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Michael Chapman explains what shouldn’t – but, alas, what today nevertheless does – need explaining: Mao Zedong was a mass-murdering monster.

Matt Weidinger reports on the success of the 1996 welfare-reform legislation in the U.S.

Although it gets some history wrong, The Economist busts the myth that today’s billionaires do not earn their wealth. A slice:

More and more billionaires derive their wealth not from accidents of birth or from gaming the system, but by providing useful goods and services and by employing thousands of people.

Peter Suderman, Katherine Mangu-Ward, Nick Gillespie, and Matt Welch discuss the rising popularity of socialism.

Kyle Handley argues that the bond market is not counting on revenues from Trump’s tariffs punitive taxation of Americans’ purchases of imports. A slice:

Bond investors are not attached to customs duties as a line item revenue source. They care about the government’s overall fiscal position and about how policy affects economic growth, inflation, interest rates, and the cost of servicing the debt. Once those broader effects are considered, the market’s behavior over the past 18 months looks less like an addiction to tariffs than a response to the ever-changing size of the tariffs themselves.

Collecting tariffs from the pockets of US consumers and businesses has real, negative economic effects. It does raise some money, but relative to the government’s underlying fiscal outlook, tariff revenue is a side hustle. And the Trump administration has already promised to dole out the funds through schemes like tariff dividend rebates, farm subsidies, and pay-fors on tax cuts or other spending. The new tariff money, in other words, has already been spent several times over, not put towards deficit reduction.

Reem Ibrahim makes clear that the “‘AI Kill Switch Act’ won’t stop rogue AI, but it will slow down innovation.”

Unlike adults, children think no further than the anticipated immediate consequences of their actions. This reality is the major reason why society denies to children nearly all of the decision-making authority that it leaves available to adults. Anyone who calls for the Senate to abolish the filibuster in order to enact one particular piece of legislation reveals himself or herself to be, mentally and emotionally, a child. (This conclusion stands regardless of the merits or demerits of the particular piece of legislation at issue.) Thank goodness that mature voices, such as the Editorial Board of the Wall Street Journal, warn the Senate not to heed this juvenile demand. Two slices:

Bad ideas are everywhere in Washington, but here’s one that belongs in a hall of fame: President Trump is again pressing Republicans to nuke the Senate’s 60-vote filibuster rule to pass the SAVE America Act. Or in other words, hand progressives the tools to pack the Supreme Court and create new states, in exchange for a voting bill that isn’t a clear political winner for the GOP.

“John Thune should not allow the United States Senate to ‘leave town’ until it passes The Save America Act or, far better still, TERMINATES THE FILIBUSTER, where Republicans can then quickly pass everything they ever dreamed of,” Mr. Trump wrote Monday online.

…..

One now daring to step up is Pennsylvania Sen. John Fetterman. He campaigned on killing the filibuster in 2022, but subsequent events have “vindicated” Ms. Sinema and Mr. Manchin, he wrote Monday in the Washington Post. Mr. Fetterman praised the filibuster for forcing compromise and urged voters who dislike Mr. Trump’s agenda to imagine a world without the 60-vote rule: “Republicans could fundamentally change the entire government and country with a simple majority vote.”

The same mental exercise, in the other direction, could benefit frustrated Republicans. If the filibuster went away, Democrats with a mere 50 votes, plus a Vice Presidential tie breaker, could wreck the Supreme Court, add new states, pass Medicare for All, prohibit right-to-work laws, codify Roe v. Wade, create a national gun registry, raise the minimum wage to $25 an hour, and so much more.

The GOP might hope to undo such policies while passing a wish list of its own when it next controls Congress and the White House. Yet the effect would be highly destabilizing, and progressives would have the clear advantage. If Democrats packed the Supreme Court with four new Justices who have life tenure, would Republicans unpack it later? Doubtful.

After Democrats passed new entitlements, year after year, would Republicans marshal the votes for repeal? They can’t even repeal the taxes in ObamaCare. Think how hard it was for Republicans to pass even modest Medicaid reform last year.

The filibuster benefits the country by ensuring stability, so national policy isn’t constantly flipping between polar extremes. This also happens to help the conservative party, because it makes radical change hard to enact. Breaking the filibuster would remove a structural check on the ability of temporary majorities to fundamentally reshape American society, which is what progressives want to do. Even if Republicans moved first, as Mr. Trump wants, the result in the long run would be a ratchet clicking steadily to the left.

Also writing wisely about the filibuster is U.S. Senator John Fetterman (D-PA). A slice:

It’s not often you hear someone in D.C. admit they were wrong, let alone horribly wrong — and the entire Democratic Party was, including me.

When Democrats had the presidency and a majority in both chambers, they were frustrated with the 60-vote threshold needed to advance legislation. Senate Democrats attempted to end the filibuster to push through President Joe Biden’s agenda — an effort I fully supported during my 2022 campaign.

Halfway through my first term, I now recognize how important the filibuster is and the state our country would be in without it.

I thought ending the filibuster was necessary to deliver results for working families. I thought it was unlikely for Republicans in the minority to find common ground on legislation Democrats were proposing. I thought Democrats were not being ruthless the way Republicans were, and we needed to be on that level if we were going to relieve the anger that voters were feeling.

Upon reflection, the pursuit of those short-term wins clouded the bigger picture and lasting impact of a Senate without the filibuster — a Senate that ignored the voices of the minority and everyday people.

The Wall Street Journal‘s Editorial Board reflects on Anthony Fauci’s diaries. A slice:

Anthony Fauci made himself the public face of pandemic lockdowns in 2020, and now we have a glimpse of what was going on behind his eyes. Newly released diaries paint an unflattering portrait of a self-obsessed and not entirely honest bureaucrat, in contrast to the image of the careful scientist he cultivated in public.

The documents were released by Republican Sen. Rand Paul of Kentucky, who for years has dug into the Covid story to understand why the government response to the health crisis was so destructive. The excerpts Sen. Paul has published, which run to more than 1,100 pages, cover December 2019 just before the first reports of an outbreak in Wuhan, China, through Dr. Fauci’s retirement from government in December 2022.

The diary reads as if it was intended to be an aide-mémoire for an autobiography Dr. Fauci might write one day, so it pays to read with care. He might have shaded the truth with an eye (or two) on history. Yet that possibility makes what’s in it all the more remarkable.

One conclusion is that on important points Dr. Fauci was both wrong and dishonest. For instance, he and allies in the government-science industrial complex still cling to the theory that Covid-19 evolved naturally in animal populations before spreading to humans.

Yet on Feb. 1, 2020, his diary records a meeting with a dozen prominent virologists in which only two credited this “natural origins” theory. The rest suspected the virus might have been created artificially, not least because a leading scientist in Wuhan, Shi Zhengli, was known to engage in the sort of gain-of-function research that could produce such a result.

The diary suggests that by Jan. 26, 2020, Dr. Fauci believed the virus hadn’t originated in the Wuhan wet market, often identified as the source by natural-origin advocates. This didn’t stop him and allies from painting skeptics of the natural-origin theory as politicized cranks and conspiracy theorists. Previously released documents shed light on how Dr. Fauci orchestrated publication of a scientific paper to suppress the theory that Covid leaked from the Wuhan Institute of Virology.

The diary also brags on Dr. Fauci’s influence persuading the likes of California Gov. Gavin Newsom and then-New York Mayor Bill de Blasio to shut schools and lock down large parts of the economy. Yet he later claimed in public that he never argued for locking anything down.

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… is from pages 141-142 of Thomas Sowell’s 2008 volume, Economic Facts and Fallacies [original emphasis]:

One of the most popular – and most fallacious – explanations of the very high salaries of corporate executives is “greed.” But when your salary depends on what other people are willing to pay you, you can be the greediest person on earth and that will not raise your salary by one dime. Any serious explanation of corporate executives’ salaries must be based on the reasons for those salaries being offered, not the reasons why the recipients desire them. Anybody can desire anything but that will not cause others to meet those desires.

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GMU Econ alum Dave Hebert is correct: One insufficiently understood calamity of Trumpian protectionism is its destruction of America’s reputation in the eyes of the world. Trump, with all the insight of a 15-year-old schoolyard bully, thinks his maneuvers engender respect for the U.S.; in fact, his maneuvers understandably engender contempt for, and distrust of, the U.S.. Three slices:

But there’s a far worse outcome from this that cannot be undone by courts, elections, or policy reversals. These new tariffs and their justifications have only served to further destroy the relationships with allies and trading partners that we had previously taken as given. The costs of this will outlast every tariff schedule, court ruling, and this administration. They won’t show up on BLS reports, BEA analyses, or Fed surveys. But they will be felt by every single American for years to come.

As a result of these tariffs, Japan, South Korea, and Australia now face 12.5 percent tariffs for their alleged complicity in using forced labor. China is in the same boat. Three of our closest allies are now accused of being just as negligent about slave labor as China.

Canada, the European Union, the United Kingdom, and Mexico now face 10 percent tariffs for their alleged forced labor practices. Canada and Mexico are, of course, also parties to the USMCA, a trade agreement that this very president negotiated, signed, and called “a colossal victory” only to then walk away from. That same week, the President hit Canada with an additional 50 percent tariff on goods ranging from “wine to hockey sticks to cement” regardless of whether or not those goods qualify under the USMCA.

So in the span of a week, the White House effectively told Canada, our closest trading partner and ally, that America’s word means nothing and then told them that they are complicit in forced labor.

…..

Foreign officials must now contend with an even clearer reality: not only is an agreement with the United States not worth the paper it’s printed on, but we will accuse you of horrendous practices if it means that an administration can re-impose tariffs. Our trading partners saw that the findings of investigations will be written to fit the desires of an administration instead of the facts on the ground. They learned that not only is America protectionist but that they will publish a serious moral accusation against a friend when doing so is politically convenient.

This changes how other countries will deal with us going forward.

…..

The trust that America enjoys took generations to build and is being spent at a record pace. In the meantime, the world is moving on and increasingly without us. Unfortunately, courts cannot restore what was actually lost this week. Judges can void tariffs and force refunds, but they cannot unsay an accusation.

The Editorial Board of the Wall Street Journal decries the Trump administration’s UAW-inspired move to further restrict Americans’ access to foreign-made automobiles. A slice:

Are Mercedes-Benz cars Chinese sleeper-cell spies? A bipartisan Senate bill treats the German luxury vehicles as such and would ban them from the U.S. market. This is political rent-seeking in the guise of national security.

The Senate Commerce Committee last week advanced a bill that would codify and expand Commerce Department restrictions on Chinese “connected” software in cars. This is a national-security concern, but self-serving union and corporate interests have hijacked the bill.

Most new cars are equipped with software that connects to the internet and scoops up data. This can include location data as well as audio and video recorded inside a car. Manufacturers and their software partners use these internet-connected systems to help drivers—say, by warning about road hazards ahead.

It’s not paranoid to worry that adversaries could exploit these systems. The Associated Press reported in 2018 that China had required electric-vehicle makers operating in that country, including foreign-owned companies like Tesla, to transmit real-time data on drivers for government monitoring.

Such concerns spurred the Biden Administration to ban the sale of “connected vehicles” if their manufacturers or software are controlled by Chinese entities. The regulation provides a process for manufacturers to appeal a ban and mitigate security concerns.

The Trump team last month barred new cars from EV maker Polestar (majority-owned by the Chinese Zhejiang Geely Holding Group and its founder) from the U.S. market. Volvo, which has the same majority owner, won an exemption for unspecified reasons. While political favoritism could bias national-security reviews, the Senate bill is more problematic.

It would ban manufacturers from selling cars in the U.S. if Chinese investors own more than 15% of shares unless they get a waiver from regulators. It would also prohibit “connected” software and hardware such as battery packs if they are supplied by Chinese companies or Chinese entities hold more than a 25% equity stake in their developers.

The first threshold targets Mercedes, which has two passive Chinese shareholders that together own 19.7% of shares. Commerce Committee Chair Ted Cruz says General Motors pushed for this threshold to hamstring a competitor for its Cadillac model. The United Auto Workers also wants to punish Mercedes for opposing the union at its plant in Alabama.

Mercedes employs some 7,500 workers in Alabama and South Carolina. This spring, it announced a $4 billion investment at its Alabama plant. The Senate bill would kill these jobs and investment. Yet it has drawn 32 co-sponsors, including 25 Republicans. As Mr. Cruz mused during the hearing, why do Republicans want to harm GOP-led states?

Wall Street Journal columnist Allysia Finley wonders why GOP members of Congress continue to support budgets that compel American taxpayers to fund left-wing ‘nonprofits.’ Two slices:

House Republicans left for summer recess on Thursday after passing a budget bill with as much substance as a beach novel. The tenuous GOP majority looks to have given up on serious spending and tax reforms this year.

Many Republicans seem content serving as tax collectors for Democrats’ welfare state and the bureaucrats whose jobs depend on it. They might consider that the rise of the socialist left coincided with an eruption in federal spending that began during the pandemic, with gobs of money flowing to state and local governments and left-wing nonprofits.

California is the biggest beneficiary of the lava of largess. Since 2020, federal Medicaid payments to the state have doubled to $134.5 billion, more than the general fund of any other state. The state also received hundreds of billions of federal Covid dollars in government aid, rental assistance, public transportation and more.
…..

The GOP’s main “achievement” this year is a housing bill shepherded by Sen. Elizabeth Warren that creates a panoply of grant programs to funnel ever more taxpayer money to local governments and nonprofits. That means more power and employment for progressives like Ms. Raman and New York Mayor Zohran Mamdani’s housing czar, Cea Weaver (master’s in urban planning, New York University).

Republicans’ complaints about socialism will ring hollow as long as they persist in subsidizing them.

Kenneth Pringle writes that “Adam Smith’s ‘Wealth of Nations’ helped create the world’s wealthiest nation.” (HT Steven Kaufman). A slice:

Jefferson’s assault was political, arguing that a free people had the right to reject a tyrannical king. Smith’s was economic, asserting the right of all men to “truck, barter, and exchange”—that is, do business regardless of royal prerogatives.

To Smith (1723-1790), Wealth of Nations was a “very violent attack…upon the whole commercial system of Great Britain.” The market forces Smith unleashed would disrupt and shatter the mercantilist system practiced by Britain and the other European powers, a crown-directed strategy for hoarding gold. Free enterprise changed the equation.

My emeritus GMU Econ colleague Larry White talks with Radu Şimandan and Cristian Valeriu Păun about the social-justice agenda in central-bank research.

The Wall Street Journal reports this: “After a year of holding back on new hires, companies from tech and transportation to defense now say they need more people to work alongside AI.”

The Editorial Board of the Washington Post makes the case that Comrade Mamdani’s rent-control policy violates the takings clause of the Fifth Amendment.

A group of landlords has filed suit, arguing that the mayor’s office improperly interfered in what should be an independent regulatory decision. The board is also required to conduct an independent economic analysis before a vote, but the plaintiffs say the board had already made up its mind.

After her resignation in protest ahead of the vote, the board’s former landlord representative, Christina Smyth, said the members crossed a “legal line” because their vote wasn’t based on evidence.

A court overturning the rent freeze would be an economic gift for the democratic socialist, even if he doesn’t realize it.

New York’s rent-stabilized housing market is near its breaking point. Before the new policy, landlords were only allowed to raise rents 3 percent per year, which often did not cover maintenance costs. Nearly 60,000 rent-stabilized apartments in the city were vacant last year. That’s an increase of 8,000 from the year before.

Expect more vacancies when the freeze goes into effect in October. When San Francisco implemented rent controls in the 1990s, housing supply dropped by 15 percent.

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… is from page 318 of my late, great colleague Walter Williams’s 2015 book, American Contempt for Liberty, which is a collection of many of Walter’s columns and essays; this quotation specifically is from Walter’s April 27th, 2011, syndicated column, “Smugglers as Heroes“:

[K]eeping in mind that not everything illegal is immoral and not everything legal is moral … smugglers are heroes of sorts. The essence of what a smuggler offers is: “Government tyrants want to either prevent or interfere with peaceable voluntary exchange among individuals. I can reduce the impact of that interference.”

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Here’s a letter to a self-described “young socialist.”

Mr. Hanley:

Thanks for your email.

Unhappy with my sharing, at Facebook, Peter Suderman’s essay “The DSA, MAGA, and the New Policy Nihilism,” you write that “for all its problems, Trump supporters are right to go along with the DSA at resisting US capitalisms’ cruelty in discarding workers.” It is, you add, “brutal that the employment relationship is so insecure.”

I could respond simply by asking you to provide credible evidence that households in socialist countries – or even in countries that increase employers’ difficulty at firing workers – have a higher standard of living than do households in the U.S. I doubt that you’d find any such evidence (but would welcome you sharing it with me should you encounter it).

Instead, though, let’s look at some data. If it truly is “brutal that the employment relationship is so insecure,” then in the U.S. workers inflict such brutality on their employers much more frequently than employers inflict such brutality on their workers. From 2000 through 2019 (just before covid) the percentage of total job separations caused by non-retiring workers voluntarily quitting their jobs was 56% while the percentage of total job separations caused by workers being involuntarily discharged was 38%.* (The remaining job separations were caused by events such as retirement, death, and disability.)

If workers were as expendable to employers as you suppose them to be, workers would be desperate for jobs; few would quit and many would be fired. Voluntary quits would be far less common than involuntary discharges. Yet the opposite is true: Workers are much more likely to quit (that is, to fire their employers) than they are to be discharged (that is, to be fired by their employers).

And you can’t blame the high rate of quitting on stagnant wages. Scott Winship found that, for these same years (2000 through 2019), inflation-adjusted hourly compensation in the nonfarm business sector rose by about 33%.** He found also that this pay increase closely tracked – just as economic theory predicts – the increase in worker productivity.

Any one of the above-mentioned facts is nearly impossible to square with the DSA-MAGA notion that American capitalism generally mistreats workers. Taken together, these facts practically disprove this notion.

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

* I got these data from the Bureau of Labor Statistics’ monthly “Job Openings and Labor Turnover Survey,” and had Claude do the calculations.

** Scott Winship, Understanding Trends in Worker Pay over the Past 50 Years (American Enterprise Institute, May 2024), Table 4.

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The Editorial Board of the Wall Street Journal decries Trump’s destructive – and lawless – obsession with tariffs. Two slices:

Tariffs are an obsession for President Trump, much as climate was for the Biden Administration. How else to explain his imposition of yet another round of border taxes three months before the November election despite their political unpopularity and economic harm?

The Administration late Thursday unveiled new tariffs under Section 301 to replace the President’s Section 122 tariffs that were lapsing. These latest duties will affect some 60 economies, hitting nearly all U.S. imports, with rates from 10% to 12.5%, and they come on top of a slew of other border taxes. Wait, didn’t the Supreme Court strike down Mr. Trump’s tariffs in February? Only the emergency tariffs.

He later whipped out Section 122. A federal court this spring held that those are also illegal, but an appeals court allowed them to stay in place as litigation continues. But the law limits those tariffs to 150 days, and they expired Friday. Enter Section 301.

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Mr. Trump doesn’t seem to care about the damage since tariff costs are dispersed across businesses, consumers and workers. Customs duties have raised $163 billion in the current fiscal year through June, which excludes some $70 billion in emergency-tariff refunds. That’s a big tax increase.

Mr. Trump’s tariff defenders point to the buoyant stock market as evidence that his border taxes aren’t harmful. But last year’s tax bill—especially the business provisions like full investment expensing—has offset some of the damage from his tariffs. So has the AI investment boom.

Imagine how strong the economy would be without the tariffs and their uncertainty for business. Americans remain unhappy about the economy, and higher prices are a big reason. They know that tariffs are adding to their pain even if they don’t see the cost as a line-item on a bill. Republicans could pay the price in November.

Here’s more from Scott Lincicome on the disingenuousness of Trump’s latest round of tariffs punitive taxes on Americans’ purchases of imports. A slice:

Section 301 directs USTR to target foreign practices that injure U.S. commerce and to achieve a change to or the removal of the offending policy (some history here). If these tariffs really were about eliminating forced labor, USTR would offer to completely remove the tariffs if targeted countries implemented new laws or demonstrated tighter enforcement. (Indeed, Canada, the European Union, and Mexico all maintain or are implementing forced-labor import bans, and the EU’s arguably reaches further than America’s.) Yet USTR offers no benchmarks that a country could meet to see the tariffs eliminated. A country could even adopt the United States’ exact forced-labor framework and still see its imports tariffed—because tariffs are the point.

Liza Claire makes a strong case for this proposition: “A free society should be judged less by who becomes wealthy than by how easily people can improve their circumstances under impartial rules. Who gets wealthy matters less than how.”

Deirdre McCloskey offers a short reading list for people who are interested in mastering real economics – economics that is really about the real world.

Arnold Kling writes insightfully about finance. A slice:

Think of economic activity as your body moving. Think of financial intermediation as your lungs breathing. Moving fast makes your lungs work harder to take in oxygen. That is causality going from your activity to your lungs. Having impaired lungs that do not work well will slow you down. That is causality going from your lungs to your activity.

Phil Magness writes insightfully about Marx and “alienation.” A slice:

Instead, bibliometric evidence, such as the word diagrams above, illustrates the obvious: alienation theory is a modern invention stemming from manuscripts that remained inaccessible and unknown until the mid-20th century. Marxist theorists in that era desperately needed to plug the hole from the collapse of surplus value theory in the economic realm, and the newly-available concept of Entfremdung became their improvised solution.

Rather than suffer the dual discrediting effects of scholarly rejection by most economists and the disrepute brought by the revelation of Stalin’s human rights abuses, Marxism gained a new life in the 1960s by way of a timely reinterpretation of its core doctrines. Untethered from the surplus value basis that the historical Marx imposed upon his own economic system, his followers reinvented him as a sociologist and philosopher of the human condition.

No longer bound by the judgment of peers and practice from the political–economic realm, today’s socialists proceeded as if Marx’s theories had emerged intact after almost a century of withering scrutiny by claiming to find a novel basis for them in alienation theory. It is sufficient for Zohran Mamdani, Alexandria Ocasio-Cortez, and other Democratic Socialists of America politicians to appeal to alienation as a pretext for a sweeping Marxist overhaul of the American economy. It matters not that socialism draws its strongest support from a niche segment of well-educated Millennials (recent survey data show that socialism’s favorability is higher among people who have college degrees and especially postgraduate degrees). Alienation theory makes Marxism available to anyone, even the bourgeoisie.

The Washington Post reports this happy fact about Argentina: “Javier Milei’s market reforms continue to pay dividends, as the country receives its third credit upgrade in three months.” A slice:

Milei made tacking inflation a top priority. When he took office, the monthly inflation rate hovered around 25 percent. Last month, it sat at 1.9 percent. Milei also tackled the country’s persistent fiscal deficits and reported a modest surplus just a year after his inauguration.

This makes life better for Argentines. It also offers a model for other stagnant economies looking to rebound.

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… is from chapter 1 of William Graham Sumner’s 1885 volume, Protectionism: the -ism Which Teaches that Waste Makes Wealth:

There are only three ways in which a man can part with his product, and different kinds of taxes fall under different modes of alienating one’s goods. 1st. He may exchange his product for the product of others. Then he parts with his property voluntarily, and for an equivalent. Taxes which are paid for peace, order and security, fall under this head. 2d. He may give his product away. Then he parts with it voluntarily without an equivalent. Taxes which are voluntarily paid for schools, libraries, parks, etc.,etc., fall under this head. 3d. He may be robbed of it. Then he parts with it involuntarily and without an equivalent. Taxes which are protective fall under this head. The analysis is exhaustive, and there is no other place for them. Protective taxes are those which a man pays to his neighbor to hire him (the neighbor) to carry on his own business. The first man gets no equivalent. Hence any one who says that a tariff is not a tax would have to put it in some such category as tribute, plunder, or robbery. In order, then, that we may not give any occasion for even an unjust charge of using hard words, let us go back and call it a tax.

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The Editorial Board of the Wall Street Journal hopes that the U.S. Supreme Court reins in the use of the banana-republic practice of civil asset forfeiture. Two slices:

One progressive fiction about the Supreme Court is that it’s busy serving billionaires and big corporations. Far more often its best work is defending individuals against state power, and on Monday the Justices agreed to hear the case of an Alaskan bush pilot who had his airplane seized over a few cases of beer (Jouppi v. Alaska).

…..

Governments increasingly use criminal and civil forfeitures and fines to pad their budgets. In 2023, 45 states collected nearly $300 million, according to the Institute for Justice, which represents Mr. Jouppi. This aggressive law enforcement diminishes American civil liberties, and the excessive fines clause should be a shield against such overreach. Mr. Jouppi’s plane sure looks like it qualifies.

Scott Lincicome makes clear that “Trump’s new tariffs aren’t about forced labor — they’re about restoring the tariff wall.” A slice:

In my new column at The Dispatch, I show why these tariffs have almost nothing to do with forced labor and instead are just “a ham-fisted way to reinstall Trump’s tariff wall and protect it from another IEEPA-like defeat in federal court.” Five issues stand out:

1. The administration said the tariffs were coming before the investigation ended. President Trump, Treasury Secretary Bessent, and US Trade Representative Greer all publicly and explicitly promised that the tariffs and their revenue would replace the struck-down IEEPA regime before the investigations even started.
2. The requisite report on “forced labor” is remarkably thin. USTR’s investigation only took 82 days and generated a 98-page report to cover 60 economies, devoting little more than half a page to each, much of it the exact same empty passages copied and pasted 60 times—far short of the rigor demanded of such a consequential and far-reaching trade action. The report also contained no evidence or analysis – none – of targeted economies’ forced labor policies causing actual harm to US companies or commerce. It’s all just assumed. Nor did the USTR explain why it applied the same punitive 12.5 percent tariff rate to Angola, Libya, Russia, Venezuela, and Kazakhstan—developing countries that rank low on the Walk Free forced labor index (and have other issues!)—as it did to developed, “good actor” countries like Norway, Japan, Switzerland, and Australia.
3. The United States is hardly a forced labor angel. Section 307 of the Tariff Act of 1930 has prohibited imports made with forced labor, but was lightly enforced for over 80 years due to wide exceptions, and the Trump administration’s enforcement of the law has been much more lenient than the Biden administration’s efforts. Furthermore, the US ranks 19th among the 60 economies for the prevalence of forced labor.
4. The tariff cure dramatically overshoots the forced labor disease. Some back-of-envelope math puts a proportionate tariff at 0.5 to 0.84 percent; Peterson Institute economist William Cline, using a different model, gets 0.23 to 0.25 percent. USTR is proposing 10 to 12.5 percent, a rate and resulting revenue (see figure below) that far exceed what could be considered a proportional response to the problem.

Eric Boehm explains that Trump’s new ‘forced labor’ tariffs are likely illegal. A slice:

Ostensibly, these tariffs are meant to combat “forced labor.” The Trump administration says the tariffs are the result of an investigation into 60 foreign economies that “fail to prohibit or to effectively enforce a prohibition on the importation of goods produced wholly or in part with forced labor.”

Immediately, a logical problem emerges. The announcement says that the 10 percent tariff will apply even to countries that “impose a forced labor import prohibition,” as long as the administration believes that prohibition is not being adequately enforced. It is unclear what, exactly, a foreign country would have to do to get removed from that list. That makes it fairly obvious that combating forced labor is a pretext for what the Trump administration really wants to do: have more tariffs.

And here’s National Review‘s Andrew Stuttaford on Trump’s new tariffs punitive taxes on Americans’ purchases of imports. A slice:

After the Supreme Court struck down tariffs introduced under the International Emergency Economic Powers Act, the president responded by announcing a new global tariff of 15 percent. This was based on Section 122 of the Trade Act of 1974, which allows for the application of various Band-Aids to problems arising out of large and serious U.S. balance-of-payments deficits. The administration’s use of Section 122 to impose tariffs (which was unprecedented) has come under legal attack. But at this point that’s moot (apart from the tricky issue of the tariffs that have already been paid), as Section 122 tariffs could last no longer than 150 days, a period that has just expired.

Protectionists can relax, however. The administration will now be taking action under the Trade Act’s Section 301, a widely drawn provision that allows the U.S. to take action if its trade representative determines that an act, policy, or practice of a foreign country is unreasonable or discriminatory and burdens or restricts U.S. commerce, and that action by the United States is appropriate. It has been used to impose tariffs fairly frequently before. In this case, tariffs have been slapped on countries for failing to “impose and effectively enforce a prohibition on the importation of goods produced with forced labor.”

The timing is . . . convenient.

GMU Econ alum Erik Matson writes wisely about Alexander Hamilton. A slice:

The real tell for Hamilton comes in the “Report on Manufactures” when he considers potential counterarguments to his positions. He spends the opening sections of the “Report” establishing the point that manufacturing is no less productive than agriculture. He proceeds to make his case that a booming manufacturing sector would serve America well—and be incredibly profitable. He then takes on the natural question: If manufacturing would be so profitable in America, why does the government need to subsidize it? His answer is surprising, and in a way, it is the centerpiece of his entire outlook in political economy.

Americans—like all people—in Hamilton’s view are too much inclined toward agriculture, too averse to risk-taking, and too committed to the status quo. Americans want to move westward and be left alone. Americans are not sufficiently aware of or interested in profit opportunities. Americans for Hamilton can perhaps be captured with J.R.R. Tolkien’s description of hobbits: “[T]hey love peace and quiet and good tilled earth: a well-ordered and well-farmed countryside was their favourite haunt. They do not and did not understand or like machines more complicated than a forge-bellows, a water-mill, or a hand loom, though they were skillful with tools.”

In Hamilton’s own words: “The desire of being an independent proprietor of land is founded on such strong principles in the human breast, that, where the opportunity of becoming so is as great as it is in the United States, the proportion will be small of those… who would be diverted from it towards manufactures.”

“Experience teaches,” continued Hamilton, “that men are often so much governed by what they are accustomed to see and practise, that the simplest and most obvious improvements, in the most ordinary occupations, are adopted with hesitation, reluctance, and by slow gradations.” So, Hamilton believed the federal government ought to subsidize industrial activity as a way of inspiriting an overly conservative, agricultural population to take up profitable industrial activities.

The irony is that Hamilton himself was an incredibly entrepreneurial and ambitious man, surrounded by an entire cohort of entrepreneurial, ambitious men who rebelled against the most powerful empire in the world and forged a brand-new model of government. Hamilton had every reason to think that Americans, by virtue of self-selection, were of all people less inclined to the status quo than most people and more attuned to profit opportunities. Tocqueville certainly thought so when he visited America in the 19th century: “The American follows not only a calculation of his gain, but an impulse of nature” in trade. But for one reason or another, Hamilton was simply distrustful of the natural market process

Bob Gelfond writes insightfully about free-market money.

The Editorial Board of the Wall Street Journal applauds U.S. Supreme Court Justice Elena Kagan’s defense of the Court against the charge that it’s a rubber-stamp for Trump. A slice:

The Supreme Court is no “rubber stamp” for President Trump. Take it from liberal Justice Elena Kagan. “That is a bad rap,” she said, defending the honor of her institution and her colleagues this week at a Ninth Circuit Court of Appeals judicial conference. She cited especially this year’s 6-3 ruling against President Trump’s effort to aggrandize his tariff powers.

“Tariffs is probably the key policy issue for this President. I mean, something he campaigned on, he ran on, he cared an enormous amount about,” Justice Kagan said, according to Politico. “I don’t think that there are all that many decisions in the recent times, where a court strikes down such an important policy to a sitting President.” A glaring counter-example from 2012 is the High Court’s, uh, creative 5-4 decision to uphold ObamaCare.

Mr. Trump has pushed the bounds of executive power, but so did his Oval Office predecessors, and the current Administration’s record at the Court is mixed at best. Another big one for the loss column this term was Mr. Trump’s order trying to redefine birthright citizenship.

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… is from page 68 of Steven Pinker’s 2025 book, When Everyone Knows That Everyone Knows…:

Rationality is not like a buyer and seller haggling over a price until they split the difference. After all, why should we expect reality to just happen to lie midway between the convictions of two people who find themselves in an argument?