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… is from page 295 of Milton & Rose Friedman’s great 1980 book, Free To Choose:

As the scope and role of government expands – whether by covering a larger area and population or by performing a wider variety of functions – the connection between the people governed and the people governing becomes attenuated. It becomes impossible for any large fraction of the citizens to be reasonably well informed about all items on the vastly enlarged government agenda, and, beyond a point, even about all major items. The bureaucracy that is needed to administer government grows and increasingly interposes itself between the citizenry and the representatives they choose. It becomes both a vehicle whereby special interests can achieve their objectives and an important special interest in its own right.

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Phil Magness eviscerates John Eastman’s attempt to defend the position that Trump’s IEEPA tariff are Constitutional.

Also from Phil Magness – here writing with Marc Wheat – is this clear explanation that Trump’s section 122 tariffs are also illegal. Three slices:

Section 122 allows a tariff lasting no more than 150 days to address a narrow set of problems, the most pertinent of which are “large and serious United States balance-of-payments deficits” (the other two cases — an imminent “depreciation of the dollar in foreign exchange markets” and creating an agreement with other countries to correct an “international balance-of-payments disequilibrium” — are less relevant to Trump’s arguments). A balance-of-payments deficit was essentially the natural economic consequence of a fixed exchange rate system where the value of the dollar was pegged to gold and other foreign currencies were pegged to the dollar. Since the direct convertibility of the U.S. dollar to gold was ended by the Nixon administration and never came back, Section 122’s balance-of-payments provision has never been used.

When prices are fixed by something other than market participants, surpluses or shortages inevitably result; a balance-of-payments deficit occurred when the official reserves of the United States, used to maintain the fixed exchange rate, were drawn down by the pressures of an overexpansion of the supply of dollars relative to the foreign demand to hold them. If sustained, this pattern could deplete the government’s reserve holdings in gold or other currencies, causing a balance of payments crisis. Under the Bretton Woods system, in place from 1945 to 1971, other governments could exchange their holdings of dollars for gold at $35 per ounce, drawn from U.S. government reserves.

Central banks have never been good at maintaining fixed exchange rates. Instead, their fixed-rate arrangements tend to break down, because they can’t resist overissuing their own currencies or simply because speculators fear they won’t stick to their commitments. The Bretton Woods system was no exception. Under pressure to help finance the Vietnam War and Great Society, the Fed created more dollars than foreign central banks were willing to accumulate. Instead, they cashed in dollars for gold.

When foreign governments chose to swap dollars for gold, the result could cause a “large and serious” drain on the United States’ official reserves. On its Official Reserve Transactions ledger, the U.S. Department of Commerce tracked the drain on its official reserves, which were known as “balance-of-payments deficits.”

…..

When Congress drafted Section 122 of what eventually became the Trade Reform Act of 1974, it clearly understood the difference between a “balance-of-payments deficit” and a balance-of-trade deficit. “A large decline in the U.S. net international monetary reserve position,” the bill’s authors explained, “would be evidence of a serious balance of-payments deficit.” An accompanying House committee report likewise takes “balance-of-payments deficit” to refer to a depletion of official reserves. (The same report also made clear that Section 122 was not to be used “for the purpose of protecting individual domestic industries from competition.”) The bill’s authors insisted, finally, that only a “substantial” balance-of-payments deficit that was likely to continue in “the absence of corrective action” could justify a Section 122 tariff — “a small or even a large balance-of-payments deficit of short duration” wouldn’t suffice. The Senate report on the bill even included a table depicting separate columns for the “trade balance” and the “balance of payments” from 1960–1974 to illustrate the distinctions in how each was measured.

…..

This technical economic distinction is not beyond the competence of courts to consider. American courts rightly seek to avoid in engaging in politics. The president will undoubtedly seek to take advantage of this fact by arguing that courts simply have no business questioning his determination that there is a “balance-of-payments” deficit because that determination is a political one left to his discretion by Section 122.

For the courts to accept this argument would be a dereliction of their duty to “say what the law is.” Despite some claims to the contrary, the role of the courts to assess the legality of the actions of the other branches, known as judicial review, was well established at the time of the Founding.

And, since the earliest days of our Republic, courts have relied on economists to settle disputes over technical economic terminology. In 1796 in a case called Hylton v. United States, Justice William Paterson consulted Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations, celebrating its 250th anniversary this year, for definitions of competing types of taxation.

If courts fail to play their crucial role as a last redoubt against illegal government action, the liberty of the people that government exists to secure will be lost. The Court’s decision in Learning Resources was an important but limited victory. Because Congress has chosen not to act to hem in the president’s unconstitutional actions, courts will have to continue to perform their role in our constitutional system so that the president will be constrained to his.

Here’s the abstract of a new paper by Bryan Cheang: (HT Scott Lincicome)

This essay argues that the notion of modest industrial policy, the idea that governments can lead structural transformation but remain modest, cautious, and adaptive, is incoherent and self-defeating. The very conditions that are said to demand modesty—radical uncertainty, complexity, and bounded knowledge—also render structural transformation implausible. If policymakers admit they are operating in unknown territory, then the idea that they can steer society in a coherent direction becomes less a policy strategy and more an article of faith. Yet this is precisely the tightrope today’s leading theorists attempt to walk. Dani Rodrik advocates a learning-oriented industrial policy while still gesturing toward ambitious structural change, seemingly hoping that modest means will deliver immodest ends. Mariana Mazzucato, for her part, insists the state must “pick a direction” and align society accordingly, but assures us this will be done inclusively and experimentally—as if consensus and coordination might emerge spontaneously on command. These contradictions are not incidental; they strike at the heart of the project. Industrial policy cannot be both radically uncertain and confidently directional. In the end, one cannot promise a revolution with a shrug. Advocates must choose: either scale down their ambitions or be honest about the scale of authority their vision requires.

Judge Glock reports on rising sales taxes. Here’s his conclusion:

The enduring mystery of the sales tax is why it never seems to go down. Other levies face frequent taxpayer revolts, but the hit to consumers from a penny sales tax is apparently abstract enough that most don’t notice it. Louisiana made one of the rare sales-tax reductions in recent years, in 2018, reducing its top rate by over half a cent. But this year, it returned to its previous rate of 5 cents as part of a general tax reform.

Even when politicians talk about the cost of living, the sales tax rarely comes up. Zohran Mamdani won the mayoral election in New York largely by promising to bring living costs under control, and other progressive city politicians have followed his lead. Yet none has suggested cutting the 8.875 percent surcharge that government adds to purchases. Instead, progressives in New York, like their counterparts nationwide, have pushed for new consumer taxes to fund their priorities, even while touting their affordability agendas.

The steady rise of sales taxes, along with their growing complexity, adds to the burden on businesses and consumers already strained by inflation. Politicians could act to ease that burden. It remains striking how few seem interested in doing so.

David French argues that Trump should have gotten Congressional approval before bombing Iran. Two slices:

Here’s the bottom line: Trump should have gotten congressional approval for striking Iran, or he should not have struck at all. And because he did not obtain congressional approval, he’s diminishing America’s chances for ultimate success and increasing the chances that we make the same mistakes we — and other powerful nations — have made before.

To make that argument is not to sacrifice our national interests on an altar of legal technicalities. Instead, it’s to remind Americans of the very good reasons for our country’s constitutional structure on matters of war and peace.

The fundamental goal of the 1787 Constitution was to establish a republican form of government — and that meant disentangling the traditional powers of the monarch and placing them in different branches of government.

When it came to military affairs, the Constitution separated the power to declare war from the power to command the military. The short way of describing the structure is that America should go to war only at Congress’s direction, but when it does, its armies are commanded by the president.

Perhaps the most important aspect of this constitutional structure is that it creates a presumption of peace. Our nation cannot go to war until its leaders persuade a majority of Congress that war is in our national interest.

…..

In 1848, at the close of the Mexican-American War, a first-term congressman named Abraham Lincoln wrote:

Kings had always been involving and impoverishing their people in wars, pretending generally, if not always, that the good of the people was the object. This, our convention understood to be the most oppressive of all kingly oppressions and they resolved to so frame the Constitution that no one man should hold the power of bringing this oppression upon us.

Those words were true then, and they’re true now. No matter what he thinks, Trump is not a king. But by taking America to war all on his own, he is acting like one.

“Bernie Sanders is lying about AI data centers.”

Megan McArdle isn’t buying the AI-spells-doomsday bit. A slice:

And remember, too, how limited our imaginations are in the face of a true technological revolution: Neither 18th-century artisans nor their industrial rivals could have deduced the five-day workweek, the interstate highway or the rise of mass higher education from the operations of a primitive textile mill. Whatever is coming, it will almost certainly be weirder and more surprising than any doom-filled prophecy or utopian fantasy you’ll read today.

National Review‘s Editors rightly decry many of the consequences of the release of the Epstein files. A slice:

Should Larry Summers have been pursuing an affair with an adult fellow economist to whom he was apparently a mentor? No, of course not. But should we have violated every rule and norm around how we typically handle raw investigative materials in a federal investigation in order to nail Summers for a lapse that has nothing to do with what was the purpose of the release of the files?

We got to this place because voices on the right — including some that now have significant responsibility in the administration — stoked lurid conspiracy theories about Epstein for years. Then, Democrats opportunistically picked up the mantra last year when they realized that the release of files was a way to damage Trump politically. The dam broke in Congress in part because no one trusted Attorney General Pam Bondi to handle the matter in a competent, aboveboard manner.

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… is from page 14 of Liberty Fund’s 2016 expanded English-language edition, brilliantly edited by David Hart, of Frédéric Bastiat’s indispensable work Economic Sophisms and “What Is Seen and What Is Not Seen”; specifically, it’s from Bastiat’s April 1845 essay “Abundance and Scarcity” (“Abondance, disette”):

But people will say: if foreigners swamp us with their products, they will carry off our money.

What does it matter? Men do not eat money; they do not clothe themselves with gold, nor heat themselves with silver. What does it matter if there is more or less money in the country, if there is more bread on the sideboard, more meat on the hook, more linen in the cupboards, and more wood in the woodshed?

DBx: Yes. Yet this reality – undeniable when stated as plainly as Bastiat here states it – is the core reality about trade that Trump does not grasp. Trump believes that we Americans get poorer whenever we buy imports with money if at least that same amount of money doesn’t return to America. Trump thinks that our wealth is the nominal amount of dollars that we currently own and possess within our borders.

In this matter, Trump is deeply mistaken. If you doubt my assessment, imagine that you lawfully owned and possessed, in the form of U.S. dollars, all of Jeff Bezos’s or Elon Musk’s wealth, but you are also stranded alone on a desert island with no hope of rescue. How rich would you be? Obviously, you’d be destitute. Money is valuable – it represents wealth – only insofar as it can be exchanged for real goods and services. A logical implication of Trump’s ‘theory’ of trade is that we Americans would be maximally enriched if we toil 24/7/365 producing goods and services for export, for which we receive only money from foreigners – money that we never, ever send abroad to purchase anything from foreigners.

Although Trump, his trade advisors, and his many MAGA cheerleaders appear incapable of realizing it, under the trade regime that Trump regards as ideal for Americans, we Americans would effectively work as foreigers’ slaves: Foreigners would get all the fruits of our labors while we would get nothing in return except scrip that is never presented to foreigners for redemption in anything other than scrip.

It’s an appalling, ludicrous belief, but one that ran through mercantilist writings.

Although this next point isn’t as fundamental as the one mentioned just above, it’s nevertheless important: Trump is also blind to the fact that dollars can and do return to the U.S. not only as demand for American exports of merchandise but also as demand for American exports of services, and as foreign investments in the U.S. Proof of this point is the fact that Trump incessantly complains about America’s merchandise trade deficits – an economically meaningless concept that nevertheless is a principal fuel for today’s U.S. trade ‘policy.’

In a single day I, or any other reasonably competent economist, could teach ordinary fifth graders to have a better understanding of trade than is possessed by the current president of the United States.

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Further, the legal precedent that Eastman relies upon involved arms sales – clearly a genuine foreign-policy issue in a way that Trump’s tariffs are not.

Editor, The American Mind

Editor:

Criticizing the U.S. Supreme Court’s ruling against Trump’s IEEPA tariffs, John Eastman asserts that Trump’s tariffs are “clearly” tools of foreign policy and, therefore, constitutional even without Congressional delegation (“The Tariff Wears Two Hats: What the SCOTUS Majority Overlooked,” February 24). Given that Mr. Eastman’s conclusion rests entirely on the assertion that Trump’s tariffs are “a tool of foreign policy,” it’s reasonable to expect that Mr. Eastman would have attempted to justify that assertion. But he doesn’t, beyond describing the revenues raised by the tariffs as being only “incidentally” related to the tariffs – a description, not incidentally, at odds with the White House’s own many boasts about the centrality of these revenues to the president’s economic policies.

Had Mr. Eastman attempted to demonstrate, rather than merely assert, that Trump’s tariffs are tools of foreign policy, he would have failed.

Because import tariffs are by their nature levies that affect domestic demands for foreign-supplied goods, tariffs affect foreign countries. This fact was as well known in the 18^th century as it is in the 21^st. And yet the drafters of the Constitution chose to invest the power “To lay and collect Taxes, Duties, Imposts and Excises” and “To regulate Commerce with foreign Nations” in Congress.

Even if Mr. Eastman is correct that Article II of the Constitution gives the president a “plenary and exclusive power” over foreign policy – and even if this power includes the imposition of tariffs – the mere fact that tariffs have effects on foreign countries clearly isn’t sufficient to give the president what Mr. Eastman supposes it gives, namely, unchecked power to impose tariffs as long as the president claims, or can be presumed to claim, that his tariffs have foreign-policy purposes of the sort that the framers had in mind when they wrote Article II.

To accept Mr. Eastman’s argument requires that we take the framers to have made no real, meaningful distinction between the foreign-policy powers that the Constitution gives to the president, and the power to impose duties, imposts, and excises, as well as to regulate commerce with foreign nations, that it gives to Congress. After all, absent such a substantive distinction, all the president must do to seize Congress’s power to levy tariffs and regulate international commerce is to mutter “foreign policy.”

That the framers carefully distinguished, as they did, the powers of the legislature from those of the executive implies that they understood that the mere fact that tariffs, as well as regulations of international trade, have effects on foreign countries is not sufficient to turn these commercial measures into foreign-policy measures.

So what of the substance of Trump’s tariffs? Is it plausible that the president imposed these duties chiefly for purposes of foreign policy rather than for domestic commercial reasons? No.

As already noted, the administration repeatedly boasted that these tariffs are a key tool for raising revenue. In addition, the White House also repeatedly insisted that these tariffs are vital measures for increasing domestic manufacturing output and employment. Neither of these goals is classifiable as “foreign policy” unless everything the government does is classifiable as “foreign policy.”

Another prominent – indeed, the predominant and express – goal of the tariffs is to reduce America’s goods trade deficits with each of the individual countries with which Americans trade. Uninformed people might assert that these bilateral goods trade deficits pose foreign-policy risks – but so, too, might uninformed people assert that foreign-policy risks are posed by income inequality, gay marriage, the legality of alcohol, free wi-fi, rap music, processed foods, and carbon emissions. More than mere assertion is necessary. And when one becomes informed about trade, one understands that the very concept of “bilateral goods trade deficits” is economically meaningless.

If courts are to allow the president to justify the imposition of tariffs as foreign-policy measures, they should require that the president do so expressly, substantively, and in a way that clearly distinguishes foreign-policy tariffs from the commercial ones that are envisioned by Article I of the Constitution. Even if we ignore the president’s threat to raise tariffs on the grounds that he was not awarded the Nobel Peace Prize, President Trump did not come close to meeting this requirement.

Mr. Eastman’s criticisms of the Learning Resources ruling all fail.

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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Bryan Riley tweets: (HT Scott Lincicome)

The idea that foreign capital inflows to the USA represent debt that “we owe” is 2/3 incorrect. And we would be in much worse shape w/out foreign purchases of government debt. The best response is less government borrowing. Not tariffs. Not taxes on foreign investment.

The Editorial Board of the Washington Post decries the IRS’s unlawful sharing of data with the Department of Homeland Security. A slice:

To err once might be human. To err “approximately 42,695 times” is to disregard the law.

A federal judge ruled this week that the Internal Revenue Service violated the law tens of thousands of times last summer when the agency shared confidential taxpayer addresses with the Department of Homeland Security for the purpose of rounding up illegal immigrants.

People illegally in the country won’t pay what they owe the government if they think doing so will lead to their deportation. The breach reflects an irresponsible attitude toward all taxpaying Americans who hand over personal data on the assumption their identifying details will remain private and secure unless important requirements are met.

In her Thursday ruling, U.S. District Judge Colleen Kollar-Kotelly said the IRS turned over thousands of addresses despite DHS failing to provide basic details to confirm that specific individuals were being targeted. The law is written to stop private information from getting caught up in such data mining exercises.

Katherine Mangu-Ward reveals the uncomfortable features that Trump’s ICE crackdown shares with China’s one-child policy: “Population control is technocratic hubris at its most intimate and brutal.”

GMU Scalia Law professor Ilya Somin argues that the U.S. bombing of Iran is an unconstitutional act of war. A slice:

Article I of the Constitution gives Congress the exclusive power to declare war. One can debate the extent to which presidents can initiate relatively small-scale military actions, and such debates have raged for decades. But this attack is very obviously large enough to qualify as a war. Thus, it just as obviously requires congressional authorization. And Trump didn’t get any, and indeed did not even try to do so.

Don’t take my word for the proposition that it’s a war. Take Trump’s! He himself has called it a war, and proclaimed that the objective is regime change.

The closest historical analogue is Barack Obama’s 2011 air campaign against Libya, which was also attempt at regime change carried out with air strikes. For those keeping score, I condemned Obama’s action and repeatedly criticized him for violating the Constitution and the War Powers Act (see also here). But Iran is a larger and more powerful nation than Libya, and thus this is likely to be an even bigger conflict. And, as I have said before, Obama’s illegal actions don’t justify Trump’s (and vice versa).

Jack Nicastro reports on the “acrimony between the federal government and Anthropic, which had been brewing for two months.”

George Will continues to excoriate the monster in charge at the Kremlin. A slice:

A constant of modern Russian history is the systemic stupidity and toadyism that tyranny breeds. In the 1930s, some of Joseph Stalin’s censors, who were more zealous than educated, reportedly (writes Stalin’s biographer Stephen Kotkin) forbade radio broadcasts of music by Franz Schubert, who died in 1828, for fear he might be a supporter of Stalin’s nemesis, Leon Trotsky, who was born in 1879.

Do not expect those who have risen profitably into Putin’s orbit to steer their obsessed benefactor toward what Trump’s National Security Strategy, published in December, calls “an expeditious cessation of hostilities in Ukraine.”

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…  is from page 4 of Milton Friedman’s 1967 “First Lecture” in a debate that he had with Robert Roosa, the proceedings of which are published under the title The Balance of Payments: Free versus Fixed Exchange Rates:

Fix prices — and the problems will multiply; let prices find their own level in free markets — and the problems will disappear.

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Mr. Donald J. Trump, President
Executive Branch
United States Government
1600 Pennsylvania Ave., NW
Washington, DC 20500

Mr. Trump:

Yesterday on Truth Social you again expressed opposition to the U.S. Supreme Court ruling against the tariffs that you imposed under IEEPA. In doing so, you wrote that “it doesn’t make sense that Countries and Companies that took advantage of us for decades, receiving Billions and Billions of Dollars that they should not have been allowed to receive, would now be entitled to an undeserved ‘windfall.’”

With respect, you are profoundly mistaken. What you wrongly describe as foreigners ‘taking advantage’ of us is foreigners offering us attractive deals. (Should we prefer that foreigners offer us unattractive deals?) Every cent of the “Billions and Billions of Dollars” that you mention is a cent paid voluntarily by Americans who choose to purchase imports.

Your assertion that foreigners “should not have been allowed to receive” those “Billions and Billions of Dollars” is really an assertion that your fellow Americans should not have been allowed to spend those dollars – their dollars, sir, not yours – as they judge best.

Forget your failure to understand basic economics, especially the fact that dollars that foreigners don’t spend on American exports are dollars invested in America. Instead, focus on the morality of the matter: What right do you have to tell your fellow Americans how they can peacefully spend the incomes that they earn? What moral precept authorizes you to sit in judgment of, with the power to forcefully override, how your fellow Americans conduct their economic affairs?

Even if, contrary to fact, such an arrogant exercise of power did no damage to the economy, it has no place in a free society. You should be ashamed of the contempt in which you obviously hold your fellow Americans, a majority of whom saw fit to entrust you with the power of the presidency. What a pity that, in return, you do not trust your fellow Americans even to spend their own incomes.

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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Arnold Kling – with an assist from Jim Gaffigan – writes insightfully about an inherent tension that has long run through modern higher education.

My intrepid Mercatus Center colleague, Veronique de Rugy, sees several red flags stuck to the Ex-Im-Bank-backed “Project Vault.” Two slices:

Project Vault is a government-backed commodity stockpile covering all 60 minerals on the U.S. Geological Survey’s critical-minerals list for private manufacturers. The federal government, through a $10 billion Ex-Im loan and roughly $2 billion in private capital, will purchase and store critical minerals in facilities across the United States. The $10 billion is a direct loan, not a guarantee, not insurance. Further, the loan is for 15 years, more than double the length of the bank’s previous largest deal.

Three commodity trading firms (Hartree Partners, Mercuria, and Traxys) will procure the minerals. Large manufacturers (Boeing, GM, GE Vernova, Google, and others) pay commitment fees and lock in a fixed purchase price, giving them the right to draw from the stockpile during supply disruptions. If they draw down materials during normal times, they must replenish them. If a major disruption hits, they can withdraw their full allotment at once.

I would like to flag several issues with this project.

New project, Old Patterns and Same Cronyism:

The architecture of Project Vault will be familiar to anyone who has studied agricultural price supports: the government finances and stores a commodity, private participants get guaranteed access at stable prices, and the taxpayer absorbs the losses when markets move the wrong way. Expect the same here.

Farm programs that began as emergency measures in the 1930s are still with us nearly a century later and form the backbone of one of Washington’s most entrenched lobbying complexes. Project Vault is being sold as a temporary response to a supply-chain crisis. So too were farm subsidies.

Those who follow Ex-Im closely will also recognize several of these names as perennial beneficiaries of the Bank’s financing, including Boeing (it’s as if the Bank doesn’t do anything if it doesn’t benefit Boeing). The cast of characters at the trough has barely changed. The only thing that’s changed is the justification on the placard.

Worth noting: Ex-Im Chairman John Jovanovic was previously an Investment Director at Mercuria Energy Group, where he managed investment and business building across North and South America. His former employer is now one of the direct beneficiaries of the largest loan his agency has ever issued. This doesn’t have to be an issue, but we may never know if it is as the person whose job it was to flag exactly this kind of concern if it arises is gone. In October 2025, Trump removed Ex-Im’s Senate-confirmed Inspector General, Parisa Salehi, who at the time was overseeing 15 open investigations into possible violations of federal law. Project Vault was announced weeks later. The Bank is now operating without independent oversight at the precise moment when it is taking on the largest and most complex commitment in its history.

…..

Reasonable people can disagree about the severity of China’s rare-earth dominance and the speed at which markets will correct it. But you don’t need to resolve that debate to see that Project Vault is the wrong answer. Even if the threat is exactly as dire as the hawks claim, the response should look nothing like what is being proposed. It should fix the permitting system that makes the United States the second-slowest country on earth to open a mine. It should rationalize the radioactivity rules that lock away the most accessible rare-earth feedstocks behind irrational regulatory barriers. It should establish a dedicated federal mining office, as Canada and Australia have done, so that companies face a coordinated approval process rather than a decade-long obstacle course. It should feature narrowly targeted defense procurement under the Defense Production Act for the handful of materials where military readiness genuinely cannot wait.

The Hoover Institution’s Philip Zelikow explains that Trump’s new tariffs – those imposed under section 122 of the Trade Act of 1974 – are also illegal. A slice:

Under fixed exchange rates, a “balance of payments deficit” or a “dollar drain” meant that the United States would have to devalue the dollar (against gold, and in foreign exchange) or hike interest rates. Otherwise, US gold reserves, backing the dollar, could not be sustained. This was the character of the culminating crisis in 1971.

Back then, the “balance of trade” was a different concept, measured differently. A main concern throughout the Bretton Woods era was that the United States was suffering a “balance of payments” deficit even if it was running a trade surplus. By the early 1970s, the balance of trade had moved into deficit too, so that our trade situation was not even coming close to offsetting the “balance of payments” problem. All this is quite clear in the Senate report on the bill that would become the Trade Act of 1974 (S.Rep. 93-1298, 26 November 1974).

When the Bretton Woods system was suspended and then plainly ended, replaced by the new system of floating exchange rates, delinked to gold, and with relatively free movement of capital, it became apparent that there was no longer such a thing as a “balance of payments” issue for the United States. The term was no longer meaningful. Milton Friedman had indeed argued, as far back as 1953, that if the price-fixing of Bretton Woods disappeared, worries about a “balance of payments” would automatically vanish as well.

Eric Boehm is highly critical – rightly so – of the Trump administration’s resistance to return the customs duties that it illegally seized through its unlawful IEEPA tariffs. A slice:

Discard the rule of law, and all the scaffolding that’s meant to make taxation look legitimate comes tumbling down. Taxation once again becomes indistinguishable from theft.

The Trump administration is now veering dangerously close to that edge as it plots various strategies to keep as much as $175 billion in illegally collected tariff revenue in the wake of last week’s high-profile Supreme Court ruling.

The White House is “scrambling” to find ways to keep that money, even as hundreds of American businesses are lining up for refunds, Politico reports. “Early ideas include policies to discourage companies from claiming their refunds, prevent the government from paying the money back or otherwise preserve at least some of the tariff revenue.”

Of the various schemes reportedly being batted around, I think my favorite is the idea of allowing “companies to jump to the front of what is expected to be a lengthy queue for refunds if they agree to forfeit some of the money to the government.”

Nothing says “this is a totally legitimate operation that deserves the public’s trust” like turning refunds into a backhanded shakedown scheme. Imagine how many complaints would flood the Federal Trade Commission’s website if a private company used that approach when issuing refunds for defective products or fraudulent transactions.

Scott Lincicome tweets:

The Trump administration collected billions in IEEPA tariff money from US companies. They LOST in 3 different courts, including SCOTUS. And now they’re trying to stall refunds.

I wish I could say I was surprised. 🙄

The Editorial Board of the Washington Post praises – rightly so – this:

The Labor Department published a rule Friday that would undo egregious attempts during the last administration to classify more workers as employees rather than independent contractors.

At the behest of union bosses seeking to expand their rolls of dues-paying members, President Joe Biden restricted who could be an independent contractor, even though he lacked the votes in the Democratic-controlled Congress to change the law.

The Trump administration announced last year that it would no longer enforce that rule while it drafted a replacement. The new version largely restores the status quo ante for independent contractors while giving employers greater certainty when classifying workers.

Speaking of the Washington Post, Nick Gillespie’s interview, conducted this past November, with that newspaper’s new opinion editor, Adam O’Neal, is well worth a listen.

Vance Ginn is correct: “Capitalism’s coalition is cracking — and that should worry us.” A slice:

True capitalism is grounded in private property, competitive markets, voluntary exchange, and the rule of law. It treats individuals as decision-makers in their own lives — not subjects of top-down control. It decentralizes power, rewards value creation, and invites experimentation, allowing people to say “yes” to opportunity without asking permission from bureaucrats or politicians.

Jacob Sullum decries Trump’s “habit of deploying wildly inaccurate ideological labels against people who disagree with him.”

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… is from page 37 of Benjamin Rogge’s October 4th, 1968, address “Speech in Honor of Leonard Read’s Seventieth Birthday” as this address is reprinted in A Maverick’s Defense of Freedom, the 2010 collection of Rogge’s essays edited by Dwight Lee:

For most of us, it is only with age, if ever, that we acquire the wisdom to be content to live under always imperfect rules that still permit us imperfect men to make our own imperfect decisions, with consequences for each man and for all men that no one can fully predict and that will always be something less than the New Jerusalem.