Tweet

Mike Munger finds merit and demerit in Victor Davis Hanson’s new book about Trump’s political resurrection. Two slices:

Hanson claims to mount neither a defense nor an attack. But in truth the book is largely a defense, sometimes slipping into embarrassing hagiography of the “You don’t understand Trump’s five-dimensional chess!” genre. Trump’s erratic, self-defeating tariff policy and impetuous military adventures have been head-shaking own goals, not strategic triumphs. Pretending otherwise doesn’t change those basic facts.

Still, the book achieves its goal: documenting the events and conditions that brought us to the current situation. It is tempting to treat the story as two separate questions: a puzzle about the comeback, and a question about what came after. Hanson’s contribution, and it is an important one, is to show that the two cannot be separated; they require a single, integrated answer.

…..

Trump doesn’t mind “selling” because, unlike Coriolanus, he isn’t deeply committed to principle; he sells whatever program he fancies because he can sell anything. Because he is never captive to a program, he never loses his hold on his voters. As he boasted in January 2016,

Tragically, that same confidence underlies the impetuous decisions to impose constant changes in tariff regimes and enormous spending on discretionary war in Iran, which have robbed Trump’s economy of the vitality he (quite rightly) thinks his core policies created. The question is not whether the economy is better now than it was under Biden, because it is. The tragedy is Trump’s conceit that he can sell anything, and the fact that he is right about that. Things should be much better, and would be better if our President didn’t suffer the tragic flaw of overweening pride. As he boasted in January 2016, Trump could “shoot somebody on Fifth Avenue,” and he wouldn’t lose any voters.

Hanson has written an indispensable account of how the counterrevolution Marcuse feared finally arrived. What Hanson has not written, and perhaps could not, is the tragedy: the story of a hero undone not by the ingratitude of those he saved, but by his own conviction that he can sell anything. The real tragedy, the inability of the GOP to capitalize on a generational transformation in political focus by generating new and substantive ideas, is going to affect the U.S. for decades.

GMU Econ alum Paul Mueller warns of the dangers of “postliberalism,” and in particular of Catholic Integralism. A slice:

Popular commentators like Tucker Carlson and online extremists like Nick Fuentes boil postliberalism down to raw friend-enemy politics and crude historical revisionism. In this messy milieu, anti-communism serves as a universal solvent for fascist crimes, downplaying Franco’s atrocities or romanticizing interwar authoritarianism as a ‘lesser evil.’ Whether dressed in academic regalia or broadcast over internet livestreams, the fundamental logic remains identical: the ends justify the regime.

This shocking intellectual move ignores, downplays, or whitewashes grave injustice, tragedy, cruelty, and evil. How can it be justified? Only through a “lesser evil” approach with an even worse enemy or alternative to avoid. While Communism was often the feared alternative, Catholic Reactionaries have also often blamed a “Judeo-Masonic Conspiracy” for societal ills.

My GMU Econ colleague Bryan Caplan celebrates the rideshare revolution.

The federal film-tax-credit – a government subsidy to one of America’s most successful industries – could cost U.S. taxpayers as much as $50 billion – so reports GMU Econ alum Adam Michel. Two slices:

After President Trump’s endorsement, a bipartisan, bicameral group of lawmakers recently introduced the Motion Picture, Television, and Entertainment Revitalization Act. The bill would create the first direct federal subsidy for Hollywood movie studios through a tax credit covering 20 to 30 percent of what film and TV productions pay their workers.

Dozens of states and countries have experimented with subsidies for the film industry. The overwhelming evidence is that the subsidies mostly don’t create new production, don’t meaningfully increase jobs or wages, don’t build an industry that survives without the subsidy, and are fiscally costly.

…..

Hollywood’s problem is not a shortage of subsidies. Thirty-nine states and dozens of countries already pay studios to little effect. A new federal film tax credit would primarily put taxpayers on the hook for multimillion-dollar Hollywood studio productions that would have largely been filmed here anyway. Congress should protect taxpayers from subsidizing Hollywood by rejecting the federal film credit, and states should repeal their programs, too. If filming in the United States costs too much, the answer is lower taxes and easier regulations for all businesses, not billions of dollars in subsidies for a single industry.

Wall Street Journal columnist Jason Riley decries the nativism and bigotry now flooding through the ranks of the GOP. Two slices:

Some Republicans have decided that now is the time for racial and ethnic purity tests. Last month Bo French, Republican nominee for Texas railroad commissioner, posted a photo on social media of Asian students at the University of Texas at Austin celebrating the football team’s victory over Ohio State. “I heard UT graduation this year looked like this,” Mr. French wrote above the image. “I didn’t believe it. The problem is now obviously far worse than anyone imagined.”

Mr. French has a history of this behavior. He has described Democrats as “retarded” and “gay” and asked his social-media followers if Jews or Muslims pose “a bigger threat to the U.S.” His bigotry has prompted condemnation on the left and right, including a stinging rebuke on these pages from Karl Rove. “The GOP has a growing number of Bo Frenches—and not only in Texas,” Mr. Rove wrote. “There are ‘just asking questions’ Jew-haters, misogynists who worship hypermasculinity, conspiracy nuts seeking clicks for profit, and religious bigots who won’t differentiate between Muslim terrorists and Muslim American patriots. These people are diminishing the Republican Party, not building it.”

Bully for Karl. It’s important that party elders call out bigotry wherever it emerges, including within their ranks. A major political party that decides to indulge cranks rather than marginalize them doesn’t deserve to win elections. What’s lost on the MAGA faithful, it seems, is that its anti-Asian sentiment isn’t only morally repugnant but also politically foolish.

…..

Asian-Americans have the highest marriage rates and are least likely to be single parents or engaged in violent crime. Academically, their success has been equally impressive. The most selective colleges in the country typically require an SAT score of at least 1400 for admission. According to the College Board, which administers the SAT, among students who took the test in 2024, 27% of Asian students scored 1400 or higher, compared with 7% of white students.

Asians are another example of what America still offers people of any background who put in the work and develop the skills that free-market capitalism rewards. If more of them are rejecting the identity politics of the Democratic Party, that’s good for the GOP and the country, both of which could use a lot more of those UT Austin fans and fewer Bo Frenches.

The Editorial Board of the Wall Street Journal reports on “France’s bonfire of inanities.” Two slices:

Ostensibly the destructive rioting of the past few days is a student protest against underfunded schools. If you believe that, we have a pont over the Seine to sell you. The riots have been encouraged by politicians on the left, as Dominic Green recently reported on the Journal’s Free Expression newsletter.

Labor-union comrades of Jean-Luc Mélenchon, leader of La France Insoumise (“Indomitable France”), stoked the protests that quickly became riots. Mr. Mélenchon — think Bernie Sanders with a Gallic accent — visited the barricades. It feels like a display of left-wing muscle-flexing before next year’s presidential election, in which Mr. Mélenchon will be a candidate.

The violence obscures the related crisis engulfing public finances. France doesn’t have more money to spend on schools because it doesn’t have more money to spend on anything.

…..

France’s main problem isn’t math. It’s slow growth. The right fiscal reforms, such as tax cuts and welfare and pension reforms that encourage work and investment, would create new opportunities for prosperity. Young people would be the biggest beneficiaries. The alternative is what’s happening in the streets.

Americans can’t afford to gloat from the sidelines. U.S. debt is 100% of GDP, and its politicians can be as feckless as the French. At least the U.S. economy is growing at a healthy clip, but that could change in a hurry with the wrong mix of regulation and a ham-handed attempt to tax our way out of our fiscal hole.

Reading James Pethokoukis is always a positive-sum experience.

GMU Econ alum Julia Cartwright reminds us of the forgotten Maria Edgeworth, aunt of the famous economist F.Y. Edgeworth. A slice:

Her influence and knack for writing about economics for a general audience earned her respect in the field and a place in the rooms where economics was being invented. She befriended Ricardo and followed his sparring with Malthus over trade. She read and critiqued the work of Jane Marcet, whose 1816 “Conversations on Political Economy” became one of the earliest and most influential popular economics textbooks. Where Marcet spoke plainly about economics, Edgeworth hid it in narrative. Together, they helped pave the way for a generation of women to write about the subject.

Tweet

… is from page 24 of Peter Boettke’s and Rosolino Candela’s 2025 book, The Historical Path to Liberty and Human Progress [link added]:

Exchangeability of property rights not only allows individuals to make trades that both parties believe will make them better off. When rights over private property are transferable, it also provides an institutional framework within which a system of money prices emerges. The emergence of money prices provides the information to calculate the relative scarcity of different resources, such that “prices can act to coordinate the separate actions of different people” by communicating the dispersed and particular knowledge of millions of individuals (Hayek 1945). People are able to observe prices and determine whether they value the property they have more than the money they could receive for it. Changes in price signals drive the movements in the demand and supply for different goods and services. These price changes provide the information to entrepreneurs as to what products are most urgently demanded and what inputs can be combined to most cheaply produce them.

DBx: Yes.

It follows that by restricting the exchangeability of property rights, protectionism reduces the amount of economic information that people convey to each other.

Tweet

Here’s a letter to a new and very angry correspondent.

Ms. Becker:

I’m sorry that you so strongly disapprove of my recent AIER column in defense of libertarianism. Your core complaint is this:

You libertarians have ridiculously high opinions of human nature, assuming most people can approach saintliness. Serious conservatives don’t. We are sober. We are grounded in reality. We know that man is weak, fallible and most of all tempted into sin.

With respect, I disagree that we libertarians have such a high opinion of human nature. Precisely because we understand, as you put it, that humans are “weak, fallible and most of all tempted into sin,” we insist that the power of some individuals to coerce other individuals should be kept to an absolute minimum.

No serious libertarian argues that freedom produces anything close to heaven on earth, with no one succumbing to self-destructive or anti-social temptations. But we recognize two related realities that are missed by many conservatives as well as by progressives.

First, when adults are free to use their own (and only their own) private property – including their own bodies – under a rule of law, each individual personally experiences more of the costs of his or her bad behavior, and reaps more of the fruits of his or her good behavior, than is the case when that freedom is curtailed. This ‘internalization’ of consequences obviously doesn’t turn everyone into a saint – or prevent everyone from being a devil – but it does keep to a minimum the amount of ‘bad’ behavior while encouraging the greatest possible amount of ‘good’ behavior.

Second, any curtailment of libertarian freedom necessarily empowers some individuals to coerce other individuals. Given that we humans are indeed imperfect creatures, it is you – not any libertarian – who is unrealistically optimistic about human nature. I cannot fathom your faith that political power transforms individuals who cannot voluntarily manage their own affairs well into individuals who can coercively manage other individuals’ affairs well.

A truly sober and realistic assessment of human nature leads people of goodwill naturally to a wish to reduce as much as possible the power of the state.

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

Tweet

Steven Koonin and Scott Atlas warn of the “consensus trap” that produced recent disasters, including the authoritarian covid lockdowns. A slice:

Beginning in 2020, policies allegedly following the science imposed lockdowns, prolonged school closings, church and business shutdowns, and vaccine mandates even for low-risk populations. But data available by the spring of 2020 showed that lethality was concentrated overwhelmingly among the elderly. Simple common sense argued instead for targeted protection. Those who said so—including one of us, Dr. Atlas, from inside the White House—faced attacks in the media and university censure. The collateral damage was sweeping, even beyond extra deaths: historic learning loss, a surge in youth self-harm, delayed and missed medical care, and economic devastation. The full human cost may never be known, yet few institutions have done after-action reviews.

Climate policy shows the same dynamic on a longer fuse. While greenhouse gases do warm the planet, the claim of inevitable catastrophe absent an energy transition—which, conveniently, would be painless—rests on implausible scenarios and on institutional incentives that reward alarm. Scientists who drew attention to that disconnect, such as Judith Curry, were assailed rather than debated.

Germany’s environment minister stated that a consumer surcharge for renewable energy would cost households “as much as a scoop of ice cream” each month; it rose more than tenfold before being scrapped altogether in 2022. The emissions reductions achieved so far have had no detectable effect on the climate. As with subprime and Covid, the architects have faced little reckoning, and because climate consequences unfold over decades, they probably never will.

Deirdre McCloskey explains what should be – but, alas, what to too many people isn’t – obvious: market economies work extraordinarily well. A slice:

Well, why do I, after 84 years on this planet (on September 11, thanks), most of it spent thinking about the evidence on how economies work, disagree with the numerous non-believers?

For one thing, as a resident of an economy, I live daily inside a massive experiment proving that it does work pretty much as supply and demand says. So do you live inside it. São Paulo is an enormous city. It exhausts me to drive across it. Yet somehow every day when you go to get a morning coffee, there it is. When you want to buy a new shirt, there it is. If you had the misfortune to live in a country that so strongly denies market forces that it makes them illegal, such as North Korea or the old Soviet Union, this would not be the case. The Soviets made endless jokes about it not being the case.

For another, as an economic historian, I know, and can show you massive evidence, that liberated people become amazingly creative and then make themselves and everyone else amazingly rich. It has happened from 1776 to the present, I’ve told you frequently, to the extent of 25 thousand percent, for the first time in history. In a century or so, if the economists and politicians don’t intervene, everyone will be twice as rich as the average Swiss person now. I mean Africa. I mean everywhere.

For another, as an economist of a mathematical and philosophical bent, I have a vision of the economy as an enormous spontaneous order, like the Portuguese language or the history of art or even the pattern of your own sweet life.

It’s lovely. Let it work.

In a new paper, Joseph Francis unpacks the “China Shock.” Here’s the abstract:

Numbers abound in the “China shock” narrative. In the Wall Street Journal, Treasury Secretary Scott Bessent (2025) claims that higher tariffs are necessary because “3.7 million Americans lost their jobs” as a result of China joining the World Trade Organization in 2001. Bessent cites the research of the economists David Autor, David Dorn, and Gordon H. Hanson, two of whom have also warned in the New York Times that the United States risks facing a “China shock 2.0” unless it reorients its economic policy. “The first time China upended the U.S. economy, between 1999 and 2007,” Autor and Hanson (2025) state, “it helped erase nearly a quarter of all U.S. manufacturing jobs.” They call for the federal government to embrace industrial policy, while also investing in “universities with vibrant STEM programs,” such as Harvard and the Massachusetts Institute of Technology.

Yet an analysis of the underlying econometrics reveals that the empirical basis of these claims is fragile. When Kirill Borusyak, Peter Hull, and Xavier Jaravel’s (2022) corrections to Autor et al.’s research design are applied, the negative effects on living standards — what Autor et al. (2013, 2121) describe as “higher unemployment, lower labor force participation, and reduced wages” — disappear. In addition, Autor et al.’s claim that Chinese imports caused “one-quarter of the contemporaneous aggregate decline in US manufacturing employment” has no meaningful empirical basis. It is a big, attention-grabbing number that the Difference-in-Differences (DiD) model used by Autor et al. cannot actually produce. Such issues recur, moreover, in various other articles that Autor et al. (2019; 2020; 2021) subsequently produced to reinforce their “China shock” narrative.

Scott Lincicome tweets a Financial Times report on how Nixon’s restrictions on soybean exports turned Brazil into a soybean powerhouse.

The Editorial Board of the Washington Post seems to be cautiously optimistic that the U.S. Supreme Court will not allow state and local governments to sue companies for climate-change reasons. Here’s its conclusion:

After Justice Samuel A. Alito Jr. recused himself last week, the energy companies’ path to a five-justice majority became more difficult. That made a punt on procedural grounds more of a possibility, but most of the questions posed Monday focused on the merits of each party’s arguments. If the justices choose to duck in this case, they will eventually need to confront a growing wave of climate litigation suits. They have an opportunity now to close the floodgates before unelected juries put American energy producers out of business.

Joshua Rauh talks goods sense about budget deficits and soaking the rich.

Daniel Foster ably defends, against Michael Brendan Dougherty,  his criticisms of J.D. Vance’s clueless characterization of the U.S. economy. A slice:

Multinational production in particular interacts with trade liberalization in a synergistic way, with one model suggesting globalized production chains more than double the benefits of trade for a given country. And take some of the others in the list: Foreign-owned multinationals operating in the United States generated $1.52 trillion in American value added in 2024, employed 8.6 million Americans, and conducted nearly $100 billion in U.S. research and development. American multinationals, meanwhile, earned $660 billion on their direct investments abroad in 2025, leaving us with about a $350 billion surplus in direct investment income. FDI also makes U.S. firms more productive. One estimate suggests that in the first decade of the period Vance is talking about made U.S. manufacturing more productive: “FDI spillovers [are] economically important, accounting for about 14% of productivity growth in U.S. firms between 1987 and 1996.”

Critically, we also sit at the center of the global financial and monetary system, a structure of our device and control. The dollar is the world’s currency of exchange, Treasury securities supply much of the world’s collateral, and demand for dollar assets dramatically expands the capital available to, and reduces borrowing and transaction costs for, the U.S. government, businesses, and households alike. This is what economists call “exorbitant privilege” and JD Vance calls “a resource curse.”

“Are prediction markets politically biased?“

Tweet

… is from page 146 of Thomas Sowell’s 1999 book, The Quest for Cosmic Justice [original emphasis]:

But unlike the French revolution or the Bolshevik revolution, for example, the American revolution and its resulting constitution did not center on a change in the cast of characters in high places or on a change in their political language or immediate policy agenda. Its central concern was in establishing new processes by which whoever occupied the places of power could be restrained and replaced. In short, it did not pretend to have a doctrinal truth but instead implied a deep skepticism that anyone had either a monopoly on doctrinal truth or such moral or intellectual rectitude as to be exempt from constraints, condemnations, or dismissals from office by their fellow men.

DBx: Yes. But we might also say that the one doctrinal truth that the American founders did believe in – the core truth declared in the opening lines of the Declaration of Independence – is that the best society is one in which the power of one person or group of persons to coercively impose his or its will upon other persons or groups of persons should be kept to a minimum.

Tweet

Mr. Michael Brendan Dougherty
National Review

Mr. Dougherty:

Although I’m not on X, a friend shared with me this recent tweet of yours:

Still waiting for a response to my two sentence argument against free trade that engages with it:

A global free market is necessarily indifferent to the distribution of goods, skills, technological capacities, and power among nations. Statesmen cannot be so indifferent.

Let me end your wait.

I’m unpersuaded by your statement, not least because it’s unclear what you mean by the market being “indifferent.”

If by “indifferent” you mean that the market generates processes, and outcomes, different from those chosen by “statesmen” or preferred by pundits, then your point is true but trivial. The essence of free trade is that no individuals or groups coercively override the economic choices made by ordinary people spending and investing their own money.

But I suspect that by “indifferent” you’re making a more substantive claim. Just what that claim is, however, remains unclear.

Perhaps you mean that individuals choosing and acting in free markets are indifferent to the kinds of consumer goods and services they produce and consume – to the sorts of capital goods they create – to the varieties of worker skills they reward and develop – to the technologies they foster. If this is your meaning, then I can only disagree and wonder at your poor opinion of your fellow Americans.

Are you indifferent to how you spend your money and to how your savings are invested? Do you really believe that American business owners and managers are indifferent to the skills of their workers, to the kinds of machines and technologies they use, and to the sources of their supplies? If so, how do you explain the steady increase in real per-capita income in the U.S., the steady increase in household net worth, and the real increase in the size of the U.S. capital stock from the end of WWII through 2018 – years in which trade became freer?

Or perhaps you believe that “statesmen” – politicians and bureaucrats – empowered to override the economic choices of consumers, entrepreneurs, and investors would generate outcomes superior to the outcomes generated when these economic choices aren’t overridden. If this is your belief, can you identify the sources of information your “statesmen” would use to outperform the market? From where would they get the detailed knowledge they must have in order to perform so brilliantly? And why, if your “statesmen” possess the economic acumen, entrepreneurial genius, and access to knowledge that you presume them to possess, should they have the power to impose their economic visions on the rest of us? Wouldn’t such economic virtuosi be able, in competitive markets, to persuade investors and consumers voluntarily to invest and spend their money in ways that support these economic visions?

Those of us who endorse free trade have not only reams of evidence to support our case, but also a coherent theory of how free-trading economic actors access and use the information that’s necessary for economic success. You protectionists, in contrast, have much less evidence on your side, and you have absolutely no theory of how “statesmen” will get the information they must have if protectionism is to work as advertised.

I can’t accuse you of assuming this core problem away, because you give no evidence of being aware that the problem even exists.

Your tweet boils down to the claim that, were the amiable god-like creatures of your imagination available to govern us, they’d outperform free-trading human beings. Well, yes. No argument from me on that. But serious policy analyses and statements are never populated by any such deus ex machina.

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

Tweet

The Editorial Board of the Washington Post explains what shouldn’t – but, alas, what nevertheless does – need explaining: Britain’s economy will not be ‘fixed’ by greater government involvement. A slice:

The “new path” proposed by British Prime Minister Andy Burnham in his debut speech at the Labour Party’s annual conference last week sounds a lot like the one that led the United Kingdom into prolonged stagnation.

Wall Street Journal columnist Mary Anastasia O’Grady warns that in Venezuela Trump “is pushing oil production over good governance and may end up with neither.” A slice:

It’s been nine months since President Trump used the U.S. military to arrest dictator Nicolás Maduro inside Venezuela, take him to New York, and promote his deputy, Delcy Rodríguez, to top despot. Venezuelans thought they were going to get elections. Instead U.S. sanctions on oil sales have been lifted and dollars are again flowing to the criminal regime. Popular opposition leader María Corina Machado desperately wants to return, but Washington won’t allow it.

The energy confab was a Trump administration idea. It’s betting that by talking up the Venezuelan petroleum industry even while a dictatorship is still signing the contracts, it can get capital flowing into the country. The rebuilding of democratic institutions is supposed to follow.

Trump critics say that’s an error in sequencing. They believe that before investors sink real money into long-term commitments in Venezuela, in amounts that matter, they will want to be dealing with a legitimately elected government operating under a rules-based system.

History is on the side of the skeptics. At a minimum, caution is in order when dealing with the chavistas, who over the past quarter-century have repeatedly “dialogued” with democrats, as they’re doing now, only to refuse to relinquish power.

The energy summit harked back to a time in the once-prosperous South American nation when oil was the engine of growth. But elsewhere in the capital and the rest of the country, things remain dire. Triple-digit inflation and persistent power outages make life miserable for most Venezuelans. Ms. Rodríguez still holds an estimated 324 political prisoners, and more than two dozen others are under restricted freedom. Venezuelans at home and abroad are souring on the Trump administration.

Team Trump says it’s still pushing for political reform through negotiations between Ms. Rodríguez’s brother Jorge, head of the National Assembly, and the opposition. The two sides have been meeting on and off for two months and are rumored to be near an agreement on an independent supreme court. After that they’re supposed to form an independent electoral council. If all goes well, some insiders say the country could hold elections by mid-2027.

Venezuelans who want to recover their country are holding onto this hope. But doubts creep in when the Trump administration attaches no importance to restoring good governance and instead makes a boom in oil production, driven by secret agreements, its priority. By continuing in this direction it’s likely it will get neither.

Attending the conference was a low-cost way for large companies to generate goodwill with the White House. Even companies with little interest in Venezuela had reason to show up to stay on Mr. Trump’s good side. Marginal players probably wanted to rub shoulders with Oil Ministry bigwigs who have discretionary power over rights to explore and exploit oil blocks. Sweetheart deals in exchange for who knows what are the way things work in Venezuela.

Venezuelans are complaining bitterly about the recent regime decision to grant proprietary rights over 17 oil fields to North American Blue Energy Partners, whose majority owner is palace insider Alejandro Betancourt. Yet rather than object to the no-bid contract, the Trump administration further eroded confidence by appropriating its own minority stake in the company.

Roger Pielke Jr. ponders Pres. Trump’s carbon tax.

Mark Mills writes wisely about AI. Two slices:

Before the telegraph, widespread information transmission had also never moved faster than a horse. In 1858, the New York Times reported that telegraphy could spread lies “too fast for truth” to catch up. Experts warned that the technology would create a “morbid appetite for startling news and a monomania for extravagant and almost incredible rumors.” In 1861, barely a decade into the telegraph era, the Morning Pennsylvanian observed that “so far as its communications for the public eye are concerned, it is almost an unmitigated curse.” The New York Times aired worries that the electricity in the first-ever proliferation of wires festooning the countryside could endanger animals and crops and quoted experts warning that “girdling the earth with electrical wires” could even risk destabilizing the planet’s rotation.

History is legion with examples of what we view in hindsight as hysterical and even amusing reactions to new technologies. But it seems wired into human nature to ignore the implications because, well, “this time it’s different.” It’s always the case that every new technology is different in the particulars and that otherwise smart people have said exceptionally silly things about new technologies. Reflexive presentism is hard to escape.

Cataloging history’s episodes of techno-hysteria doesn’t mean that new technologies were free of negative consequences and disruptions. But as history also shows, it’s apparently too much to expect that we will react much differently this time than we did last time.

…..

As for water and land, data centers use far less of both than golf courses, never mind agriculture. Where were the protesters when Congress enacted mandates and subsidies for corn-ethanol in gasoline? Nearly 200 times more water is used per gallon to produce ethanol than gasoline.

Finally, on land use: the total square footage of warehouses in America is, at present, almost 100-fold greater than for data centers. Again, where were the demonstrators when politicians and promoters started subsidizing solar power installations that blanket farmland and fragile deserts by the square mile with black, glass-covered silicon?

Also writing insightfully about AI, but from a very different angle, is Bob Graboyes.

National Review‘s Jim Geraghty decries “the rise of dumb, anti-innovation, job-saving laws in blue cities and states.” Here’s his conclusion:

Rhode Island passed its law; starting January 1, 2027, any grocery store in the state that provides self-service checkout stations must have a ratio of one manual checkout station for every three self-service stations. Heaven forbid we let the grocery stores decide for themselves! Heaven forbid we allow customers to decide which option they want to use!

Joseph Steinberg tweets: (HT Scott Lincicome)

I think it’s very clear that ADH [the “China Shock” work of David Autor, David Dorn, and Gordon Hanson] and its follow-ups have led many people to believe that trade with China was a net negative for American jobs in the aggregate, when it’s not at all obvious that was the case. If you read their abstract & intro, and those of many other similar papers, there are no caveats whatsoever about relative vs absolute effects. In ADH, it’s relegated to a footnote. And their extrapolation to aggregate effects is totally inappropriate—a practice they have continued through all their work and propagated to the broader set of papers building on their work.

Allen Mendenhall’s thoughts about economics and economics training are excellent. (HT Arnold Kling)

Peter Suderman describes the new Tom Cruise movie, Digger, as a “disaster.”

Tweet

… is from page xvi of Samuel Gregg’s forthcoming book, The Civilization of Commerce:

The act of situating the case for markets within a wider argument about civilization reminds us, moreover, that much more is involved in the defense of market economies than emphasizing their ability to create wealth. Distinctly nonmaterial goods like liberty and justice are equally at stake.

DBx: Sam is correct.
…..
I’ve lost count of the number of times I’ve witnessed the following: The case for free markets is made on consequentialist grounds – for example, markets supply greater material prosperity to ordinary people, including better health, longer lives, and access to more leisure – only to be met with the objection that market-oriented scholars are blind to the nonmaterial dimensions of human flourishing. The market-oriented scholar then declares that he or she does indeed value nonmaterial goods – above all, liberty – so highly that he or she would, if necessary, willingly sacrifice much material wealth in exchange for greater liberty. This declaration is then met with the objection that the market-oriented scholar isn’t to be trusted because he or she is an ideologue.

Tweet

Here’s another letter to a long-time correspondent.

Mr. McKinney:

Thanks for sharing John Carney’s tweet in response to my recent open letter to J.D. Vance – a letter in which I document some of the many ways that ordinary Americans’ economic condition is far better today than it was 40 years ago. Mr. Carney writes:

Dear Don Boudreaux,

You have frequently complained that “the state” is too big and argued more should have been done to constrain its growth. You’ve argued that we need a balanced budget amendment to prevent government from financing its growth with debt.

Since 1985, the annual federal budget deficit is about 8.4 times larger in nominal dollars than in fiscal year 1985, roughly 2.8 times larger after inflation. Gross federal debt has grown far more — from about $1.8 trillion at the end of FY1985 to roughly $40 trillion by the start of October 2026.

How curious. Please tell me which of the following results [the ones in the open letter to Vance] of the growth of a growing government and ever-larger debt over the past 40 years do you wish to undo?

Sincerely,
John Carney

PS: See how this works?

Contrary to your prediction, I actually believe that Mr. Carney’s point is fair. I (like many others) have indeed complained for decades that government is too big and intrusive and, hence, harmful to the U.S. economy. And yet despite the continued growth of government on many fronts, ordinary Americans are today much better off economically than they were 40 years ago. Mr. Carney is justified in seeing in my arguments a potential inconsistency.

For two related reasons, however, I plead innocent to the charge of being inconsistent. First, my classical-liberal consequentialist argument against big government is not that such government necessarily makes the economy absolutely worse off over time; rather, the classical-liberal argument is that big government prevents the economy from performing as well as it would were government smaller and less intrusive.

Second, although I’ve no doubt that the increased government spending – especially that which is funded by debt – over the past 40 years worsened economic growth, on other fronts there’s been liberalization which fueled economic growth. For example, much of the Carter-Reagan deregulation of communications, energy, banking, and surface and air transportation remains in place today. The top marginal income-tax rate was cut dramatically starting in the early 1980s and has since remained well below its rate when Reagan first took office. And until 2018, average tariff rates had fallen.

For the above two reasons, the absolute improvement in the U.S. economy is not inconsistent with the arguments that I and other market-oriented economists have made over the years against large and intrusive government.

However, this improvement in the U.S. economy is inconsistent with J.D. Vance’s argument, which is that the U.S. economy has performed abysmally over the past 40 years. Vance repeatedly talks of America’s “hollowed out” industrial base and middle class. Vance describes the economy as having suffered 40 years of “decline” – which is a categorically different claim from saying that the economy has done well over the past 40 years but could have done even better.

In short, my and other market-oriented economists’ complaints about large and intrusive government are that such a government prevents the economy from working even better than it currently does. Vance’s complaint is that the market-oriented policies of the past 40 years have caused the American economy to suffer actual decline. The data are consistent with the former complaint, but disprove the latter.

Sincerely,
Don