deport—even if they are qualified for a green card and even if leaving would disqualify them.

The policy is a radical expansion of DHS’s “quiet quitting” on legal immigration that has been going on for months. As I previously detailed, DHS—or, more precisely, its component known as US Citizenship and Immigration Services (USCIS)—has slashed green card approvals in half over the last year. This drop came primarily from not processing applications. Now USCIS’s new memorandum details a plan for mass denials. USCIS has gone from the “quiet-quit” to walking out on 1.2 million green card applicants.

“Exit taxes won’t save failing states.”

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… is from page 113 of my late, great colleague Walter Williams’s 2015 book, American Contempt for Liberty, which is a collection of many of Walter’s columns and essays; this quotation specifically is from Walter’s November 6th, 2013, syndicated column, “Congressionally Duped Americans“:

The only way Congress can send checks to Social Security and Medicare recipients is to take the earnings of a person currently in the workforce. The way Congress conceals its Ponzi scheme is to dupe Social Security and Medicare recipients into thinking that it’s their money that is put away and invested. Therefore, Social Security recipients want their monthly check and are oblivious about who has to pay and the pending economic calamity that awaits future generations because of the federal government’s $100 trillion-plus unfunded liability, of which Social Security and Medicare are the major parts.

DBx: Although Walter overestimated the size of the unfunded liabilities – these are today estimated to be $73.2 trillion – his larger point remains standing and strong: the U.S. government’s debt is a gigantic burden for future generations of Americans.

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GMU alum Tom Savidge explains how federal transfer payments in the United States undermine Americans’ freedom.

Phil Magness and Stan Veuger make clear that Section 122 of the Trade Act of 1974 – the statutory provision used by Trump to impose his post-Learning Resources tariffs – does not support those tariffs. Two slices:

On May 7 a three-judge panel of the Court of International Trade (CIT) ruled against the Trump administration’s latest round of global 10% tariffs. The government argued that Section 122 of the Trade Act of 1974 authorizes these import duties because we face a “large and serious balance-of-payments deficit.” There is one problem: we do not.

Historically, under the Bretton Woods system of fixed exchange rates, a balance-of-payments deficit meant a drawdown on the country’s official reserve assets. But Bretton Woods ended half a century ago. Under the flexible exchange rate system we have today, there cannot be a surplus of dollars that forces an outflux of gold or otherwise triggers a balance-of-payments crisis. Instead, the exchange rate–the price of the dollar–simply adjusts.

After previously acknowledging that trade deficits and balance-of-payments deficits are “conceptually distinct,” the Trump administration is now attempting to blur the distinction. Thankfully, the CIT, relying heavily on legislative history, saw through this chicanery.

As the government prepares to appeal its case to the Federal Circuit, it is important to emphasize how badly they have misconstrued Section 122’s purpose. One aspect of its history has not received much attention yet: its relationship with the General Agreement on Tariffs and Trade (GATT). This landmark trade agreement makes it crystal clear what a balance-of-payments deficit is.

Article XII of the GATT, as amended in 1955, allows member states to enact import restrictions to safeguard the balance of payments. This provision only permits countermeasures “to forestall the imminent threat of, or to stop, a serious decline in [a member state’s] monetary reserves” or, if reserves were very low, “to achieve a reasonable rate of increase in its reserves.” This is precisely how economists, plaintiffs, historians, and now the CIT have defined the balance-of-payments. And the provision remains in force. In fact, the administration invoked Article XII as the legal basis for its Section 122 tariffs when it notified the WTO.

Congress was fully aware of this article when, in 1973, it started work on what would become the Trade Act of 1974. In fact, in June of that year the Senate Finance Committee commissioned a study of how Article XII worked. In the study, Article XII’s conceptualization of balance-of-payments deficits is simply taken as given. The same year marked the beginning of the Tokyo Round of GATT negotiations. By revising our trade laws, Congress aimed to equip US negotiators with leverage tools under the GATT provisions – not to run afoul of Article XII by dramatically expanding the definition of balance-of-payments deficits, as Trump now imagines.

The language of Section 122 itself makes the distinction between balance-of-payments and trade deficits clear as well. It explicitly refers to the trade balance just a few lines down from the balance-of-payments provision the government relies on, demonstrating that legislators saw it as a distinct concept.
…..

The economics and history are clear. Section 122 applied to monetary reserve balances, not trade deficits. If President Trump wants to impose a worldwide tariff because he believes that will improve the economy, he should convince Congress to pass legislation. He should not be allowed to rely on word games to circumvent the Constitution.

Richard Salsman is understandably no fan of the new animated movie Animal Farm.

The Editorial Board of the Washington Post applauds Trump’s hesitation to have government regulate AI. A slice:

On Thursday, President Donald Trump abruptly pulled the plug on the signing of an executive order that would have given federal agencies an early look at the nation’s most powerful artificial intelligence models before their public release. That’s good news: Even the supposedly voluntary review system under consideration could have hardened into a government chokepoint on U.S. AI development.

Speaking of government regulation of AI, National Review‘s Andrew Stuttaford rightly criticizes the E.U.’s hare-brained, heavy-handed approach – as well as the E.U.’s laughable justification for its suffocating officiousness.

Phil Magness tweets: (HT Scott Lincicome)

In 2018 Zucman published a paper in a top econ journal that inadvertently revealed the total federal/state/local tax rate of the top 0.001% was ~40%.

A year later, he realized this undermined his wealth tax. So he fudged the stats to fit his politics.

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… is from page 140 of Deirdre McCloskey’s forthcoming book, Equality of Permission:

Liberalism permitted the trying out of new ideas to become astoundingly commonplace and astoundingly productive, because it let (almost) everyone try out novelties. New ideas arose therefore from ordinary people, not merely from the heights, as to the contrary the Enlightenment assuredly did in person or in patronage. The new ideas, whether material or institutional or ideational, and at length science itself, came largely from poor people liberated by equality of permission to have a go.

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Here’s a letter to a new correspondent.

Mr. S__:

You write that you and other “average Americans have got President Trump’s back since we’ve been fed up with elites forcing free trade down our throats.”

I see. So what you’re saying is that you’re fed up with people who want to increase your freedom to spend your income as you choose. That’s interesting.

Suppose your next-door neighbor, Sam, arms himself with a loaded .45 caliber pistol and plants himself by your front door. And then each time someone delivers a package or Uber Eats meal to your home, Sam demands that you and your family pay to him – to Sam – ten percent of the purchase price. If you refuse, Sam – waving his weapon menacingly – prevents you from completing the purchase that you wish to make.

But Sam doesn’t want you to think he’s a brute. Oh no! He means well. “Be grateful,” Sam assures you, “for by increasing your cost of home delivery, I make you more likely to shop in person at the local mall and to dine out at local restaurants. I’m helping our town’s economy! You should thank me!”

Several days later, your neighbor from across the street, after observing Sam’s actions, organizes others of your neighbors to put an end to Sam’s interference with your and your family’s freedom to spend your money as you choose.

Would you accuse these neighbors, who try to stop Sam from molesting you, of forcing free trade down your and your family’s throats? Would you label these neighbors as “elites” who should mind their own business? Or would you understand that the person who is forcing his preferences down your and your family’s throats is, in fact, Sam and not your neighbors who simply wish to prevent Sam from molesting you so that you and your family are left free to spend your income in whatever peaceful ways you choose?

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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Stefan Bartl writes about “the march of a new global economic order.” A slice:

The bipartisan turn away from free trade has been a public-policy blunder that favors politically protected industries while neglecting consumers. That is the snowball effect of government intervention: tariffs generate retaliation, retaliation justifies subsidies, subsidies create managed purchase agreements, and managed agreements necessitate new boards, exemptions, and political bargaining.

The US–China trade war began under Trump in 2018, remained largely intact under Biden, and has escalated further in Trump’s second term. The contrast is striking: while China lowered its average tariffs on the rest of the world from 8.0 percent in early 2018 to about 6.5 percent by early 2022, the United States raised its average tariffs on the rest of the world from 2.2 percent in January 2018 to 18.4 percent today.

According to PIIE, average US tariffs on Chinese goods stand at 47.5 percent and cover all imports from China, while China’s average tariffs on US goods stand at 31.9 percent. This is no longer temporary leverage. It is structural protectionism.

Hooray – seriously – for Gov. Spanberger.

The Laffer Curve is real. A slice:

The stereotypical British émigré used to be the retiree packing up for sunnier climes in Spain or France. These days it’s the younger worker who moves to Dubai for lower taxes and then delays returning to Britain. These are some of Britain’s most entrepreneurial people, and they’re spending their prime tax-paying years out of the country.

They’re in good company. The annual “rich list” of Britain’s wealthiest, published last week by the Sunday Times of London (owned by the same company as the Journal), found a race for the exits. One-sixth of the people on the list two years ago have dropped off, and 111 of the British citizens on the 350-name list live offshore.

Only one foreign billionaire moved to Britain: Warren Stephens, the U.S. ambassador. As a diplomat, he’s exempt from British taxation.

Wall Street Journal columnist Joseph Sternberg argues that “there’s no moral bar against choosing welfare over economic growth. But don’t deny the trade-off.” A slice:

Those who argue that Europe’s falling-behind is overstated (typically American liberals and America-skeptic Europeans) claim that for various reasons Europe’s standard of living doesn’t feel all that far behind America’s, to the point that differences in nominal output are irrelevant. European quality of life may even be better than America’s in important ways. Those on the other side (generally euroskeptic Americans and Europeans with experience of both places) observe that over the longer term a country’s capacity to participate in the global marketplace matters more than its feelings.

The latter perspective is more convincing in light of the main economic questions preoccupying Europe: How can the Continent navigate a demographic transition that will strain its social-welfare systems to the breaking point while also meeting the defense-spending demands of a more dangerous world? Any credible solutions hinge on Europe’s ability to purchase raw materials and technology on the open global market, and also to borrow from foreigners. Per capita output data gussied up by various adjustments to create hypothetical “purchasing power parity” metrics that flatter Europe don’t tell you what you need to know.

My Mercatus Center colleague Alden Abbott tells of “the case of the vanishing competitor.”

University of Dubuque political philosopher Adam Smith is an old-fashioned professor.

Billy Binion explains that “Trump’s ‘anti-weaponization fund’ is built on a contradiction.”

Judge Glock tweets: (HT Scott Lincicome)

It is actually a reasonable question to ask if any companies, in the history of humanity, have been less in need of government money than semiconductor chip companies in 2026.

This is not a sector that investors are unwilling to invest in.