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Here’s the abstract of a new paper by Alexander Klein and Christopher Meissner:

We study the relationship between tariffs and labor productivity in US manufacturing between 1870 and 1909. Using highly dis-aggregated tariff data, state-industry data for the manufacturing sector, and a novel identification strategy, results show that tariffs reduced labor productivity. Tariffs also generally reduced the average size of establishments within an industry but raised output prices, value-added, gross output, employment, and the number of establishments. We also find evidence of heterogeneity in the association between tariffs and value added, gross output, employment, and establishments across groups of industries. We conclude that tariffs may have reduced labor productivity in manufacturing by weakening import competition and by inducing entry of smaller, less productive domestic firms. Our research also reveals that lobbying by powerful and productive industries may have been at play. The era’s high tariffs are unlikely to have helped the US become a globally competitive manufacturer.

Jeff Luse explains that “if Kamala Harris wants to lower energy costs in Puerto Rico, she should support the repeal of the Jones Act.”

Wall Street Journal columnist Jason Riley is unimpressed with Kamala Harris’s weak attachment to economic reality. Two slices:

The late Walter Williams, who taught economics at George Mason University for 40 years while also writing a syndicated newspaper column, liked to remind his students and readers that political leaders often exploit economic illiteracy to win votes. “I think it’s important for people to understand the ideas of scarcity and decision-making in everyday life so that they won’t be ripped off by politicians,” he once told me.

…..

Whatever her proposals, Ms. Harris’s overriding problem is that she can’t run away from the Biden administration’s record. Her campaign’s closing message is that Mr. Trump is a fascist threat to the republic, which is something you come up with when you can’t defend what your administration has been doing for the past four years about inflation, the economy, border security and other issues that voters care most about. Ms. Harris has spent a lot of time ducking serious interviews and deflecting tough questions so that she could focus on telling people what they already know about Donald Trump.

Kevin Hassett and Casey Mulligan are unimpressed with several Nobel laureates’ weak attachment to reality. A slice:

Proponents of the position that Ms. Harris’s economy would outperform Mr. Trump’s should show their work. If other macroeconomists quibble with aspects of our approach, we welcome scientific debate about it. Such debates are more consistent with the values that animate scientific discovery than ham-handed declarations, regardless of how many Nobel laureates sign on.

Tyler Cowen predicts that the global demand for U.S. dollars will remain high. A slice:

As for China, the third-largest debt market, it shows few signs of moving to a freer economy with open capital movements. That postpones the day when the world’s other largest economy can offer a potential rival to the dollar. If anything, Chinese governance seems to be growing more autocratic and less predictable.

At the recent BRICs meeting, there was much talk of alternatives to the dollar. Russia promoted the “Brics Bridge” idea, to limit the impact of dollar-connected international sanctions, but it does not seem to be taking off, largely because it has few practical benefits. Foreign countries still can curse the US, and then turn around and use its currency.

Gary Galles documents yet another instance of the government blaming the private sector for problems caused by government.

Clark Neily remembers IJ co-founder Chip Mellor.

“Grow the economic pie, don’t reallocate it.”

The Editorial Board of the Wall Street Journal rightly criticizes on-going attempts by so-called “teachers'” unions to protect their monopoly over K-12 education from competition. A slice:

Regarding school choice for children, teachers unions are best understood as Terminators, as in the movie series. They are relentless, and they won’t stop until any alternative to their education monopoly is killed. The latest example is Nebraska, where unions are pushing a ballot measure to repeal a modest K-12 scholarship program.

Thomas Gale Moore has died; David Henderson remembers him. A slice:

Tom was one of the early advocates of deregulation. At a forum on inflation held by President Ford in 1974, Tom circulated a statement calling for deregulation of transportation, airlines, energy, and a number of other sectors. (I’m going by memory here. The copy he gave me was destroyed in my 2007 office fire.) As I recall, he got the vast majority of economists, a group that included many Democrats as well as Republicans, to sign the statement.

Tom also wrote, for the second edition of the Concise Encyclopedia, the article “Global Warming: A Balance Sheet.” I reread his piece as background to this post. I find heartening how well some of his analysis holds up almost 20 years after he wrote.

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… is from page 345 of the 2011 Thomas Sowell Reader:

What is truly frightening is the casual ease with which so many people believe that they can define what is and is not a “service” to the country.

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… is a line from this recent Facebook post by my emeritus Nobel-laureate colleague, Vernon Smith:

Government supplies money in proportion to failure, the private sector supplies money in proportion to success.

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The Editorial Board of the Wall Street Journal rightly criticizes Donald Trump for his expressed admiration for dictators. Two slices:

The reason freedom-loving people don’t like talk like this is because it flatters Mr. Xi for his success in terrorizing his people “with an iron fist.” Mr. Xi may be a smart guy, but you don’t have to be brilliant to rule when you can arrest or purge anyone at any time. All you have to be is ruthless and remorseless.

Mr. Rogan gave Mr. Trump an opening to speak such a truth, but the former President immediately pivoted to talking about his opponents in the U.S. This fits his pattern of describing his domestic opponents in nastier terms than he does rulers who imprison their people on a whim or start wars that kill tens of thousands of people.

…..

It would be reassuring if Mr. Trump said, at least once in a while, that these dictators are dangerous and the enemies of liberty. One place to start would be speaking publicly for the release of publisher Jimmy Lai from unjust imprisonment in Hong Kong. That would send a message heard ’round the world.

Also criticizing Trump is National Review‘s Noah Rothman.

William McRaven, writing in the Wall Street Journal, justly castigates Trump for his boorishness and incivility. A slice:

More recently, Mr. Trump called Ms. Harris “mentally impaired” and a “s— vice president.” This is a former president of the United States, a man who might represent the nation again. And for those of you who dismiss this kind of language or, worse, defend it, if Mr. Trump is re-elected you shouldn’t be surprised if this kind of aberrant behavior continues. And everything about it will affect the future of the nation.

Reason‘s Jacob Sullum is correct about Trump’s contempt for the rule of law and the Constitution: “Despite his cluelessness, the former president’s inclination to punish constitutionally protected speech reflects his authoritarian disregard for civil liberties.” A slice:

Trump has repeatedly re-upped the idea that broadcast licenses should be contingent on whether they are used to air content that offends him. Last November, for instance, he complained that MSNBC “uses FREE government approved airwaves” to execute “a 24 hour hit job on Donald J. Trump and the Republican Party for purposes of ELECTION INTERFERENCE.” He declared that “our so-called ‘government’ should come down hard on them and make them pay for their illegal political activity.”

My intrepid Mercatus Center colleague, Veronique de Rugy, writes that the CBO “is likely underestimating the rise in interest rates due to debt.” A slice:

Now, Jack Salmon has a piece at the Liberty Lens Substack arguing that the CBO is indeed likely underestimating the path of interest rates. He writes:

Key to CBO’s long-term budget projections are its long-term projections of interest rates that affect the budget, including rates on various debt instruments issued by the Treasury Department. While the CBO’s interest rate projections for the coming decade show higher rates than over the past 30 years, rates on government securities are only forecast to be about a third of a percentage point higher over the entire 2024–2054 period of the projection compared to the 1994-2023 average (4.2% vs 3.8%).

In that post, Salmon focuses on why he thinks the CBO’s assumption about the impact that the U.S. growing debt-to-GDP ratio — from 100 percent to 166 percent of GDP in 30 years — will have on interest rates is off.

Roger Pielke praises “climate journalism done right.”

Glenn Moots explores the economics of so-called “price gouging.”

Jim Dorn reflects on his latest visit to Fudan University after 30 years.

Congratulations to Jay Bhattacharya!

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… is from page 98 of Virginia Postrel’s splendid 1998 book, The Future and Its Enemies:

Trade creates resilience, while economic busts and political crises function at home as well as abroad. “Self-sufficiency” merely adds to those shocks the ancient fears of famine, disease, earthquake, fire, and flood – and a cushion limited to whatever happens to be in the bioregion. In investment terms, this supposedly safe strategy amounts to an undiversified portfolio.

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Here’s a note to a new correspondent:

Mr. M__:

Thanks for your e-mail.

You write that Phil Gramm and I “can’t get around Robert Lighthizer’s point that tariffs in the Nineteenth century were significantly higher than today…. These tariffs kept our great-great grandparents from dealing with the breakneck economic disruptions forced on us now by our current low tariffs.”

With respect, I disagree.

First, the economic change that you describe as being “forced on us” is, in every case, the result of choices that our fellow Americans make about how to spend their money – money, not incidentally, that they rather than others have earned. If you have a gripe, it’s ultimately not with imports or low tariffs but, instead, with each of our fellow citizens who chooses to spend his or her money in ways that you might disapprove of but that that person believes is best for him or her (or for his or her family).

Second, Lighthizer’s point isn’t so much that 19^th-century tariffs protected Americans from economic change as it is that those tariffs promoted industrialization that presumably wouldn’t have otherwise occurred. There is much tension between the argument, on one hand, that higher tariffs are justified as a means of fueling American economic growth, and, on the other hand, that higher tariffs are justified as a means of slowing the pace of economic change.

Third, late 19^th-century and early 20^th-century America was almost certainly subject to economic change that was as fast, momentous, and disrupting as that which occurs today. Americans in the half-century following the U.S. civil war saw the rapid spread of the telegraph, railroad, steamship, and refrigeration, the arrival of telephones, automobiles, motorized farm tractors, and airplanes, the electrification of factories, and the tapping of petroleum for fuel. It also witnessed what the economic historian Robert Higgs calls “the greatest volume of immigration in recorded history.”*

And then there’s this, from economic historians Kevin O’Rourke and Jeffrey Williamson:

The World Bank reports that tariffs on manufactures entering developed country markets fell from 40 percent in the late 1940s to 7 percent in the late 1970s, a 33 percentage point decline over thirty years. While impressive, this spectacular postwar return to “free trade” from interwar autarky is still smaller than the 45 percentage point fall in trade barriers between 1870 and 1913 due to transportation improvements.**

Government-imposed barriers to trade were higher in the late 19^th century than they are today, but the remarkable decline brought about back then by improvements in transportation (and communication) in natural trade barriers nevertheless ensured rapid globalization.

I see no good reason to suppose that we Americans today are suffering either inability to grow economically or historically unique rates of economic change brought about by globalization.

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

* Robert Higgs, The Transformation of the American Economy, 1865-1914 (New York: John Wiley & Sons, 1971), page 23.

** Kevin H. O’Rourke and Jeffrey G. Williamson, Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy (Cambridge, MA: MIT Press, 1999), page 36.

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… is from pages 236-237 of the late Robert Nozick’s splendid 1989 volume, Examined Life (footnote deleted):

The murder of two thirds of European Jewry during the Second World War as part of the determined attempt to annihilate it completely – now known as the Holocaust – is so momentous an event that we cannot yet grasp its full significance. It is difficult enough even to chronicle what occurred – knowledge of much of the suffering and bestial cruelty has disappeared along with its victims – and simply reading the details staggers and numbs the mind: the wanton cruelty of the German perpetrators in continual beatings, the forcible herding of people into synagogues then set on fire to burn them alive there, dousing gasoline on men in prayer shawls and then burning them, dashing children’s brains against walls while their parents were forced to watch, so-called “medical experiments”, machine-gunning people into graves they were forced to dig themselves, ripping beards of of old men, mocking people while inflicting horrors on them, the inexorable and unrelenting organized process that sought to destroy each and every Jew and to degrade them completely in the process, the lies about resettlement in the east in order to maintains some hope and partial cooperation, calling the street from the Treblinka railroad station to the gas chambers through which the Jews were force to walk naked Himmelfahrstrasse, the street to heaven – the list is endless, and it is impossible to find one particular event or a few to encapsulate and symbolize all that happened.

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Former U.S. Senator Pat Toomey (R-PA) eloquently exposes some of the many errors in Donald Trump’s case for protective tariffs. A slice:

As I tried to explain to Mr. Trump when he was president, another country’s misguided decision to tax its citizens on what they buy from American manufacturers isn’t a good reason to punish Americans who wish to buy that country’s products. But Mr. Trump is determined to punish American consumers for the misfortune indirectly imposed on our export-heavy manufacturers. This is his idea of fairness.

Mr. Trump sees low tariffs as a concession the U.S. makes to other countries to our own detriment. But low taxes on imports give American consumers more choices, cheaper prices and a higher standard of living. Low tariffs also make American manufacturers more competitive: Imports and foreign competition allow for low input prices. Americans benefit the most from low tariffs.

Mr. Trump’s reciprocal tariffs would effectively allow other countries to determine how the U.S. taxes its own citizens. So much for America first. And Mr. Trump often contradicts himself on reciprocity. On a trade-weighted basis, the U.K., Europe and Canada all impose lower taxes on American manufactured goods than the U.S. imposes on comparable imports. Mr. Trump isn’t proposing that we match their lower tariffs, but to add another 10 percentage points—minimum—to the tariffs we impose on Americans who buy goods from Europe and Canada.

Phil Magness, at his Facebook page, makes a fair point in response to a recent essay, at The Bulwark, by Shikha Dalmia:

There are points in Shika Dalmia’s piece about the election that resonate, and she correctly notes that some libertarians have blind spots to Trump’s deficiencies. She also overstates her perceived obligation to vote for Harris, euphemizes Harris’s many faults, and denigrates those of us who choose neither.

But my real objection to it comes from passages such as the one below. Its text suggests she has simply adopted a number of stances from the political left that she’s now smuggling into her anti-Trump arguments.

It also happens to be factually wrong on its main claim. The 1619 Project was not about giving African-Americans “cultural space” to interpret the past. Most of the 1619 Project’s “interpretations” were not even from African-American perspectives – they came from the New History of Capitalism school, which is overwhelmingly comprised of white male ideological leftists at elite institutions. Other aspects of its historical account outside of slavery came from historians like Kevin Kruse, another white male leftist at an elite institution.

By attacking and denigrating those of us who pointed out historical errors at the core of the 1619 narrative, Dalmia owes it to her readers to at least make a factually sound case when she presents a defense. She has not done so.

Wall Street Journal columnist Mary Anastasia O’Grady writes insightfully about immigration. A slice:

A first step toward a solution is to acknowledge the role of a soft labor market in bringing the numbers down. During times of high demand for employees in the U.S., the word goes out on migrant communication channels. These networks function extremely well. A young man in Tegucigalpa, Honduras, knows the restaurant in Chicago, Phoenix or San Francisco where he will find an opening for a busboy. When opportunities dry up, the word also goes out. The U.S. economy needs immigration, and the ebb and flow of humans is the market responding to demand.

The Biden administration’s decision to use legal parole to accept 30,000 migrants a month from Venezuela, Cuba, Haiti and Nicaragua is a common-sense and humane approach to managing migration. Applicants file with Homeland Security, not the State Department, for lawful U.S. entry from their home countries and if approved can live in the U.S. for two years. They must have a U.S. sponsor who can show adequate assets and income to support them. Contrary to nativist claims, those accepted pay their own airfare. Ukrainians also qualify for parole.

Arnold Kling:

I want to articulate two reasons for government failure. One is that without the profit incentive, government selects for the wrong behavior in managers. The second reason is that government tries to do too much. As a sprawling enterprise, government is bound to be clumsy.

George Leef on Arnold Kling.

GMU Econ alum Dominic Pino uncovers evidence that Lina Khan doesn’t understand plain English. (HT Dan Klein)

Here’s Timothy Taylor on the economics of AI. A slice:

To put it another way, the economic issues about AI do not involve the capabilities of the technology in splendid isolation; instead, it’s how AI technology interacts with workers and consumers, with production and consumption of goods and services. Some tasks that workers currently do will be replaced, but possibilities for brand-new goods and services, as well as improvements in existing ones, will be created. I do not pretend to know how it will all work out in the decades to come, but I do know that in the globalized world economy, the AI cat is already out of the bag. Paul Romer (Nobel ’18) offered a pithy aphorism  a few years ago: ”Everyone wants progress. Nobody wants change.” Alternatively, one might say that some folks are fearful or hesitant about change until or unless society or government has full control over the direction of change and complete knowledge of its future effects–in which case, of course, it barely qualifies as “change” at all.

Jim Bovard rightly warns us to fear those who promise us “freedom from fear.”

Tyler Cowen urges Effective Altruists to learn some finance.

Jay Bhattacharya describes the House report on HHS covid propaganda as “devastating.” Here’s his conclusion:

Probably the most important recommendation: HHS should never again adopt a policy of silencing dissenting scientists in an attempt to create an illusion of consensus in favor of CDC groupthink.

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… is from page 29 of my friend, co-author, and former professor Randy Holcombe’s superb 2019 book, Liberty in Peril: Democracy and Power in American History:

Concepts like social welfare, or the general welfare, or the public interest, are discussed often as if some measure of the welfare of a group of people exists that goes beyond the welfare of the individual members of the group. In fact, the welfare of a group is nothing more than the aggregate of the welfare of each member of the group. It makes no sense to talk about the welfare of a group of people independently of the well-being of the group’s members. A group is better off when its members are better off; it is worse off when its members are worse off. This leave some ambiguous situations in which changes might improve the well-being of some group members while harming others, but in those cases, if one wants to say something about the group’s welfare, any conclusions must be based on a comparison of the value of the gains to some people against the losses to others.