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Here’s a letter to Newsweek:

Editor:

Reporting on Kamala Harris’s first solo t.v. interview you uncritically write that “she will also work on the ‘housing supply shortage’ by providing first-time homebuyers a $25,000 downpayment assistance to ensure the American dream is no longer ‘elusive’ for young citizens” (“Kamala Harris’ First Solo TV Interview Key Takeaways,” Sept. 13).

Harris’s proposed “$25,000 downpayment assistance” will only further subsidize housing demand; it will do absolutely nothing to relieve the “housing supply shortage.” To achieve the latter requires roll-backs of zoning and other land-use restrictions, elimination of rent-controls, and reductions of tariffs that artificially raise the prices of construction materials.

Giving people more of other people’s money to spend on housing will only raise the prices of the existing stock of housing without making more housing available. America’s housing problem isn’t inadequate demand; it’s government-engineered inadequate supply – a problem the severity of which will not be lessened by Harris’s scheme.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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Here’s an e-mail to someone who wonders why economists oppose tariffs given that (1) government needs revenues, and (2) taxing consumption is economically superior to taxing income.

Mr. E__,

I agree that, if we must have taxes, consumption taxes are better than taxes on income or on other productive activities such as capital accumulation. And tariffs are indeed sometimes taxes on consumption – but only sometimes. Approximately half of U.S. imports are raw materials or intermediate goods used to produce outputs in America. It’s not clear that such tariffs are best described as falling on consumption.

More generally: economists’ opposition to tariffs is opposition to tariffs levied for purposes of protection, not for purposes of raising revenue. The economic objection to tariffs – the economic case for free trade – is rooted exclusively in the recognition that artificially raising the prices of imported goods and services does not, contrary to protectionist myth, improve the living standards of people in the home country. Tariffs meant for revenue purposes are a categorically different animal. Revenue tariffs, quite unlike protective tariffs, achieve their goal only insofar as they do not obstruct imports.

Interesting analyses can (and should) be done – and debates had – about the merits of relying more heavily on revenue tariffs. (After all, such tariffs were, until 1914, a major source of U.S. government revenue.) Some economists will endorse this greater reliance on revenue tariffs while others will oppose it. But nearly every economist, regardless of how he or she comes down on the merits of revenue tariffs, will oppose – rightly so, in my view – protective tariffs.

In summary, economists’ objection to tariffs is more accurately described as objection to protection – and objection to protection does not imply objection to using tariffs to raise revenue.

Don Boudreaux
George Mason University

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David Henderson makes a strong case that Kamala Harris as president would be even worse on the government-regulation front than would Donald Trump.

Randy Holcombe understandably worries that President Harris will cause housing prices to further rise.

Whatever might be the dangers of Kamala Harris, Boston Globe columnist Jeff Jacoby sensibly argues that her position as the Democratic nominee isn’t an offense against democracy. A slice:

Primary elections do not confer democratic legitimacy on a party’s presidential nomination process and the absence of primary elections doesn’t invalidate that legitimacy. Otherwise, no presidential nominee for most of American history — not Jefferson, not Lincoln, not Kennedy — could have been regarded as legitimate. Until 1972, political parties never relied on the outcome of primary elections to choose their nominees. Primaries weren’t even invented until the early 20th century, and they were regarded largely as nonbinding “beauty contests” — a way to gauge public sentiment and generate interest but not to displace the role of party leaders in selecting a nominee.

It was only after the 1968 election, when the Democratic Party changed its rules, that primary results were made binding. But that didn’t affect the democratic quality of the parties’ subsequent nominees. Unlike general elections, which are true democratic public contests, a primary election is no more than a party’s private, internal process. Under our system, political parties have no constitutional status and how a party chooses its nominees — through primaries, caucuses, or the consensus of party leaders — is irrelevant. Only when voters choose between nominees does democratic legitimacy come into play.

This letter by Blaine McCormick, in today’s Wall Street Journal, is excellent:

Karl Rove overlooks one of the few positive outcomes for Mr. Trump during the debate (“A Catastrophic Debate for Trump,” op-ed, Sept. 12). Early on, Ms. Harris announced to her audience that “Donald Trump has no plan for you.” It seemed such an important point that she sent out the line on her social media too.

Her proclamation makes voting for Mr. Trump immensely more attractive. I am thankful for any presidential candidate who has no plan for me. The federal government has tried to manage a retirement plan for me, and it is a horrible mess compared to what I could have done on my own with that same money.

I prefer to make as many of my own plans as possible. The fewer people in Washington who have plans for me, the better.

Jennifer Huddleston reports on the “misguided antitrust investigations in AI.” A slice:

American companies were leaders during the internet era, in part due to our country’s light-touch approach to regulation. By allowing entrepreneurs and consumers to determine the best applications for this technology, both success and failure were determined by the market — not government bureaucrats. America’s leading tech companies became global household names.

Here’s the abstract of a new paper by Randy Barnett and GMU Law alum Josh Blackman:

Is there a “crisis” in teaching constitutional law? In our view, there is not. Still, we can empathize. As libertarian-conservative-ish law professors, for years we taught Supreme Court decisions that we disagreed with. We teach constitutional law as a historical narrative that began at the founding and continues to this day. The narrative approach underscores the contingent nature of what at any given time appears to be fixed and unchangeable. The narrative also remains remarkably stable from year to year even as new cases are added. This approach also makes preparing one’s syllabus relatively easy to do each year, regardless of what the Supreme Court may have decided in its most recent term.

The pedagogy we developed was premised on a Supreme Court jurisprudence we largely disagreed with. Indeed, we still disagree with much of this jurisprudence, especially the cases that were decided right before, during, and after Reconstruction. While some of these cases, like Prigg, Dred Scott, and Plessy are now in the anti-canon, others like Slaughter-House, Cruikshank, and the Civil Rights Cases remain good law. This pedagogy worked before 2016 and it will continue to work no matter what happens in the future. We submit that the time is ripe for liberal and progressive professors, especially those who are having trouble coping with the current Supreme Court, to consider adopting our narrative approach to the constitutional canon and anticanon.

Part I of this essay focuses on our approach to teaching the constitutional canon. Part II traces the evolution of our casebook from the First Edition to the Fourth Edition, and previews the forthcoming Fifth Edition. We demonstrate that the narrative about the development of the constitutional canon has remained remarkably stable. Even after accounting for the recent terms, our syllabus will be about 90% the same as it was in 2019. Part III addresses how we, and other like-minded law professors, managed to teach decisions that we fundamentally disagreed with. For those professors who are pained by the Supreme Court’s current doctrines, our narrative approach provides succor. Such professors can, for example, teach what they believe to be “the good old days” of the Warren and Burger courts in contrast to what now exists. Students can then decide for themselves which era they prefer.

Jack Nicastro is unimpressed with the USPS’s new vehicles.

GMU Econ alum Adam Michel digs into Harris’s and Trump’s proposals for “tax reform.”

Ian Miller tweets: (HT Jay Bhattacharya)

It’s nice to hear some politicians admit lockdowns were a mistake, but it wasn’t just lockdowns — forcing people to wear masks for years when they don’t work was inexcusable. Vaccine passports were an abhorrent anti-science failure. They were many, many mistakes.

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… is from page 10 of C. Jackson Grayson’s 1974 book (with Louis Neeb), Confessions of a Price Controller:

Spectres of the disappearance of peanut butter, applesauce, lumber, frozen foods, and other commodities were all in the book of “horror stories” of what happens when tight clamps are applied to the economic arteries of a dynamic economy.

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Here’s yet another letter to AmericanCompass.org.

Editor:

Attempting to justify industrial policy, Skyler Adleta slays a straw man and then gets key facts wrong (“Is The U.S. Workforce Prepared to Reindustrialize?” Sept. 11).

An example of the former is this:

Pragmatism and dynamism expressed through industrial policy is—in the eyes of the scoffers—uncool, frivolous, and economically sacrilegious. The scoffers might have a point if the only measure of an economy’s orthodoxy is devotion to free-market fundamentalism. But a nation’s economy is also measured by its ability to bolster national security, ensure global competitiveness, and secure general prosperity for its people. For this reason, industrial policy must exist within a nation aiming to be secure, competitive, and civic-minded.

Even ignoring the question-begging nature of the last quoted sentence, this is verbal chicanery. Those of us who oppose industrial policy do so not because we’re mindlessly devoted to some creed but, rather, because we have reason to believe that the free market is the best means “to bolster national security, ensure global competitiveness, and secure general prosperity for its people.” Perhaps we’re mistaken, but at least we offer what Adleta and other proponents of industrial policy never do, namely, an actual, credible account of how economic decision-makers in free markets are both informed and incited to act in ways that promote these goals.

An example of Adleta’s factual inaccuracy is his assertion that “workers aren’t being paid commensurate with what they produce.” To justify this claim he links to a piece that Oren Cass wrote in response to Scott Winship’s finding (and also that of Michael Strain) that worker pay has in fact kept pace with worker productivity.

But Cass’s piece, despite the impression he wants to convey, does not contradict Winship’s and Strain’s finding. Using verbal legerdemain, Cass focuses on another of Winship’s findings – specifically, that not all workers have experienced equal increases in productivity – to imply that Winship is on board with American Compass’s false tale of underpaid American workers.

One can argue about why some workers have experienced smaller increases in productivity than have other workers. But a finding that different workers experienced different increases in productivity is emphatically not a finding that worker pay has failed to keep pace with worker productivity. Adleta is simply wrong to assert that worker pay has become decoupled from worker productivity.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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Writing in the Wall Street Journal, George Washington University law professor Jonathan Turley details the left’s assault on the U.S. Constitution. Two slices:

Several candidates for the 2020 presidential nomination, including Ms. Harris, said they were open to the idea of packing the court by expanding the number of seats. Mr. Biden opposed the idea, but a week after he exited the 2024 presidential race, he announced a “bold plan” to “reform” the high court. It would pack the court via term limits and also impose a “binding code of conduct,” aimed at conservative justices.

Ms. Harris quickly endorsed the proposal in a statement, citing a “clear crisis of confidence” in the court owing to “decision after decision overturning long-standing precedent.” She might as well have added “because you don’t like the outcome.” Sen. Sheldon Whitehouse (D., R.I.) has already introduced ethics and term-limits legislation and said Ms. Harris’s campaign has told him “that your bills are precisely aligned with what we are talking about.”

The attacks on the court are part of a growing counterconstitutional movement that began in higher education and seems recently to have reached a critical mass in the media and politics. The past few months have seen an explosion of books and articles laying out a new vision of “democracy” unconstrained by constitutional limits on majority power.

…..

The cry for radical constitutional change is shortsighted. The constitutional system was designed for bad times, not only good times. It seeks to protect individual rights, minority factions and smaller states from the tyranny of the majority. The result is a system that forces compromise. It doesn’t protect us from political divisions any more than good medical care protects us from cancer. Rather it allows the body politic to survive political afflictions by pushing factions toward negotiation and moderation.

When Benjamin Franklin said the framers had created “a republic, if you can keep it,” he meant that we needed to keep faith in the Constitution. Law professors mistook their own crisis of faith for a constitutional crisis. They have become a sort of priesthood of atheists, keeping their frocks while doffing their faith. The true danger to the American democratic system lies with politicians who would follow their lead and destroy our institutions in pursuit of political advantage.

John O. McGinnis and Mike Rappaport make the case that “to properly understand and interpret the Constitution, originalist analysis should embrace legal meaning—not just lay meaning.”

My intrepid Mercatus Center colleague, Veronique de Rugy, ponders an efficiency commission chaired by Elon Musk. A slice:

My research on this topic suggests that only 5 percent of the improper payments are underpayments, and most of the overpaid money is never recovered. Medicare, Medicaid, and that darling of the right and the left, the earned income tax credit, are all systematically at the top of the improper-payment culprit list every year.

Yet nothing happens except that the improper payments grow. It’s another sign that government officials, Republican or Democrat—probably including your own House and Senate representatives, dear readers—have very little respect for our hard-earned dollars. We shouldn’t tolerate such abuse.

Arnold Kling writes insightfully about the cowardly use, in political and policy discussions, of the passive voice. A slice:

In public policy, pundits turn to passive voice when the idea of giving someone authority to deal with a problem sounds scary. I can think of several examples.

In passive voice, it is easy to say “All illegal immigrants should be deported.” But in active voice, that means sending government agents in uniform to knock on everyone’s door, demanding proof of citizenship from those inside. Your door and my door would be knocked on, because until they try everyone’s door, the agents have no way of knowing which residences house illegal immigrants and which do not.

In passive voice, it is easy to say, “Misinformation on social media should be banned.” But in active voice, that means assigning specific individuals to sift through social media content and determine what is misinformation. Presumably, they will need help from software, but specific people with specific ideas will have to design that software. The people writing the software and making the decisions will be ordinary humans, with their flaws and biases.

Juliette Sellgren talks with Yuval Levin about the American covenant.

Vance Ginn explains that “tariffs ‘protect’ insiders, while Americans pay the price.” A slice:

The current account deficit with other countries is balanced by a capital account surplus, where foreign savings flow into the US, helping finance our national debt and keeping interest rates lower than they would otherwise be. However, the flow of funds is slowing as some countries shift away from the US dollar, opting for gold and other assets. This trend poses a risk to the US economy by potentially restricting our ability to trade with other countries and raising the cost of borrowing as interest rates rise. This shift from the dollar, known as de-dollarization, underscores the importance of maintaining strong international trade relationships and avoiding protectionist policies alienating trading partners. As global confidence in the US dollar wanes, the economic benefits of foreign investment could diminish, leading to higher costs for Americans.

David Henderson is correct: “Subsidies to the press endanger free speech.”

Bob Graboyes gets a jump on things by doing a postmortem on the 2023 presidential election.

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… is from page 231 of Thomas Sowell’s March 17th, 1986, column titled “An ‘Epidemic’ of Irresponsibility” as this column is reprinted in Compassion Versus Guilt, a 1987 collection of some of Sowell’s popular essays:

Personal responsibility is anathema to deep thinkers, for that would undermine their role as rescuers of the “victims” of society.

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Scott Lincicome debunks several myths about tariffs. Two slices:

It’s similarly misguided to claim, as some misguided souls recently have, that protective tariffs don’t increase U.S. prices. The basic logic and economics here are again straightforward: If tariffs didn’t increase import prices, then they wouldn’t protect U.S. companies from that foreign competition; and if those U.S. companies were already selling at or below the import price, then they wouldn’t need a tariff to change American importers’ and consumers’ behavior. (Nobody—not even me—is “buying foreign” just for the fun of it.) By forcing importing firms to either pay a tariff or switch to more expensive U.S.-made goods, protective tariffs will push the domestic market prices of those goods higher than they’d otherwise be. If they didn’t, then they wouldn’t protect anything.

Furthermore, high or unpredictable tariffs can reduce potential supply and give domestic producers more market power over U.S. consumers who, thanks to the tariff, have fewer alternatives, and this can and often does increase the prices of the American-made goods even higher than they were before the tariff. These kinds of price-boosting effects are precisely why U.S. manufacturers—like this guy—lobby for tariff protection. And we see them all the time in the economic data.

For example, Obama-era tariffs on washing machines, a recent paper showed, didn’t raise U.S. prices because they weren’t protective. (Korean companies simply moved to other countries to avoid the tariffs.) Trump-era tariffs on those same goods, by contrast, were global and did significantly raise U.S. prices of both washers and dryers by about $90 each.

…..

The empirical literature from dozens of countries over many decades again confirms the theory: In case after case after case—and regardless of the model used—economists have found that tariffs reduce national economic output and make a nation worse off on net, while tariff liberalization generally does the opposite. (One of the more popular trade models, if anything, understates the output gains from trade liberalization.)

Wall Street Journal columnist Jason Riley argues that “minorities reap the benefits when affirmative action ends.” A slice:

More important, however, black graduation rates rose sharply after racial preferences ended and more students were funneled into schools throughout the University of California system that better matched their academic qualifications. The obsession with the racial composition of first-year students at elite schools is misplaced. The more consequential metric is what percentage of black students in the Class of 2028 make it to senior year and graduate with a degree in their intended major.

Before California’s prohibition on racial preferences, black enrollment at UC Berkeley had been growing, yet only about a quarter of black students were graduating within five years, compared with two-thirds of white students. The end of racial preferences prompted a redistribution of students. System-wide, the number of black and Hispanic freshmen who graduated in four years increased by more than 50%, as did the number who earned STEM degrees and graduated with grade-point averages of 3.5 or higher.

Bruce Yandle decries politicians’ promises of free lunches.

Writing in the Wall Street Journal, Phil Gramm and Jodey Arrington report that “welfare is what’s eating the budget.” Two slices:

Ask any budget expert in Washington to explain the ballooning deficit and debt, and Social Security and Medicare will be high on the list of causes. That’s wrong. The real driver, the elephant in the room, is means-tested social-welfare spending—Medicaid, food stamps, refundable tax credits, Supplemental Security Income, Temporary Assistance for Needy Families, federal housing subsidies and almost 100 other programs whose eligibility is limited to those below an income threshold.

True, Social Security and Medicare are a drain on general revenue and will become big fiscal problems if not reformed. But they aren’t the major source of our current fiscal crisis, because both are financed in large part by dedicated payroll taxes. Since its inception, Social Security has produced cash surpluses 60% of the time. In 2023 Social Security payroll taxes funded 88.9% of benefits. The cost of Social Security’s Old-Age, Survivors and Disability Insurance program, net of payroll tax collections, was only $88.1 billion. Medicare payroll taxes and premiums funded 49.7% of Medicare expenditures, producing a net cost of $509 billion.

…..

Demand for reform would be even stronger if the public understood how generous social-welfare benefits are. In reporting household income, the Census Bureau doesn’t count 88% of transfer payments made to households that are defined as being poor. The census doesn’t count refundable tax credits (for which the beneficiary receives a check from the Treasury), food-stamp debit cards, free medical care through Medicaid, or benefits from about 100 other federal transfer payments as income to welfare recipients. When those benefits are counted as income, 80% of those who are today counted as being poor are no longer poor, and almost half have incomes equivalent to American middle-income earners.

Chelsea Follett draws lessons from the history of food.

Emma Camp documents yet further evidence that Donald Trump is unfit to hold power:

“ABC took a big hit last night,” Trump said during an interview on Fox and Friends Wednesday morning. “I mean, to be honest, they’re a news organization. They have to be licensed to do it. They ought to take away their license for the way they did that.”

[DBx: To anticipate negative reaction that I know is forthcoming from some Cafe patrons, I again note that to point out that Mr. X is unfit to hold political power is not to imply that some or even any of Mr. X’s political opponents are fit to hold political power.]

Here’s my intrepid Mercatus Center colleague, Veronique de Rugy, on the Harris-Trump “debate.”

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… is from page 4 of my late, great teacher Leland Yeager‘s 1968 book, The International Monetary Mechanism:

Low wage levels – the famous “cheap foreign labor” – are an inevitable result of the foreigners’ relatively low over-all efficiency or productivity, but they are also what enables foreigners to sell us the goods in which their disadvantage is smallest and to pay for our goods that they could make themselves only at relatively greater disadvantage. Low wages let the foreigners take part in beneficial international trade and so become less poor than otherwise. We also gain, even when trading with inefficient, ill-paid foreigners. Shrinkage of particular industries in our country does not prove otherwise. Shifting labor and resources out of our least superior into our most superior lines of production is a key part of the process of reaping the gains from trade.