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Charles Lane describes Trump’s self-destructive politics. A slice:

Putting more upward pressure on costs, Trump intensified an impulsive trade war, including import surcharges of up to 12.5 percent on dozens of countries. He targeted Canada with verbal abuse and a 50 percent levy on $20 billion worth of imports — which Canada matched (minus the verbal abuse). Maine and Michigan, both pivotal to control of the Senate, got hurt. Trump walked back some tariffs to help Collins, but it might have been too little, too late.

So much for ending “Bidenflation.” Then there was Trump’s ego-driven meddling in GOP candidate selection. Not since Caligula tried to make his horse a consul has a leader chosen so unwisely. Incumbent Sen. Thom Tillis of North Carolina could have won reelection. But the president threatened to punish his occasional deviations from the Trump line by backing a primary challenger, and Tillis opted not to run. Now, Democrat Roy Cooper is well ahead of the nonentity Trump supported, Michael Whatley.

In Texas, Sen. John Cornyn could have coasted to a fifth term; Trump backed the scandal-plagued but “loyal” Ken Paxton, who won the GOP primary. Paxton is struggling, predictably, against Democrat James Talarico.

Dan Hannan warns of Trump’s fiscal incontinence. A slice:

Mitt Romney memorably pointed out that Obama had borrowed more than all his White House predecessors put together. Donald Trump was emphatic about Obama’s record. “Barack Obama has doubled our national debt. Doubled it.”

That was in 2016. Where are we 10 years on? Well, it turns out that Trump has now borrowed more than all his White House predecessors put together, including Obama. Trump, one might say, has doubled the national debt. Doubled it.

Both presidents might plead mitigating circumstances. Obama could point to the banking crisis, Trump to the pandemic. But neither man was ultimately prepared to make the unpopular decisions, including on Medicare and Social Security, that would allow the federal government to live within its means again.

Russ Roberts talks with Joseph Francis about the alleged “China Shock.”

Ilya Somin, a colleague over in GMU Scalia School of Law, explains that “Trump is using a trade law relic to illegally punish Canada.” A slice:

They are illegal for multiple reasons, part of an ongoing effort by this administration to usurp Congress’ constitutional authority over tariffs. In addition, they harm the U.S. economy and poison relations with a key ally. Section 338 of the 1930 Tariff Act has never been used by a president to enact tariffs before; Philip Zelikow, a conservative trade policy expert and former Bush administration official, has shown that Section 338 was superseded by legislation enacted in 1962 and 1974.

Even if Section 338 is still operative, Trump’s tariffs on Canadian goods violate its requirements. As the complaint explains, the Canadian trade measures cited by Trump as justification for the new tariffs do not discriminate against U.S. goods; Section 338 can only be used against discriminatory policies. Some retaliate against previous tariffs imposed by Trump. Most do not actually treat U.S. goods less favorably than imports from many other countries. In addition, the Section 338 tariffs go well beyond “offsetting” Canadian measures, violating another requirement of the law. They impose the maximum 50 percent rate on all covered goods, even though the Canadian tariffs in question are lower and do not cover as wide a range of products. Some of the Canadian measures are not even import restrictions at all, but merely decisions by Canadian provincial governments to stop purchasing U.S. alcoholic beverages for their government-owned liquor stores. Consumer decisions to stop purchasing a given product are not discriminatory restrictions on trade. Otherwise, such “discrimination” would occur anytime a foreign government chooses to buy anything from a non-American producer when there are U.S. producers that sell similar products.

Here’s the abstract of a new paper by Richard Baldwin:

This paper argues that globalisation’s frontier has shifted from manufacturing GVCs to services GVCs: from the Global Factory to the Global Office. While the Factory remains larger in gross trade, the Office is growing much faster. A heatmap of trade in intermediates shows that the Factory is bloc-shaped and dominated by China, whereas the Office is star-shaped and dominated by America. Gravity estimates show that distance matters less for Office exports, but time zones matter more: each hour of time-zone separation reduces Office exports by roughly 4%, while having no effect on Factory exports. Importantly, all of the world’s export-linked net job creation between 2008 and 2022 occurred in digitally delivered services rather than manufacturing, and trade-linked service jobs command higher average pay globally. The Factory-to-Office shift is also reshaping development. Most emerging economies have seen export-led growth tilt towards services, but their service exports are not yet large enough to drive overall GDP growth the way manufacturing did historically. The big picture is that globalisation’s second unbundling is running out of steam even as its third unbundling is powering ahead. The paper, which raises more questions than it answers, closes with the conjecture that the future of trade is services.

The Washington Post‘s Dominic Pino – a GMU Econ alum – peels back the layers on an effort to repeal the Onion Futures Act. A slice:

Americans can trade futures contracts for any agricultural product — except onions. Onion futures have been forbidden since 1958. Buy and sell class IV milk or 90 percent lean beef trim futures to your heart’s content, but dare to trade in expected onions and you can be fined up to $5,000.

In 1955-56, a pair of commodities traders named Vincent Kosuga and Sam Siegel worked to corner the market on onions. They bought massive quantities of the bulbs, raising the price. Then, they bet in the futures market that onion prices would fall — which they knew would happen because they sold off all their onions at once.

In 1955-56, a pair of commodities traders named Vincent Kosuga and Sam Siegel worked to corner the market on onions. They bought massive quantities of the bulbs, raising the price. Then, they bet in the futures market that onion prices would fall — which they knew would happen because they sold off all their onions at once.

Rep. Robert Griffin (R-Michigan) stressed the onion industry’s support for banning onion futures. “The onion growers have never had a Government subsidy or price support and they are not asking for one,” Griffin said. “In light of the millions of dollars we appropriate annually to support the price of other commodities, surely this one request on the part of the onion farmer is entitled to the sympathetic ear of Congress.”

It was an impressive political accomplishment. Restricting futures trading had been fertile ground for legislation, with around 200 bills introduced between the 1880s and the beginning of federal regulation in 1922. But the ban on onion futures was the first to become law.

Proponents understood the value of futures markets in general. They help stabilize markets and enable price discovery. But they argued that onions were different. “Futures trading in onions, because of the small volume and perishable nature of the crop is not an economic tool, but a gambling device for professional speculators,” said Rep. Gracie Pfost (D-Idaho). The Agriculture Department told Congress that only 5 percent of the volume of onion futures trading involved hedging by onion growers.

But Kosuga was an onion grower, and Siegel was a produce wholesaler. And the Commodity Exchange Authority, the Agriculture Department agency that regulated futures trading at the time, punished them. In an administrative proceeding, they were found to have engaged in market manipulation and were suspended from participating in contract markets.

Congress, however, had settled on a simple story: honest farmers versus reckless speculators. Once that was established, onion futures were cooked.

Agustina Vergara Cid rightly criticizes the collectivism espoused by the illiberal and economically illiterate J.D. Vance. Here’s her conclusion:

If Vance identified the essence of socialism, he would have to condemn both his own policies and the worldview that subjugates individuals to his nationalist agenda.

You can’t defeat socialism with an alternative form of collectivism, only with its opposite: the principle that the individual is not a means to any group’s end. That means protecting each person’s right to trade, hire, and associate with whomever they choose, and to live by their own judgment so long as they respect others’ rights. This is America’s founding premise, and we should embrace it instead of Vance’s or anyone else’s rehashed versions of the very premise it stands against.

After 18 years at the Institute of Economic Affairs, Kristian Niemiętz is moving on. Here’s a slice from his retrospective:

Individually, most of our opponents make little difference, because they promote ideas which are already fashionable, and which would be there with or without them. The marginal benefit of one more socialist, one more Greta Thunberg fan or one more person defending the NHS is close to zero. Classical liberalism and free-market economics, on the other hand, are so unfashionable and so counterintuitive that every supporter counts. These causes could very easily drop out of the national conversation altogether, and had there been no IEA over the past 18 years, they might very well have.

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… is from page 272 of Samuel Gregg’s superb new book, The Civilization of Commerce; this quotation follows Gregg’s mention of Hayek’s observation that “We owe our freedom to restraints on freedom”:

As such, commercial society demands much of us: to decline to enslave ourselves to immediate desires, short-term considerations, and the lies of relativism; to embrace the virtues of prudence, magnanimity, and benevolence, especially when it seems expedient to set such habits aside; and to be wise and virtuous people, however exalted or humble our place in society might be.

DBx: Yes.

For an extended investigation into the bourgeois virtues which are foundational to a peaceful and prosperous market-based society, see Deirdre McCloskey’s 2006 book, The Bourgeois Virtues: Ethics for an Age of Commerce.

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Tyler Cowen appropriately singles out, for praise, Phil Magness for being among the first to flag the increasingly obvious tendentiousness (to put it politely) of the “research” produced by the likes of Thomas Piketty, Emmanuel Saez, and Gabriel Zucman.

The Editorial Board of the Washington Post explains what shouldn’t – but, alas, what nevertheless does – need explaining: “A government can tax wealth. It can’t make wealth stay.” Two slices:

The Bay State offers a warning about treating wealthy residents as an inexhaustible source of revenue. Massachusetts voters approved a constitutional amendment in 2022 imposing an additional 4 percent tax on annual income above $1 million. The tax has raised billions for education and transportation. The costs took longer to appear.

Internal Revenue Service data show that Massachusetts had almost 94,000 tax returns reporting at least $1 million of income in 2021. By 2023, that population had fallen by roughly 12,700, or 13.5 percent. During 2023, the first year of the surtax, Massachusetts lost a net $4.2 billion in adjusted gross income to interstate migration. High earners accounted for a disproportionate share of the lost income.

…..

The Golden State is unusually dependent on a small population of affluent taxpayers and volatile capital-gains income. The richest 1 percent provide roughly 40 percent of California’s personal income-tax revenue. Losing even a handful can punch an enormous hole in future collections.

Their departure also takes more than individual income-tax payments. Entrepreneurs create companies. Investors finance start-ups. Wealthy residents employ people, purchase services and make charitable contributions.

Nor should Californians assume “one time” means the political appetite for wealth taxes disappears. Phineas Baxandall of the Massachusetts Budget and Policy Center, a prominent supporter of Massachusetts’s millionaire surtax, was recently asked about bringing a California-style wealth tax to Massachusetts. “There’s nothing magical about the number 1 billion,” he told the Boston Globe. “Maybe the cutoff is 100 million.”

That’s how the dynamic works: Establish the machinery and political precedent for confiscating wealth, and today’s extraordinary levy on billionaires can become tomorrow’s argument about whether $100 million, or even $1 million, is a more appropriate cutoff.

C. Jarrett Dieterle reports on yet another example of how labor unions hurt many of the workers that these unions claim to help.

Wall Street Journal columnist Allysia Finley warns the GOP that its current strategy of obsessing over MAHA and other “polarizing furies” is a political loser. A slice:

To understand how mistaken this is, look no further than Texas GOP Senate nominee Ken Paxton. The Texas attorney general has tried to massage issues near and dear to the MAHA movement by targeting makers of toothpaste (for fluoride), cereal (food dyes) and clothing (chemicals), among other businesses.

“Too many corners have been cut by corporations in this country, and I will continue to hold them accountable,” Mr. Paxton said in a press release last month announcing an investigation into Hanes and Fruit of the Loom over—wait for it—potential “toxic chemicals” in children’s underwear.

Maybe Mr. Paxton thinks targeting business will distract voters from his personal baggage, including impeachment on corruption allegations by the GOP-led Texas House. (The Senate acquitted him.) As he has amped up his antibusiness campaign, his polling numbers have slid.

Then there’s Kansas GOP Sen. Roger Marshall, who has sought to tap into anger at Wall Street by assailing big banks and credit card companies as “loan sharks.” He has backed a 10% cap on credit-card interest rates and sponsored a bill with Illinois Democrat Dick Durbin to regulate credit-card payment networks.

Recent polls show the incumbent trailing Democrat Adam Hamilton in a state that hasn’t elected a Democrat to the Senate since 1932 and that Mr. Trump won by 16 points in 2024. One reason is reports that while practicing medicine, Mr. Marshall sued patients over unpaid bills and charged them annual interest up to 18%. Who’s the loan shark?

Like other Republicans in the heartland, Mr. Marshall has been hurt by the Trump tariffs and immigration raids. Taxing imports is unpopular beyond a thin slice of Republican voters. So is demonizing and deporting foreign workers who haven’t committed a crime.

Vice President JD Vance last month announced a suite of actions that make it harder for skilled immigrants to work legally in the U.S. He derided these immigrants as “indentured servants.” What happened to Mr. Trump’s pledge to build a wall with a “big beautiful door”? The door that his team is building goes only one way—out.

Richard Fulmer’s random thoughts are excellent. A slice:

– In a free market economy, voluntary exchanges don’t take place unless each party to a transaction believes that it will benefit them. No violence is involved. By contrast, violence is implicit in a system that forbids such exchanges.

– Auckland’s housing prices were among the highest in the world. Then the city eased its housing regulations. What followed was a building boom and more affordable housing. It turns out that if you make homebuilding legal, people build homes. Who knew?

– A lot of political unrest comes from people with worthless college degrees who have no skills that anyone is willing to pay for.

– Adam Smith warned that businessmen seldom meet without conspiring against the public good. But he went on to say that the government shouldn’t help them do so. Many of the government’s regulations do just that by restricting competition and innovation to protect incumbent firms.

– Progressives see millionaires and billionaires as a policy failure – one they plan to correct. Yet, they propose to pay for their programs by taxing the same people they want to eliminate. Perhaps they’re not as concerned about sustainability as they claim.

For the file labeled ‘Reality isn’t optional, but government pretends otherwise’: “Panic and Anger Spread as Europe’s Great Pension Covenant Unravels.”

Wall Street Journal columnist Mary Anastasia O’Grady writes of the hope that Maria Corina Machado’s return to Venezuela brings to the people of that country. A slice:

María Corina Machado finally made it back to Venezuela after 10 months in exile. After an arduous four-day journey from Panama City, on Oct. 25 the opposition leader walked into the Sanctuary of the Divine Shepherdess in the city of Barquisimeto. It was her eighth return attempt since August. To succeed, she had to overcome threats from the dictatorship in Caracas and U.S. attempts to thwart her homecoming.

After President Trump used the U.S. military to remove dictator Nicolás Maduro from power in January, Venezuelans expected Washington to set up new elections. But the Trump administration has been dragging its feet. Ms. Machado’s sudden and dramatic appearance on a Sunday at one of the most important Catholic shrines in the country could change that. It’s the most hopeful the nation has felt since Mr. Maduro was carried away by the Americans to stand trial for drug trafficking in New York.

Enthusiasm among Venezuelans for Mr. Trump waned this year after he made deputy dictator Delcy Rodríguez the interim president and began cutting sweetheart oil deals with her. He calls her “terrific,” and the U.S. says she’s doing what it asks. But the repression continues and the regime still holds 322 political prisoners according to the nongovernmental organization Foro Penal. In January Mr. Trump said Ms. Machado doesn’t have the “respect” necessary to lead the nation. Events of the last week prove him wrong.

Ms. Machado gets high marks for her determination. Her journey home took her through Colombia and across the Venezuelan border into the state of Táchira. Planners understood that maximum secrecy was crucial. A source confirmed to me that no planes were used on the trip despite press reports to the contrary. In the final phase, the elite international team that escorted her had to dodge Venezuelan security forces and duck police inspections at checkpoints as it smuggled her north.

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… is from page 100 of Thomas Sowell’s 2018 book Discrimination and Disparities:

There has never been a shortage of people eager to draw up blueprints for running other people’s lives.

DBx: Indeed so. And, dismayingly, in democratic societies these blueprint-bearing busybodies are typically called “public servants.” A more accurate descriptor of these hubris-lathered individuals is public pests.

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Here’s a letter to my long-time protectionist antagonist.

Mr. McKinney:

Thanks for sharing Oren Cass’s latest. I’m unpersuaded.

Asking “how could anyone levelheaded favor the consumer welfare standard,” you point approvingly to this passage from Cass’s essay:

The market fundamentalism of the consumer-welfare-maximizing free-traders insists that it does not matter what other countries do, all that matters is getting cheaper stuff.

Cass again slays a straw man.

When Cass says that the consumer-welfare standard aims only at “getting cheaper stuff,” he casts the case for free trade as morally deficient (or at least naïve) because, in his telling, that case ignores individuals’ higher, non-material values – values such as job security. Cass, however, misunderstands the root rationale of the consumer-welfare standard. He incorrectly believes that by “consumption,” we free-market advocates mean only material goods and services that readily come to mind as being exchanged in commercial markets. Yet in reality we mean something more general: ends, whatever these ends might be, as long as they are peaceful.

The consumer-welfare standard says nothing about the contents of individuals’ ends. Instead, it insists that whatever are the contents of these ends, each individual should have maximum freedom to pursue his or her ends, constrained only by the equal and like freedom of others, without the legislature, bureaucracy, or courts elevating the ends of some persons over those of other persons.

When, for example, protectionists demand tariffs to protect manufacturing jobs, they unctuously cast themselves as champions of workers who value something ‘higher’ than ‘mere’ consumption – in particular, specific kinds of employment or job security. This ‘higher’ value allegedly is ignored by us vulgar louts who defend the consumer-welfare standard. But it’s not.

The consumer-welfare standard – and the resulting case for free trade – says only that the ends of individuals who pursue opportunities opened to them by low-priced imports are of equal standing with the ends of workers who want greater job security.  Tariffs that protect particular jobs elevate the ends of some persons (protected workers) over those of other persons (would-be buyers of imports) by forcing would-be buyers of imports to subsidize protected workers’ increased job security. Cass and other protectionists see and celebrate the satisfaction enjoyed by protected workers who don’t have to find different jobs. But these protectionists ignore the resulting dissatisfaction suffered by these workers’ fellow citizens.

In a free market, workers are, and ought to be, as free to pursue the end of greater job security as are their fellow citizens to pursue whatever particular ends they choose by purchasing imports. And workers can pursue this end by offering to accept lower wages in exchange for greater job security. Workers, in short, can ‘consume’ greater job security if they are willing to pay the price for it. The consumer-welfare standard simply requires that, if workers wish to pursue non-material ends such as greater job security, they must do so with their own money, just as consumers who wish to pursue material ends must do so with their own money.

So when Cass and other protectionists pose as morally superior to free traders, don’t buy it. Contrary to their self-flattering presumption, these protectionists don’t champion the pursuit of ‘higher’ ends over ‘lower’ ends. Instead, they champion some fellow-citizens’ ends over the ends of other fellow citizens. Or, put differently, they champion special interests over the public interest.

Sincerely,
Don

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GMU alum Tom Savidge is no fan of the latest California proposition – Proposition 40 – to soak the rich.

Andrew Stuttaford reports the shocking – shocking! I say – surprise that soaking the rich in Britain drives the rich from Britain.

The Wall Street Journal‘s Editorial Board explains that “GDP growth comes in strong at 3.4% and would be stronger without tariffs and deportation.” A slice:

Mr. Trump says the strong GDP growth is evidence his border taxes are working. Sorry, no. Tariffs are a drag on growth. Investment in manufacturing plants declined 4% in the third quarter and has fallen 36% in his second term. Border taxes have increased uncertainty and business costs, which make it harder for manufacturers to invest.

While the President might point to a new steel plant owing to his 50% steel tariffs, how much investment isn’t happening because of tariffs? U.S. steel prices have increased 52% over the past year and are about two-thirds higher than in Europe. That’s a killer for U.S. makers of appliances, machinery and electric power equipment.

The other major drag on growth is housing, which subtracted 0.12 percentage points from third-quarter GDP. Higher interest rates are the main culprit, but the silver lining is that the housing slowdown has freed up workers for other projects like data centers. Construction firms say they struggle to find workers because of an aging workforce and deportations.

Nearly two-thirds of builders said immigration enforcement is affecting their workforce, compared to 13% a year ago, according to a John Burns Research and Consulting survey. Immigration raids have forced beef processing plants to reduce production. One result: Higher beef prices. The raids have also become a liability for Kansas GOP Sen. Roger Marshall.

“These ICE operations are having a massive chilling effect on the legal, documented, skilled workers that put beef on the table and keep the cattle supply chain moving,” cattle industry groups in Texas, Oklahoma and Kansas warned last month. “These types of disruptions will lead to higher beef prices for consumers.”

Companies seeking protection are immune to shame – as is made clear by this Politico report that’s headlined “Europe’s coffin-makers warn Chinese imports could be death knell for industry.” (HT Scott Lincicome)

Richard Fulmer decries the smearing, led by the “historian” Nancy MacLean, of GMU’s late Nobel-laureate economist, James Buchanan. [DBx: I put “historian” in quotation marks because, rather than report and interpret history, MacLean – as Fulmer shows – distorts history with fallacies generated by such maneuvers as out-of-context quotations. Whether MacLean’s maneuvers are mendacious or the result of astonishing intellectual incompetence is for you to decide – but it’s one or the other, or perhaps a combination of both. And – also astonishing – there are “scholars” who still today defend MacLean’s “scholarship.”]

With her wisdom and economic good sense, Megan McArdle writes about candy and lazy accusations of corporate greed. A slice:

I’m not saying corporations aren’t greedy, because they are. But greed can’t explain why food producers change their recipes; corporations were just as greedy in 1928, when the Reese’s Peanut Butter Cup was invented. They were greedy in 1978, when I was cramming their product into my 5-year-old mouth. Greed is a constant, like the speed of light. It can’t explain why candy formulas have changed, or why candy bars have shrunk, to the frustration of many consumers who feel they’re being cheated out of their full chocolate fix.

So why do companies shrink the product, cheap out on ingredients and stuff our candy with preservatives? One answer is that they can: Food technology has created possibilities that didn’t exist in 1928. But the other answer is that we kind of want them to.

Now, I know you don’t want a tiny, artificial-tasting substitute — you want a full-size, full-chocolate experience, full of natural ingredients. We all want lots of things, from world peace to sporty convertibles. Often, we aren’t willing to pay for what we want.

When cocoa prices skyrocketed between 2022 and 2024, did we want to pay significantly more for a bar of chocolate? Maybe you would, but odds are you’re an affluent professional for whom candy bars are a rare indulgence, so a price spike may not matter much. For many consumers, it matters a lot.

Think about preservatives and stabilizers. They certainly sound awful — who wants their candy embalmed? No one. But who wants a stale Reese’s Peanut Butter Cup? No one. If it’s a choice between that and the preservatives, well…

We could rejigger our modern supply chains, delivering fresh food more frequently instead of engineering it for eternity. But this would make food more expensive — and, as our inflationary era keeps demonstrating, that would anger a lot of people.

Corporations have to juggle trade-offs we’d rather not think about. They often make choices I wouldn’t, but I am not the average consumer. Companies have to guess whether that average consumer would rather have a more expensive chocolate bar or one that is smaller, cheaper to make and designed for a longer shelf life. They apparently reckon most of us hate sticker shock more than the gradual degradation of our favorite products.

You can argue that this is irrational, but many human emotions are, including nostalgia. You can also argue that the companies are guessing wrong (and in this case, Hershey seems to agree). Either way, you’re not arguing against corporate greed. You’re arguing against human fallibility. Alas, that too is a constant.

Sad new: 2018 Economics Nobel laureate, and long-time professor at Yale, William Nordhaus has died. (He is justly famous for, among other things, his 2004 paper “Schumpeterian Profits in the American Economy: Theory and Measurement,” in which he found “that only a minuscule fraction of the social returns from technological advances over the 1948-2001 period was captured by producers, indicating that most of the benefits of technological change are passed on to consumers rather than captured by producers.”)

Nick Gillespie is correct: “For libertarians, election day is the cruelest day of the year.”

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… is from page 6 of Stephanie Slade’s brilliant new (2026) book, Fusionism: Liberty, Virtue, and the Future of the American Right:

A core component of classical liberalism has always been a belief that people should be allowed by law to pursue their own interests as they see fit, so long as they are respecting the rights of others.

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Joseph Schumpeter would not be surprised: A successful entrepreneur in America’s market economy funds ‘research’ carried out by intellectuals who are hostile to successful entrepreneurs in America’s market economy. (HT Phil Magness)

The Editorial Board of the Washington Post explains what shouldn’t – but, alas, what today nevertheless does – need explaining: government ownership of corporate shares is a source of trouble. A slice:

The U.S. government lost about $12 billion on Friday as Intel’s stock fell 29 percent, its worst day since 1974. Last year, the Trump administration took a 10 percent stake in the chipmaker. Even after the sell-off, the trade remains profitable for taxpayers. But the volatility highlights how much it warps the free market when the Commerce Department takes equity positions in dozens of American companies.

Owning such a big share makes the government more inclined to side with Intel in disputes with its competitors and to give the company special favors. The potential conflict came into focus last week when the Federal Communications Commission granted Intel — and only Intel — a one-year exemption from its ban on certain foreign-made advanced robotics.

Intel warned that the rule could prevent it from using automated guided vehicles to move materials in semiconductor manufacturing plants and said there are no U.S.-made robots to use instead. That’s a great argument for scrapping the FCC’s policy altogether. But the ban remains in place, and the FCC hasn’t announced comparable exemptions for other chipmakers with domestic manufacturing operations.

Such is the danger of state capitalism. The government’s picking winners and losers is a recipe for hamstringing investment. Intel’s hotline to the White House could give the company a leg up over competitors that have outperformed it technologically and commercially. Nevertheless, if investors think political protection bestows advantages on Intel in the marketplace, they will be strongly tempted to back the firm over better-managed alternatives. That leaves consumers worse off.

China’s industrial policy is highly inefficient and not worth mimicking. TSMC and Samsung outpace China’s state-backed Semiconductor Manufacturing International Corp. in market share and innovation, despite Beijing’s investing billions in SMIC to make it a market leader. Other state-backed Chinese companies never produced a single chip. The country’s electric-vehicle industry was once the poster child for state investment success, but domestic auto sales have plummeted, and local governments are stuck keeping failing plants on life support. Thus is economic growth depressed and capital consumed that would have more productive uses elsewhere.

Uncle Sam is also meddling in Intel’s business decisions in ways that aren’t necessarily in the best interests of its other shareholders. In June, for example, President Donald Trump announced a deal between Intel and Apple that reportedly caught Intel’s own executives by surprise. And Intel’s chief executive, Lip-Bu Tan, is reportedly playing “Mother, may I?” by checking with Commerce Secretary Howard Lutnick before making major equity sales.

Three illustrious GMU alums – Dave Hebert, Phil Magness, and Paul Mueller – discuss tariffs.

Not that it matters beyond the fact that it’s about an absurd obsession of Trump: “Trump’s tariffs fail to cut US trade deficit, IW report shows.” (HT Scott Lincicome)

John Phelan writes about Milton Friedman, who was announced as a Nobel laureate in economics 50 years ago this month.

GMU Econ alum Adam Michel explains that “Senator Wyden’s data center tax bill mistakes REITs for an AI subsidy.”

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… is from page 117 of the “The General Interest” which is Chapter x of the 1932 report of a commission in the U.K., chaired by Sir William Beveridge; the title of the collection is Tariffs: The Case Examined:

National policy in the economic sphere, as in all other spheres, should be directed to ensure permanent advantages for the population as a whole. The presumption in favour of a policy of Free Trade is that it is so directed – it secures in the long run the use of the national resources of a country in the way shown by experience to be most economical, that is to say, to yield the greatest results for the least effort: the certain advantage of Free Trade is both permanent and general. The advantages, on the other hand, to be obtained by tariffs are either sectional if they are certain, or uncertain if they are general; in each case a strictly temporary gain, if any gain, is far more probable than a permanent one.

DBx: Yes. Yet despite the overwhelming evidence and theory in favor of free trade, protectionists continue to present themselves as social engineers here to save the true and the good by coercively restricting the ways in which their fellow citizens peacefully spend and invest their own money.