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Chris Horner reports on blue-states’ green-energy fantasies doing battle with reality; reality is winning. A slice:

The politically-driven effort to force a transition from traditional power to wind, solar and battery has produced an energy crisis in blue America. Progressive-led states are beset by increasing electricity rates and declining reliability. Although their leaders uniformly blame President Trump, the costs have become so high that some on the left are finally scaling back these destructive policies. But it’s no guarantee sobriety will win the day.

New leftwing awareness of energy realities is apparent coast to coast. Former New Jersey Rep. Mikie Sherrill won the state’s governorship this month in part by pledging to deal with high electricity costs. As a member of Congress Ms. Sherrill reliably voted for the energy-transition agenda, although on the campaign trail she blamed Trump policies for her state’s problems. Out West, California Gov. Gavin Newsom is moderating some of his positions in anticipation of a 2028 presidential run from a state with the nation’s highest electricity rates. Mr. Newsom recently signed legislation returning billions to the state’s beleaguered rate-payers. As he slowed some of the “climate” regulations that he previously helped accelerate, Mr. Newsom deflected responsibility to subsidy reductions in President Trump’s “One Big Beautiful Bill” that have yet to take effect.

Yet recent infighting over detransitioning in Massachusetts indicates that holdouts remain, opposing even the most sensible adjustments. In late October, the organization tasked with ensuring the reliability of New England’s grid warned of power shortages as soon as this winter, emphasizing the need to obtain dependable energy production. The gist: Solar and wind will not deliver sufficient, constant, reliable power.

My GMU Econ colleague Vincent Geloso reviews Thomas Piketty’s A Brief History of Inequality. Three slices:

As political manifestos go, this is outstanding work. There is substance and coherence. At the same time, however, I doubt how much a politician can win on such a manifesto because the remedies offered are also accelerants to the forces of populism and illiberalism. The politics of redistribution can lead to tensions between those who pay and those who receive. This is why numerous economists point out that policies reducing the size of the state (in both scale and scope) are associated with less populism.

For example, when using ‘economic freedom’ indices—which weigh components such as property rights protections, free trade, business regulation, monetary policy, and the size of government—in conjunction with measures of political populism (both right and left), one finds that ‘economic freedom’ depresses populism. In other studies, what some call ‘welfare chauvinism’ is what drives anti-immigrant feelings (nativism). As Krishna Vadlamannati and Indra de Soysa summarized, the ‘positive effect of a bigger immigrant share of the population on support for nativist populism is conditional upon higher degrees of social welfare’ spending. In other words, the book proposes remedies that have fueled the rise of the populist right and left.

It is not surprising, then, that in Piketty’s home country of France, the Rassemblement National of Marine Le Pen and Jordan Bardella (which seems poised to win in 2027) has been a confused mix of left-wing economic policies and right-wing identitarian ones. France, with its sprawling welfare state that goes well beyond what the near-totality of economists would call the optimally sized state, has already implemented most of what Piketty recommends—and it is precisely there that liberal democracy appears most threatened, both from the left and the right.

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In other words, the very institutional arrangements and policy frameworks that  Piketty criticizes as obstacles to equality appear, in practice, to foster intergenerational progress in educational achievement. Far from hindering mobility, economic freedom and moderate taxation seem to create an environment in which children are more likely to surpass the educational outcomes of their parents. What this chapter amounts to is a complaint about ‘not enough’ (an arguably fair complaint) and then a series of rehashed clichés about solutions for which there are good reasons (not discussed and ignored) to believe would make things worse.

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Using economic freedom indices (notably the Fraser Institute’s Economic Freedom of the World), one can assume that higher scores correspond to more capitalist economies with more liberal policies—precisely less of what Piketty prescribes. Evidence shows that ‘big liberalizations’ not only raise average incomes but also lift those in the bottom deciles along with the top, leaving inequality relatively unchanged. Conceptually similar results apply to economically disadvantaged groups such as women who gain noticeably from liberalizations (there is evidence that this applies to minority groups as well). Crucially, such liberalizations also generate large increases in income mobility. These causal results align with a growing body of associational studies linking economic freedom to greater upward mobility—relationships consistently stronger than those between inequality and mobility.

GMU Econ alum Jeremy Horpedahl tweets: (HT Scott Lincicome)

France is 25 years behind the US in GDP per capita.

Mani Basharzad makes the case that “‘Wasteful’ spending by the very wealthy is experimentation that eventually allows millions to enjoy the fruits of innovation.”

Eric Boehm is no fan of Trump’s tariffs punitive taxes on Americans’ purchases of toys for their children. A slice:

The direct costs of the tariffs don’t even tell the whole story. As Reason has detailed, the tariffs have created headaches for board game and toy companies across the country, as normally reliable supply chains have become more expensive and sometimes totally unworkable amid the White House’s ever-shifting tariff edicts.

“The U.S. is our least trustworthy trading partner right now—and I say that as an American,” Price Johnson, COO of Cephalofair Games, told Reason last month. “I can’t trust what the policy is going to be tomorrow, let alone next week.”

Two weeks ago, the Trump administration seemingly admitted that its tariffs were making some goods more expensive. The White House rolled back tariffs on coffee, bananas, and several other items. That was framed as an attempt to lower grocery prices amid rising inflation and deepening skepticism from the American public about the merits of Trump’s tariff plans.

As [Ed] Gresser notes, however, the tariffs that remain in place are in many cases bigger tax increases than the ones on goods like coffee and bananas, which have now been removed.

“The tariff hike on toys is twice as big as that of the banana and coffee tariffs put together, and that on shoes tariff increase alone offsets the entire 238-product exclusion list,” he wrote earlier this month.

John O. McGinnis defends his thesis that “delegation of unguided power to the executive undermines the separation of powers, even as retrospectively invalidating such delegations risks chaos. Nor do any of the responses take issue with my novel method of addressing this problem: prospective overruling. Prospective overruling can restore the separation of power structure without political upheaval.”

National Review‘s Andrew McCarthy decries the Trump administration’s lawless war-making on the high seas. Two slices:

An explosive Washington Post report, the subject of so much discussion the past two days, says that, in the first missile strike the Trump Defense Department carried out against operatives of a boat suspected of transporting narcotics on the high seas off Venezuela, two survivors were rendered shipwrecked. As they clung to the wreckage, the U.S. commander ordered a second strike, which killed them.

If this happened as described in the Post report, it was, at best, a war crime under federal law. I say “at best” because, as regular readers know, I believe the attacks on these suspected drug boats — without congressional authorization, under circumstances in which the boat operators pose no military threat to the United States, and given that narcotics trafficking is defined in federal law as a crime rather than as terrorist activity, much less an act of war — are lawless and therefore that the killings are not legitimate under the law or armed conflict. (See my Saturday column, with links to prior posts on this subject.)

Nevertheless, even if we stipulate arguendo that the administration has a colorable claim that our forces are in an armed conflict with non-state actors (i.e., suspected members of drug cartels that the administration has dubiously designated as foreign terrorist organizations (FTOs)), the laws of war do not permit the killing of combatants who have been rendered hors de combat (out of the fighting) — including by shipwreck.

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The laws of war, as they are incorporated into federal law, make lethal force unlawful if it is used under certain circumstances. Hence, it cannot be a defense to say, as Hegseth does, that one has killed because one’s objective was “lethal, kinetic strikes.”

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… is from page 223 of Art Carden’s and GMU Econ alum Caleb Fuller’s superb book, Mere Economics [original emphasis; footnotes deleted; link added]:

The “finite resources” argument also begs the question because it assumes we know which materials are “resources” and which are not. Something is only a resource insofar as we can use it to satisfy wants, and we figure this out through long processes of trial and error. Oil was just land-running sludge until we figured out how to use it. Here’s economist Michael Munger’s useful test: if people will pay you for it, it’s a resource. If you have to pay someone to take it, it’s garbage. Without private property rights and exchange-promoting rules, we can’t know which is which.

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My intrepid Mercatus Center colleague, Veronique de Rugy, is thankful for the Declaration of Independence and the U.S. Constitution, and she here writes movingly about America. Three slices:

Thanksgiving invites us to pause and consider the gifts we often overlook. This year, at a moment of rising political unease and ideological confusion, I am especially grateful for one extraordinary inheritance: a nation and its creed brought into being by the Declaration of Independence and the U.S. Constitution.

Why, in addition to family, friends, and a feast, is this on my mind today? In certain circles, especially among “post-liberal” thinkers on the right, it’s now fashionable to claim that the Constitution has failed. Some argue that the country’s founding was overly individualistic or insufficiently moral, that our constitutional structure prevents the pursuit of a unified national purpose, or that what we need instead is a more powerful state headed by a muscular executive and a more cohesive cultural or religious identity enforced from above.

These arguments aren’t abstract. Some theorists openly celebrate unchecked executive power or regimes that derive legitimacy from hierarchy rather than the people’s consent. Increasingly, they dismiss the Founding not as a glorious achievement but as an obstacle to national renewal through centralized authority.

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This agenda ignores the extraordinary success of the American constitutional experiment and the astonishing diversity it has held together for nearly two and a half centuries. As famed historian Gordon Wood recently reminded us in The Wall Street Journal, America has always been different. Most countries emerged from a shared language, lineage, or ancient heritage. The United States did the opposite: It built a state first and then had to discover what it meant to be a nation.

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This reality helps explain why post-liberal critiques faulting the Constitution for failing to impose a single moral or cultural vision miss the mark. Constitutional limits exist because the Founders feared unchecked power, whether exercised by a ruler or by majorities which have at times been egregiously wrong. The Constitution protects a pluralistic society from the dangers of centralized authority and ideological certitude. In a nation as varied as ours, those protections are not optional.

We live in a time when self-appointed saviors on all sides claim to possess the single solution to our problems. The Constitution responds with humility. It demands persuasion, not imposition. It insists on limits. It expects disagreements. It trusts that freedom, not enforced consensus, is the proper foundation for a lasting political community.

The Constitution doesn’t guarantee national unity. It guarantees something better: a system that channels conflict without destroying liberty. As Wood notes, democracy can be volatile. The Founders knew that well. Their answer is a framework that moderates collective impulses while preserving the rights of individuals and minorities.

Jack Nicastro reminds us that the abundance of affordable holiday gifts that we Americans today take for granted is made possible by globalization. A slice:

In January 1964, manufacturing’s share of total nonfarm employment was 27 percent. Since then, manufacturing’s share of employment has declined, reaching 8 percent in 2024. This macroeconomic transformation has not led to deprivation for the average American family, but abundance. Median household income grew from an inflation-adjusted $66,750 to $83,730: A real increase in the average family’s income of 25 percent! And with imports growing from 4.1 percent of gross domestic product in 1964 to 14 percent in 2024, we now have access to a wider variety of goods than at any time in human history.

This Black Friday, we would do well to remember the many ways in which capitalism and globalization have boosted our real wealth by making goods more affordable, and thus our ability to do meaningful things for the people we care about. Of course, Christmas isn’t only about gifting material possessions (experiences are also a good option). But these items are a great way to show our love and affection for special people in our lives, and thanks to the fierce price competition promoted by global markets, we’re able to give more affordable and better tokens of our affection.

Adrian Wooldridge is not favorably impressed with Sven Beckert’s criticisms of capitalism. Three slices:

And it is surely an axiom of modern progressive thought, which reigns supreme in places like Harvard, that capitalism is about the forcible extraction of wealth rather than the free exchange of goods of mutual benefit. Our professor is swimming with the tide rather than battling against it.

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Beckert is less impressive when he comes to the world after the late 18th century, partly because he makes some odd decisions. He devotes little space to the railroads, particularly in the UK and US, despite their role in fueling early stock markets, creating bureaucratic hierarchies and, of course, shrinking distance. He says little about banking until he reaches the “neoliberal age.” But it is largely because he sidelines the role of liberalism in creating the great economic take-off that transformed capitalism from a system of reshuffling wealth around the world into a system of sustained growth based on higher productivity and sustained innovation.

This take-off not only started in a particular place at a particular time — Britain from the late 18th century onward. It took place in the context of a particular culture — a culture that embraced individual rights and limited government. Liberal reformers ushered in a regime of free trade by repealing the Corn Laws (1846), thereby reducing the price of food and the power of guilds. They made it much easier to create limited liability companies, swept aside state monopolies such as the East India Company, and first abolished slavery in the UK and then disrupted the global slave trade.

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Which brings us to the big hole at the heart of this big book: innovation. The thing that distinguishes capitalism from previous economic systems is not exploitation, still less the barbarism of slavery, a subject to which Beckert, whose best-known previous book is Empire of Cotton, frequently returns. All pre-capitalist systems have relied on exploitation and enforced labor of various degrees, as have post-capitalist systems such as Stalin’s Russia and Mao’s China. The thing that distinguishes capitalism is its ability, indeed, its compulsion, to keep improving productivity by revolutionizing the means of production. Or, to paraphrase the economist Paul Romer, what matters is better cooking, not more ingredients.

The great heroes of capitalism are the entrepreneurs who can feel the future in their bones and will do anything to bring it into being — fanatics who are compelled to build castles in the air, as Joseph Schumpeter put it. The biggest beneficiaries of these innovations are consumers who are showered with products and services beyond the dreams of previous generations. Capitalism may have made accommodations with some horrible regimes and vile practices in the past, as Beckert shows in detail. But as a system it thrives best in conditions of freedom, where government power is limited, property rights secure and businesspeople left alone to pursue their dreams and subject them to the stern test of the market./blockquote>

Meg Reiss explains that “China’s rare-earth dominance is secured by American red tape.” Three slices:

Yet U.S. firms attempting to build processing capability and break China’s mineral dominance are hamstrung by onerous domestic regulations, including multi-year permitting delays and judicial reviews. The true obstacle is regulatory uncertainty, not environmental protection. When federal land or funding is involved, the National Environmental Policy Act (NEPA) can trigger a full Environmental Impact Statement, which typically takes more than two years. Both mining and processing take time, but processing could be built in just a few years with predictable regulatory timelines. Capital flees when reviews drag across agencies with no clear end.

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Rebuilding capacity also requires predictability across administrations. Here, Congress can provide an answer. Critical processing projects should not be rereviewed simply because a new administration arrives. To encourage durable decision-making,the Council on Environmental Quality, responsible for overseeing NEPA, should finalize guidance on accelerated reviews, and Congress should codify it to lock in stability.

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If the government acts now to cut red tape, the United States can rebuild processing capacity in three to five years.

Ian Ayres and Saikrishna Prakash have an interesting, and in my judgment sound, proposal to reverse the descent into lawfare. A slice:

As politicization has ramped up, the judicial checks on partisan prosecutions have remained static. Targets of political prosecutions can challenge their indictments. But courts rarely dismiss indictments on grounds of selective or vindictive prosecution.

We propose that Congress give federal judges another option. When a prosecution appears politically motivated, a judge should have the discretion to impanel a “prosecutor jury” to assess the propriety of the indictment.

The prosecutor jury would be composed of 20 randomly selected former U.S. attorneys, evenly divided between those nominated by Democratic and Republican presidents. A prosecution could proceed only if at least two-thirds of this panel — 14 out of 20 — concluded that the indictment was appropriate. This supermajority would ensure that at least a substantial minority of prosecutors nominated by a defendant’s own party supported the prosecution.

Former U.S. attorneys are uniquely qualified to guard against weaponized prosecutions. Unlike ordinary grand jurors, they have extensive experience making charging decisions, understand prosecutorial strategy and can distinguish legally sound theories from problematic ones.

Walter Olson makes clear “the hazards of broad pardons.”

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… is from Alexis de Tocqueville’s Forward to the 1955 edition of Stuart Gilbert’s translation of Tocqueville’s soaring 1856 masterpiece, The Old Régime and the French Revolution; this passage occurs specifically on page xv:

Even despots do not deny the merits of freedom; only they wish to keep it for themselves, claiming that no one else is worthy of it. Thus our quarrel is not about the value of freedom per se, but stems from our opinion of our fellow men, high or low as the case may be; indeed, it is no exaggeration to say that a man’s admiration of absolute government is proportionate to the contempt he feels for those around him.

DBx: Thus it is that the likes of Tucker Carlson, Josh Hawley, and Donald Trump on the political right join with the likes of Zohran Mamdani, Joseph Stiglitz, and Elizabeth Warren on the political left to reject freedom and free markets. Each holds his or her fellow Americans in contempt – contempt that hides beneath assertions of care for their fellow Americans.

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David Henderson reminded me today of this post of mine from nearly nine years ago in which I offered to bet $10,000 “that in not one of the next 20 years will the annual U.S. labor-force participation rate, as measured by the U.S. Bureau of Labor Statistics, fall below 58.1 percent – which is the lowest rate on record at the Bureau of Labor Statistics.”

The fear in early 2017 was robotics (which is still a fear today). But to this fear, as 2026 nears, we have added the fear that secular joblessness will be caused, or accelerated, by AI. I stand by my letter of long ago, and I repost it beneath the fold.

[continue reading…]

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Writing in the Wall Street Journal, GMU Econ alum Dave Hebert emphasizes the importance of the supply side as he highlights the dangers of government goosing-up demand. Two slices:

When Americans can’t afford something, Washington loves to help buyers and ignore producers. Politicians might feel as if they are improving affordability, but the strategy creates a vicious cycle: lawmakers subsidize purchases, watch prices rise, blame corporate greed, and then subsidize purchases even more to compensate. The American taxpayer is left funding the entire cycle.

Consider the Affordable Care Act. The law expanded insurance coverage to millions through subsidies and mandates, dramatically increasing demand for healthcare. However, the ACA did remarkably little to increase the supply. According to the Bureau of Labor Statistics, healthcare employment has grown at roughly 2% each year both before and after the ACA was passed. As a result, according to the Kaiser Family Foundation’s annual employer health benefit survey, average family premiums increased by 96%, going from $13,770 in 2010 to $26,993 in 2025. Demand increases, supply doesn’t, and prices skyrocket.

The Trump administration is using the same strategy to address housing affordability. Instead of building houses, President Trump has suggested moving from 30-year mortgages to 50-year mortgages. The administration is also evaluating portable mortgages, allowing homeowners to bring their current mortgage rate with them when they move.

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If Americans want more access to healthcare and housing at lower prices, Washington must focus on expanding supply. For healthcare, this means reforming licensing to increase the number of medical practitioners. It also means reducing the regulatory burdens that make opening clinics difficult. For housing, it means zoning reform, faster permitting and a reduction of the regulatory barriers that prevent builders from meeting demand.

The government fueling demand will always raise prices. The only question is whether politicians will stop pretending otherwise—and how much Americans will pay until then.

My intrepid Mercatus Center colleague, Veronique de Rugy, explains what shouldn’t – but, alas, what today nevertheless does – need explaining: The swamp will be stocked, not drained, by MAGA’s “industrial policy of tariffs, export controls, supply-chain mandates, ‘national champions,’ and the share-oversight of multiple private corporations.” Two slices:

Someone has to monitor the tariffs. Someone has to police the domestic-content rules. Someone has to approve the corporate decisions. And in the case of the Trump administration’s move to take a golden share in U.S. Steel, complete with veto power over major business decisions, someone has to sit in U.S. Steel’s boardroom and exercise that presidential veto.

That someone is always a bureaucrat.

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The Trump administration cannot credibly claim to fight the administrative state while expanding it. It cannot wage war on the “deep state” while designing an economic program that depends on it.

Also from GMU Econ alum Dave Hebert, here writing with Peter Earle, is this essay on “the truth about Chinese manufacturing.” A slice:

However, what is often overlooked, despite its widespread acknowledgment in other contexts, is the fact that China has a very large population. And when it comes to manufacturing, the numbers are simply staggering. In 2020, the year of China’s most recent census, over 120 million people were working in the manufacturing sector. Later, independent reports have the Chinese manufacturing workforce at over 212 million people. This means that the average Chinese manufacturing worker generates between $22,028 and $38,916 in value-added. By comparison, America employs just 12.7 million manufacturing workers, which is 6-10.6% of the number of manufacturing workers that China employs. On average, US manufacturing workers generate $229,133, which means our workers are between 6 and 10 times as productive as the average manufacturing worker in China.

This is absolutely incredible and underscores that those who claim “we don’t make things anymore” or that “China is destroying our manufacturing sector” are, in a word, wrong. Does China produce more raw output than we do? Of course. But this is not because they are an economic superpower. It’s because they have a significantly larger number of people employed in manufacturing than we do. In fact, they have about as many, if not more, people employed in manufacturing alone as the US has employed total. But on a per-capita basis, the US is by far and away the leader, and it’s not even close.

Martin Gurri notes that “entitled elites who think they deserve more are secret to Mamdani’s success.” (HT Arnold Kling) Two slices:

Both Trump and Mamdani aim to smash the structures that have organized American politics since the end of the Cold War. Their voters are those willing to follow them on that mission; hence the overlap.

Mamdani was fortunate to be running against Andrew Cuomo, a repellent specimen of the old regime. His victory signals the catastrophic collapse of the Democratic Party establishment, an outfit that only yesterday could foist a senile candidate for the presidency on the party’s ambitious young lions without eliciting a murmur of complaint.

Anyone who doubts that those days are over should walk a mile in Chuck Schumer’s shoes. The implications for the 2028 presidential race are, quite literally, incalculable.

Trump, however, is an America-first populist, whereas Mamdani is a DSA-style radical — that is to say, a Marxist who would be a Leninist if he could get himself organized. So mere repudiation of the system can lead to diametrically opposed positions.

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The opposite of capitalism, in other words, isn’t socialism but entitlement.

The most relentless enemy of the capitalist system isn’t the proletariat or the revolutionary vanguard but the entitled class.

That brings us back to Mamdani’s young, educated voters.

They belong to a generation that was coddled in childhood and pumped full of artificial self-esteem in school. They benefited from cheap government loans so they could pay college tuition and from grade inflation so they could graduate with straight A’s.

At every step, they were taught to despise their country as unworthy of their own exalted selves.

They had done nothing but expected everything. That’s practically the definition of entitlement.

Megan McArdle writes wisely. Two slices:

Normally, at this time of year, I dedicate a column to reflecting on the various innovations that have saved us from the normal human condition — which is to say, a life of frequent discomforts punctuated by even greater miseries. If you are tempted to rhapsodize about some imagined Edenic past, ask yourself whether you really have the fortitude to bury half your children before they finish puberty. I personally do not. I am soft and prone to melancholy. So I will be forever grateful that fortune delivered me to this place and this time, where I can wallow in peace and prosperity.

This year, however, I’ve been reflecting on another thing we ought to be more grateful for: America herself. We have been taking her too much for granted recently, assuming that she will keep showering her gifts upon us without so much as a thank-you note. We’re like trust-funders who slander capitalism and squander their incomes, secure in the knowledge that the checks will keep coming.

They will not, unless we once again start treating America as something we have to earn, rather than something we’re entitled to.

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Such inheritances do not last unless they are tended to. You can’t just assume everything will hold together. You have to be willing to some of the mending.

Unfortunately, that’s gone out of style among the elites who are supposed to be knitting together this improbable nation. Over the past couple decades, the people in charge of our great sense-making institutions — academia, the media, entertainment and the arts — decided that their main job was pointing out where the holes were and demanding that everyone else get busy fixing them. An emerging counter-elite of populist upstarts decided that it was much more fun to rip new holes than to figure out the boring work of governing.

Both groups tended to see their opponents as mortal enemies, rather than fellow Americans. Both spent a lot of time pointing out flaws in American-style free market democracy and little time reflecting on how pleasant, prosperous and free were their lives under that same system. And both groups were implicitly assuming that the work of keeping America in one piece belonged to someone else.

It doesn’t belong to anyone else. It belongs to all of us and each of us. No American can afford to be a lazy trust-funder, living off passive income. We have to be active stewards of our legacy.

Cranky Federalist offers some data that contradict one of the many fallacies spread by Tucker Carlson about Hungary and Russia. (HT Scott Lincicome)

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… is from page 285-286 of Edwin Cannan’s 1909 paper “The Incompatibility of Socialism and Nationalism,” as this paper is reprinted in the 1912 collection of some of Cannan’s essays, The Economic Outlook (E. Cannan, ed.):

At bottom they would be very much influenced by a habit we have got into of reckoning as units those areas which have a common fiscal system, especially if that system involves common customs duties with the incidental result of common statistics of imports and exports. Few realise how powerful these influences are. Two areas may be mixed up in the most puzzling way by a tortuous boundary like Manchester and Salford, but if you once give them a separate financial system, the liveliest local patriotism arises in the one which has the lowest rates; when, in addition to an internal fiscal system like that, you set up customs duties, the people begin to think they have a solidarity and common interest which they never thought of before, and which has no foundation in fact.

DBx: Yes.

Suppose that a not very implausible counterfactual history had played out, with the United States including what is today Canada. In that world, no one would think to measure the trade balance of the people living north of the 49th parallel with the people living south of that line. And no one – north or south of that latitude marker – would be any the worse for the absence of such a statistic. Indeed, everyone except rent-seekers would be better off as there would be no meaningless trade-balance statistic for pundits and politicians, north and south, to demagogue.

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The Trump administration just announced that the U.S. government will charge foreigners higher prices than it charges Americans for admission to U.S. national parks.

Tourism services are exports.

The U.S. Constitution prohibits export tariffs. Specifically, Article I, Section 9 says that “No Tax or Duty shall be laid on Articles exported from any State.”

Therefore, the differentially high prices charged to foreigners to buy this particular offering of U.S. tourism services are export tariffs.

I don’t doubt that every court in the land would find a way to prevent these differentially higher park-admission prices charged to foreigners from being classified as Constitutionally relevant export duties.  The courts would likely reach such a finding by declaring that tourism services, being services rather than something tangible, aren’t an “Article exported.” The fact that this is a distinction with no economic difference – a dollar’s worth of American-supplied tourism enjoyed by a foreigner has exactly the same value as does a dollar’s worth of American-supplied steel consumed by a foreigner – would not begin to be sufficient to sway a court.

Nor do I doubt that such differential pricing of admission to national parks might be a good idea if the goal is to price-discriminate in a way that increases the revenue earned by national parks. But, on the economic substance of the matter, these differentially higher park-admission fees are export tariffs. And by reducing the quantity of U.S. tourism services demanded by foreigners, these U.S.-imposed tariffs on exports of American tourism services increase foreigners’ demands for tourism outside of the U.S.

Put differently – and certainly contrary to Donald Trump’s intention – the U.S. government’s decision to raise the prices that foreigners pay for admission to U.S. national parks protects tourism industries in other countries no less than if foreign governments were to impose protective tariffs on their citizens’ purchases of American tourism.

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Brian Albrecht, Geoff Manne, David Teece, and Mario Zúñiga trace the development of the semiconductor industry. Here’s the abstract:

The semiconductor manufacturing industry exhibits unique competitive dynamics driven by Moore’s Law and Rock’s Law, which together impose exponentially increasing technological requirements and capital costs. These twin forces produce recurring “competitions for the market” rather than conventional price-based rivalry, with firms competing through massive preemptive investments in successive technology generations. In this environment, apparent market concentration and complex interfirm relationships likely reflect efficient organizational responses to extreme capital requirements and technological uncertainty. High returns in this industry typically represent Ricardian and Schumpeterian rents from innovation rather than monopoly profits. Standard antitrust metrics may mischaracterize competition in industries where technological discontinuities periodically reset market positions and where success depends on dynamic capabilities rather than static efficiency.

Michael Strain exposes the many errors that infect Michael Green’s absurd claim that the poverty threshold in the U.S. today is an annual income of $140,000. Four slices:

Green engages in a series of calculations that would earn a D in my master’s class. He concludes: “So when I say the real poverty line is $140,000, I’m being conservative.” Of course, poverty thresholds are inherently arbitrary. You’re free to argue that three-quarters of households are living in poverty — but that argument is absurd on its face.

Why? Because any poverty threshold that finds most households living in poverty is not analytically serious or practicable. The economist Ernie Tedeschi computes that around 75 percent of households earn less than $140,000. Moreover, as Tedeschi shows, if that’s your threshold, then you should be feeling good about the nation’s progress!

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The social scientist Scott Winship did the heroic work of replicating Green’s calculation. Winship shows that applying more reasonable data to Green’s equation can compute a poverty threshold as low as $24,470, far lower than Green’s choice of $140,000.

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Analysis by the economists Richard V. Burkhauser, Kevin Corinth, James Elwell, and Jeff Larrimore shows that poverty fell much further when broader definitions of income were used and when inflation was more accurately measured, falling from nearly 20 percent in 1963 to below 4 percent in 2019.

Standard economic analysis suggests that we should care more about consumption poverty than income poverty. The team of economists finds that consumption poverty fell from above 30 percent in the early 1960s to 2 percent in 2019.

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Tens of thousands of years ago, an approaching predator could end our lives. Perhaps because of that, we are hardwired to place greater psychological weight on risk than on safety. This may be why bad news sells and headlines never read “Airplane Lands Safely.”

But planes land safely every day. And the American dream is not dead — no matter how often low-quality analysis “demonstrates” that it is.

GMU Econ alum Jeremy Horpedahl explains that “your fridge is bigger and cheaper today, thanks to global trade and innovation.” A slice:

When Americans think about their refrigerator and other appliances, they shouldn’t think, “Economics is fake.” Instead, they should recognize that this is one area of their consumption that has become more affordable, thanks to globalization and other competitive forces, whereas housing, healthcare, and education have become less affordable. And while those services are an important part of the typical household budget, the story of increasing affordability for refrigerators is in no way unique for goods produced under a free market economy. Despite claims of economic stagnation since the 1970s, Marian Tupy has shown that finished goods have become increasingly abundant relative to wages since 1971.

While the long-term trends in the affordability of finished goods are favorable for consumers, there is one recent factor pushing in the opposite direction: tariffs. For example, a paper published in the American Economic Review showed that the 2018 tariffs on washing machines increased prices by about 12 percent. And while Figure 2 above showed increasing affordability of appliance prices, if we zoom in on the most recent years, the trends have started shifting in the wrong direction again after the much broader 2025 tariffs were imposed. Figure 3 shows that, after rising in tandem with almost everything else during the pandemic, appliance prices began to fall in 2022 and continued to decline through 2024, but then reversed in 2025. While the increase since March 2025 (before the biggest tariff announcements) has been somewhat small, it would have been much larger if we had expected the pre-2025 trend to continue.

Cato Trade tweets:

“If the guy who promised you lower prices then suddenly promises to raise prices and prices go up, well, guess what? That guy is going to get blamed,” @scottlincicome told @FoxNews about voters’ disapproval of President Trump’s handling of the economy.

It’s always good, on Thanksgiving Day, to revisit GMU Econ alum Ben Powell’s reminder of “the pilgrim’s real Thanksgiving lesson.”