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The Editorial Board of the Wall Street Journal decries the Trump administration’s “crony socialism” regarding American ‘rare earths’ producers. Two slices:

What would Republicans have said if the Biden crowd acquired government stakes in companies with ties to its friends and family? Well, that’s more or less what the Trump team is doing to little political objection. State capitalism and political cronyism are in fashion these days, despite a history of failure.

The Commerce Department recently announced a $1.3 billion loan and $277 million in direct funding for USA Rare Earth, in return for an equity stake and warrants that are worth about 10% of the company. USA Rare Earth is developing a Texas mine that contains 15 of the 17 rare-earth elements and a magnet manufacturing plant in Oklahoma.

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The Administration has also taken stakes in other mineral companies, including MP Materials, Lithium Americas, Trilogy Metals and Vulcan Elements. Donald Trump Jr.’s 1789 Capital venture fund invested in Vulcan months before the Administration announced its funding and equity stake. Sus, as the young people say.

Trump officials don’t care about such apparent conflicts. But Republicans in Congress could put limits on state socialism in appropriations bills. Think of how a future Democratic President would imitate the Trump investment model—how about the government buying shares in electric-vehicle startups?

A better idea to counter China’s rare-earth dominance is to coordinate development of mines and processing facilities with allies, as the White House has sought to do with Australia. The Administration could also guarantee government purchases of rare earths and fast-track permitting, as Mr. Trump’s Operation Warp Speed did for Covid vaccines.

It’s a mistake to think that the only way to beat China is to emulate its statist model.

Eric Boehm exposes some of the many flaws in Trump’s recent attempt in the Wall Street Journal to justify the administration’s punitive taxes – a.k.a. tariffs – on Americans’ purchases of imports. Three slices:

President Donald Trump argued in a Saturday Wall Street Journal op-ed that his myriad tariffs have boosted America’s economy without causing the harms that many economists predicted. “We have proven, decisively, that, properly applied, tariffs do not hurt growth—they promote growth and greatness, just as I said all along,” Trump claimed.

That conclusion rests on misleading claims, inaccurate data, and logical fallacies.

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“According to a recent study by the Harvard Business School,” Trump wrote, foreign producers and middlemen “are paying at least 80% of tariff costs.”

In fact, the paper he cited concludes that “tariffs led to both rapid and gradual retail price increases.” The study found that “prices began rising within days of the March announcements and continued to increase steadily over subsequent months,” and also that “imported goods rose roughly twice as much as domestic goods relative to pre-tariff trends.”

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In this case, the sectors of the economy that are supposed to be benefiting from Trump’s tariffs—manufacturing and other forms of industrial production—aren’t even realizing those benefits, because higher prices on raw materials make it more difficult to manufacture things. For example: American businesses are now paying much higher prices for aluminum than manufacturers elsewhere in the world. That’s a good way to discourage manufacturing, not to promote it.

In response to the headline “Steel Tariffs Not Hurting U.S. Manufacturing, Nucor Chief Says,” Alexandra F. Baldwin tweets: (HT Scott Lincicome)

“Removal of electric electric fencing has been great for sheep” – Wolf

Securities and Exchange Commission chairman Paul Atkins explains “the historic tax relief for American investors you haven’t heard about.” A slice:

In late September, as a government shutdown loomed, the SEC initiated a watershed change to allow what are known as “exchange-traded fund share classes” to be grafted onto traditional mutual fund structures. That story was overshadowed by government gridlock, but as the SEC grants the largest wave yet of ETF-share-class relief, the benefits of this change merit fresh attention.

Mutual funds and ETFs, which offer similar value propositions, will be familiar to many savers and investors. Both are efficient vehicles that allow everyday investors to build wealth through investing in public company equities, bonds and, more recently, digital assets. The primary difference is that ETF shares trade on stock exchanges throughout the day, while mutual fund transactions happen once a day, at market close.

ETFs and mutual funds also differ significantly in their structure, especially when it comes to tax liability. Many mutual fund investors are all too familiar with the unpleasant year-end tax surprise that can result from a fund selling securities to meet redemptions from some exiting investors and passing on the resulting capital gains — and the associated tax liability — to the fund, and thus to all shareholders, even those who did not redeem their shares.

Unlike mutual fund shareholders, ETF investors do not usually bear the tax burden of other investors’ redemptions. When ETF investors exit their positions, they sell to others in the general stock market, which generally does not trigger a tax bill for other investors.

Now, by allowing fund sponsors to offer these products, the SEC is enabling more sponsors to combine these two approaches with appropriate protections. That will allow more mutual fund investors to access the favorable tax efficiency of ETFs.

While it’s too early to say with certainty how this will unfold, it is not unreasonable to anticipate a decidedly significant capital gains tax reduction. The Investment Company Institute (ICI) has estimated that nearly $175 billion of capital gains distributions were allocated from mutual funds held in taxable accounts in 2024, so it’s clear that this change has the potential to deliver tremendous tax savings to investors.

Neal McCluskey makes a strong case for this: “Basically, federal student aid fuels tuition inflation, credential inflation, and fraud. It is also unconstitutional … and time for it to end.”

Jared Dillian ponders Trump’s recent express wish to “drive housing prices up.” Here’s his conclusion:

In the U.S., we build about 1.4 million new homes a year—not enough to keep up with population growth, and this is after a decade of underbuilding in the wake of the financial crisis. The solution to the housing crisis is more supply, not less. Trump’s views on the housing market are, for lack of a better word, insane.

This letter in today’s Wall Street Journal by GMU Econ alum Dave Hebert is great:

In his Jan. 30 op-ed “The World’s Worst Budget Process,” former Rep. Van Taylorcorrectly identifies the Congressional Budget and Impoundment Control Act of 1974 as a problem in the federal budget process. But that was a Band-Aid solution to the real problem: the Second Liberty Bond Act of 1917, which created the first debt ceiling of $15 billion. The Big Beautiful Bill Act raised this to $41 trillion, over 2,700 times higher than it was in 1917.

Prior to the 1917 law, Congress could still incur debts but it had to do so with project-specific authorization. Major purchases, like the Panama Canal and the Louisiana Purchase, were financed this way, with Congress defending the decision to incur debt and demonstrating a plan to repay it. This resembled a loan application, while today’s deficit spending evokes credit card bills. Importantly, because debts were tied to specific projects, voters could hold elected officials accountable for their fiscal decisions.

President Trump (and Nancy Pelosi) are right that we need to end the debt ceiling once and for all. But we should return to our pre-1917 roots and require Congress to apply for project-specific loans instead of giving themselves a credit card.

Richard Burkhauser and Kevin Cornith look at poverty in the U.S. from 1939 through 2023. Here’s the abstract of their new paper:

We compare trends in absolute poverty before (1939–1963) and after (1963–2023) the War on Poverty was declared. Our primary methodological contribution is to create a post-tax post-transfer income measure using the 1940, 1950 and 1960 Decennial Censuses through imputations of taxes and transfers as well as certain forms of market income including perquisites (Collins and Wanamaker 2022), consistent with the full income measures developed by Burkhauser et al. (2024) for subsequent years. From 1939–1963, poverty fell by 29 percentage points, with even larger declines for Black people and all children. While absolute poverty continued to fall following the War on Poverty’s declaration, the pace was no faster, even when evaluating the trends relative to a consistent initial poverty rate. Furthermore, the pre-1964 decline in poverty among working age adults and children was achieved almost completely through increases in market income, during which time only 2–3 percent of working age adults were dependent on the government for at least half of their income, compared to dependency rates of 7–15 percent from 1972–2023. In contrast to progress on absolute poverty, reductions in relative poverty were more modest from 1939–1963 and even less so since then.

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… is from page 175 of my late, great colleague Walter Williams’s 1982 book America: A Minority Viewpoint:

In a growing economy there is more pie to go around – enabling everyone to have a bigger slice and without the interference of government redistribution programs.

DBx: Yes.

If not in theory, typically in practice, a government generally enriches some people at the greater expense of other people – other people largely within that government’s own jurisdiction. In theory and in practice, free markets over time unfailingly enrich everyone within their compass – including people who, at any given moment, must adjust to market forces in ways that these people would prefer to avoid.

The market is a truly great game.

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Here’s a letter of mine that is just published by the Washington Post:

George E. Bogden’s justifications for President Donald Trump’s tariffs in his Jan. 29 online op-ed, “Forget TACO. It’s GUAC that matters with Trump’s tariffs,” were far from being the nutritious feast that he supposes.

Bogden wrote that “tariff opponents judge the policy on whether it conforms to an economist’s ideal of friction-free markets.” We opponents point out that tariffs that enable some domestic industries to expand necessarily draw resources away from other domestic industries, causing these other domestic industries to shrink. This effect is as inescapable in real-world markets, with all of their frictions, as in “friction-free” textbook markets.

We also explain that tariffs used as bargaining chips, which are the focus of Bogden’s praise, are inconsistent with the president’s wish to increase American manufacturing or to raise revenue. Because bargaining chips are withdrawn when opponents capitulate, such tariffs won’t protect manufacturing long enough to spark increased investment. Nor are such chips a useful or reliable source of revenue.

It’s as unsurprising as it is undeniable that, as Bogden documents, Trump’s tariff threats often pressure foreign governments to alter their policies in ways that at least appear to suit Trump’s fancies. It’s equally undeniable that Trump’s tariff sturm und drang creates economic inefficiencies and policy and market uncertainties in the U.S., as well as ill will among the allies that America will be sorry to have antagonized if and when tensions with China further intensify.

Donald J. Boudreaux, Fairfax

The writer is the Martha and Nelson Getchell chair for the study of free market capitalism at the Mercatus Center at George Mason University.

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Christopher Freiman celebrates “the warmth of cooperation.”

Former U.S. Treasury secretary W. Michael Blumenthal, who just turned 100 years of age, reflects on the current state of America. Two slices:

I came to the U.S. as an immigrant, seeking freedom, opportunity and a better life. It was the late 1940s, and I had $60 in my pocket. Immigrants weren’t suspect in those days. Americans welcomed me and wished me luck. Five years later, I became a proud U.S. citizen.

I got an education (California’s community colleges were free and the university’s fees were nominal) and started a family. With work and luck, I became a contributing taxpayer, and good things came my way. I even had the privilege to serve in three presidential administrations, including as Treasury secretary.

Things look very different for immigrants today.

America faces major geopolitical challenges, as always. But we are being pulled apart domestically by incessant turbulence. Our major institutions are under attack, immigrants and ethnic minorities are demonized, and there has been an uptick in political violence. Congress has gone AWOL, public trust is near historic lows and, increasingly, voters listen to demagogues and conspiracy theorists.

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These are fraught times for our cherished democracy. The White House attempts to govern by executive fiat as a polarized Congress fails to supply checks and balances, creating a dangerous situation. Some people fear more of the same over the next three years and beyond. Citing Europe in the 1930s, they think we will lose our democratic freedoms.

I have reached a different conclusion. Perhaps it is my long life, beginning in Europe, that helps me recognize the similarities but also the differences. Some of what’s happened has a familiar ring—raucous rallies, nationalistic rhetoric of grievance, ignoring legal constraints, attacks on minorities, judges, media and cultural institutions, threats against political opponents, flexibility with the truth, and extravagant promises mostly unmet. Not least are the opportunists and enablers who scramble for power and profit while those who know better let it happen by not fighting back.

But the U.S. today isn’t Europe 100 years ago. I have faith in our democratic institutions and the common sense of the American voter.

Americans aren’t ideologues, they are pragmatists. Politically they cluster around the middle and dislike extremism and overreach. They dislike the rhetoric of violence, the military on their streets, and the arrests of working people in stores, churches and schools. Nor are they on principle opposed to immigrants.

First and foremost, they expect elected officials to address urgent problems like rising prices and runaway healthcare costs, the lack of affordable housing, poverty and need. When politicians fail to deliver, the people make their views known at the ballot box, as happened recently in Virginia, New Jersey and elsewhere. With midterm elections coming this year, Congress is beginning to listen. Gradually and gingerly, party lines are being crossed in the House and Senate.

Tarnell Brown writes with insight about “the deportation labor shock.” Here’s his conclusion:

Mass deportation does not elevate American workers. It impoverishes them—quietly, broadly, and predictably. An economy grounded in voluntary exchange and secure property rights requires labor mobility, not forced scarcity. If the objective is abundance—more homes, lower prices, and rising real wages—the evidence points decisively away from deportation and toward legal, market‑driven labor flows.

The Editorial Board of the Wall Street Journal reports that “Stephen Miller’s mass deportation strategy is backfiring at the polls.” Two slices:

How does a Republican lose by 14 points in a safe conservative Texas state Senate seat that President Trump carried by 17 points in 2024? Answer: When there’s a voter backlash against the Trump Administration, notably its mass deportation debacles.

That’s what happened Saturday in a special election to fill a GOP seat in Tarrant County in the Fort Worth area. Democrat Taylor Rehmet, a labor union leader and veteran, romped over Republican Leigh Wambsganss, who had a Truth Social endorsement from Mr. Trump and vastly outspent Mr. Rehmet.

The election timing was awful for Republicans in the wake of the two killings by immigration agents in Minneapolis. Ms. Wambsganss has been a leader in the parental-rights movement in school boards and wasn’t a bad candidate. But state politics is often national these days, and the 31-point vote swing in a little more than 14 months can only be explained as part of a rising tide of opposition to Mr. Trump’s first year and a sour public mood.

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Mr. Miller ordered the immigration bureaucracy to fill a quota of 3,000 migrant arrests a day. This was bound to result in agent intrusions into homes and businesses, since there aren’t that many criminal migrants to fill such a quota each day.

Immigration has overall been a winning issue for Republicans, but it works better as a reaction to Democratic border enforcement failures. Mr. Trump has already largely closed the border. But immigration enforcement that turns ugly in the streets is turning off the swing voters who will determine who wins the race for Congress this year.

Jason Willick ponders the unexpected tardiness of the U.S. Supreme Court’s ruling in the case challenging Trump’s tariffs punitive and arbitrary taxes on Americans’ purchases of imports. Here’s his conclusion:

It’s always perilous to make predictions about a case based on the deciders’ timeline, but some are possible. Criminal defense lawyers tend to be happy when the jury is out for a long time without convicting their client. And the longer a status quo stays in place, all else being equal, the less likely the Supreme Court is to disturb it. In a recent case on National Guard deployments, the Supreme Court sat on Trump’s appeal for a curiously long time before affirming the status quo — no National Guard in Chicago — that the lower courts had established.

Eric Boehm isn’t buying Trump’s claim that inflation is no more.

Joseph Epstein isn’t a fan of the current White House press secretary – or, indeed, of press secretaries in general. A slice:

If the press formerly accosted White House press secretaries, in recent days this has reversed, with the press secretary now on the attack. An all-too-vivid example of this occurred this month, when 28-year-old Karoline Leavitt attacked Niall Stanage, a White House columnist for the Hill, after he revealed that he thought that the Immigration and Customs Enforcement agent who shot Renee Good acted recklessly and unjustifiably.

Ms. Leavitt unloaded: “You’re a left-wing hack. You’re not a reporter. You’re posing in this room as a journalist. . . . And shame on people like you in the media who have a crooked view and have a biased view, and pretend like you’re a real honest journalist.”

She has taken the job to new heights (or is it new depths?). Ms. Leavitt seems more certain than President Trump of the efficacy of President Trump’s policies. She is also often more mean-spirited than he and is without his sense of humor. What was once a job that called for a voice of seemingly poised neutrality has, under Ms. Leavitt, become one of sullen partisanship. Hers is henchman-like behavior.

The natural intelligence that is Arnold Kling reflects on artificial intelligence and “average is over.”

Matt Yglesias tweets: (HT Scott Lincicome)

Part of the affordability crisis is pretty clearly people just refusing to be thrifty — you should not be spending a quarter of your salary on DoorDash.

And this from Mike Bird:

People get angry at this point but aggregate American spending on eating/drinking out or having that food delivered is at a record high, and the proportion spent on store-bought food is at a joint-record low with the peak housing bubble era.

Richard Brookhiser tells what he learned from America’s founders. A slice:

Yet when we look past the tumult and the shouting, we find that Jefferson deeply believed two things. First, that people have rights. They have them not because Jefferson, or the Continental Congress, said so, but because of what people are. This is why Jefferson, philosophic Unitarian though he was, called rights the endowment of a Creator. This is why he recognized them, even through the gritted teeth of habit and personal dependence, in the people he owned.

The second thing Jefferson deeply believed was that the people would most often be right. He believed this in part as a Virginia gentleman playing at being a yeoman; in part because of the moral philosophy of his day. For Jefferson, the five senses on which empiricist thinkers of the previous generation had lavished so much attention were supplemented by a sixth, a moral sense, which all men had. “The moral sense,” he wrote one of his nephews in 1787, “is as much a part of man as his leg or arm.” He went on: “State a moral case to a ploughman and a professor. The former will decide it as well, and often better than the latter, because he has not been led astray by artificial rules.”

Jefferson’s two convictions don’t obviously agree. You could believe in rights yet fear people as a potential mob; alternatively, you could support popular rule even when it tramples on rights. Jefferson the politician experienced periods when the American people, ploughmen included, were led astray by panics and lies (he memorably called one such phase, during the administration of his sometime friend John Adams, the “reign of witches”). Yet, over the long haul, he believed in both rights and the people. Among those rights was self-rule. And the people, Jefferson believed, mostly exercised it wisely. We might carp at his analyses of specific political moments, or fuss over his intellectual justifications. But if either of his convictions is wrong, then America is wrong.

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… is from page 432 of Johan Norberg’s excellent 2025 book, Peak Human: What We Can Learn from the Rise and Fall of Golden Ages:

International trade, especially, tends to expose cultures to new ways of doing things and breaks down the perception that only one way is possible, even in non-economic areas like politics, art and religion.

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C. Jarrett Dieterle reports that “Trump’s tariff war is crushing American alcohol makers.” A slice:

Despite the crippling pain being borne by the industry, Trump has shown few signs of reconsidering. In response to news that French President Emmanuel Macron would not join Trump’s newly minted “Board of Peace” to resolve the ongoing Gaza conflict, Trump told reporters: “I’ll put a 200 percent tariff on his wines and Champagnes, and he’ll join, but he doesn’t have to join.”

In response to arch-protectionist Peter Navarro’s recent boast that “American steel production just surpassed Japan for the first time since 1999,” Eric Boehm tweets this apt image: (HT Scott Lincicome) (And Eric’s point is valid.)

The Wall Street Journal‘s Editorial Board urges states to expand education savings accounts in order to increase parents’ ability to rescue their children from the K-12 ‘education’ system run by governments. A slice:

The best case for school choice is that parents are free to take it or leave it—and they’re taking it in droves. Some 1.5 million students are using private choice programs in the 2025-26 school year, up from 1.2 million last year, according to the nonprofit EdChoice. But not all parents who want private options can get them, and state lawmakers can still do more to help.

The great news is that some 19 states now have universal choice programs, meaning any student is eligible. Iowa this school year opened K-12 education savings accounts (ESAs) to all, and 41,044 students are using them, about 13,000 more than last year. So did Arkansas, which awarded more than 46,000 ESAs this fall, up from about 14,000 last year.

New Hampshire’s ESA enrollment jumped to 10,000 students this year from 5,800 with the removal of an income eligibility cap. In Arizona, where ESAs have been available to all students since 2022, more than 100,000 are using them, up from 85,000 last spring.

Jack Nicastro documents the efforts of Virginia’s Democrats to restrict Virginians’ freedoms.

GMU Econ alum Matthew Mitchell and Vance Ginn ask: “How does your state rank on this Economic Freedom Index?”

David Henderson applauds “the wealth of individualism.” Two slices:

While it is true that the economy runs on self-interest, the dog-eat-dog metaphor is inaccurate. In a free market, we get what we want precisely because people are self-interested. Moreover, there’s a wider view of individualism that includes helping others out of generosity and fellow feeling.

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One of the great things about individualism is that we get to decide how and in what ways we serve our fellow humans. Some of us might focus almost entirely on building a business. And in a free market, the surest way to build a business is not to cheat customers but to provide something they are willing to pay for and don’t, after the fact, regret having bought. We often hear the famous P.T. Barnum quote that apparently drove his circus business: “There’s a sucker born every minute.” The problem is that he didn’t say that. Indeed, as Charles L. Hooper and I point out in our book, Making Great Decisions in Business and Life, Barnum made a statement that contradicts the “sucker” quote. He stated that “no man can be dishonest without soon being found out and when his lack of principle is discovered, nearly every avenue to success is closed against him forever.”

A simple example of a good exchange is the sale to me, in 2015, of a new Toyota Camry. I still drive it and love it. The executives at Toyota don’t know me and, if they met me, might not even like me, hard as that is to believe. But in producing that car and selling it to me, they cared about me.

George Will ponders the U.S. Supreme Court’s upcoming ruling on the power of the president of the executive branch  of the U.S. government to remove executive-branch agencies’ principal officers. A slice:

The unitary executive theory charges that “independent” agencies are insulated from accountability. But voters can hold both Congress and the president accountable for the administrative state’s behavior. And [UVA Law professor Caleb] Nelson, a self-described constitutional “originalist,” adds:

“If most of what the federal government currently does on a daily basis is ‘executive,’ and if the President must have full control over each and every exercise of ‘executive’ power by the federal government (including an unlimitable ability to remove all or almost all executive officers for reasons good or bad), then the President has an enormous amount of power — more power, I think, than any sensible person should want anyone to have.”

If the court gives its imprimatur to a strong version of the unitary executive theory, presidential power will become even more formidable and less circumscribable than current events reveal it to be. This is a recipe for enhanced presidentialism — more government by executive fiats, more president-centric politics, more congressional anemia.

As Nelson says, the Constitution’s provisions concerning presidential power “are far more equivocal than the current Court has been suggesting … I hope the Justices will not act as if their hands are tied and they cannot consider any consequences of the interpretations that they choose.”

Yes. When considering the logic of our constitutional structure, the justices should not disregard their conclusions’ likely consequences for the nation’s political practices and civic culture. Quoting a member of Congress in 1789, the year the Constitution was adopted, Nelson warns against “interpretations of the Constitution that ‘legaliz[e] the full exertion of a tyrannical disposition.’”

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… is from Robert Higgs’s September 10th, 2009, essay titled “The Rise of Big Business and the Growth of Government“:

Because ideology and political movements develop reciprocally, the pervasive reactions to the rise of big business around the turn of the twentieth century gave rise not simply to a proliferation of newly organized interest groups seeking government protection of threatened positions; it also prompted intellectuals, both independents and “hired guns,” to develop new rationales for more active government. Thus Progressivism as ideology developed concurrently with Progressivism as politico-economic practice, each aspect reflecting the changing socioeconomic opportunities and hazards created by the rise of big business and its repercussions throughout the economy.

DBx: The great economic historian, and my dear friend, Bob Higgs today celebrates – in his adopted home of Lafayette, Louisiana, with his lovely wife, Elizabeth – his 82nd birthday. For his sake and ours, may he have many, many more.

Happy Birthday, Bob!

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GMU Econ alum Julia Cartwright, writing in the Washington Post, argues – in the best Masonomics tradition – that the Federal Reserve’s discretion should be restricted with a monetary constitution. Two slices:

The Justice Department this month threatened criminal prosecution of a sitting Fed chair over construction budgets. Political pressure on the central bank is not new. One need only read the memoirs of Ben Bernanke or Paul Volcker to see how presidents have pressed Fed chairs behind closed doors. What is unprecedented, however, is how private interference has given way to overt, escalating political and legal theater, producing widespread economic anxiety.

Institutional stress has a way of transforming theory into necessity. A monetary constitution could take the form of a constitutional amendment that replaces the Fed’s discretionary rate setting with explicit constraints. For example, the amendment could require the Fed to follow a clearly defined inflation benchmark and permit interest rate changes only when the economy deviates from those targets. Binding the Fed’s discretion in this way would insulate monetary policy from political influence, addressing today’s economic anxieties and tomorrow’s vulnerabilities. We need monetary policy by principle, not by spectacle.

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The principle of a monetary constitution is straightforward: limit the scope for politically motivated interference. Such a framework could impose rules on money supply growth, requiring it to track the broader economy’s expansion. This would limit the kind of discretionary policy that allowed the Fed to expand the U.S. money supply by more than 20 percent in 2020, a move Warsh has criticized and a surge that greatly contributed to the inflation that followed.

Mandating regular audits of the Fed would enhance transparency, a requirement imposed on every major bank in America but curiously applied far more narrowly to the central bank. A monetary constitution could even allow or encourage private currency competition, including crypto, as an external check on official money. There are two potential paths for how such a monetary policy might be enacted. The first is a constitutional amendment proposed by Congress, which must clear Article V’s deliberately high hurdles. The second route is overhauling the Federal Reserve Act. Because the Fed exists by statute, Congress could rewrite that law to impose a narrow mandate or even phase out the current framework that allows for incredible discretion. This would admittedly be less durable than an amendment but far more feasible politically.

Either approach would deliver much the same result: monetary stability no longer tied to the preferences or fortitude of individual central bankers.

Scott Lincicome documents the capital-market distortions unleashed by what Lincicome calls Trump’s “state corporatism.” Two slices:

In my latest Bloomberg column, I explore an unseen cost of the federal government’s recent and unprecedented investments in private US companies: the distortion of capital markets that have underpinned American growth and innovation for decades. As I explain, Uncle Sam’s 10 percent equity stake in chipmaker Intel has caused its share price to spike, even though the long-troubled company is facing the same operational and strategic challenges that have dogged it for years. The government’s investment has thus likely “diverted tens of billions of dollars of private capital away from potentially more deserving firms and to Intel, with little support for the move beyond—as one semiconductor analyst put it—‘vibes and tweets.’”

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As I document, research shows that policy-driven capital misallocation can lead to lower productivity, weaker growth, and a smaller economy over the long term, even if state-backed champions don’t fail outright.

Such distortions have cost China hundreds of billions of dollars in foregone economic output (GDP). The United States would be wise not to follow Beijing’s lead.

Here’s economist Timothy Taylor on economists and Trump’s tariffs punitive taxes on Americans’ purchases of imports. Two slices:

Imports are about 14% of the US economy. Say that the tariffs, with all exceptions and delays factored in, are imposed at an average rate across all imports of about 10%. If 14% of the economy has a 10% increase in tariffs, then the pass-through to consumer prices would be 1.4%. The evidence suggests that’s roughly what’s happening.

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The Yale Budget Lab calculates that the additional cost of the tariff so far work out to about $1400 per year for the median household. However, if the cost of the tariffs is expressed as a percent of income, rather than dollar amount, the negative effect is biggest for those with the lowest income levels, because they rely more heavily on less-expensive imported products.

The Wall Street Journal reports on the long-run damage that Trump is likely doing to the reputation of the United States. Two slices:

The image of America also recovers because its fundamentals and soft power remain strong: people still want to go to its universities, watch its movies and admire its economy, says Mitchell Reiss, a longtime U.S. diplomat who is now at the Royal United Services Institute think tank in London.

“A lot of damage is being done by Trump,” he says. “But we are also the most resilient country in the world.”

Others think it could be different this time around. Two things have changed. First, past presidents viewed the international order—the multilateral institutions and web of security and economic alliances set up by Washington—as an asset worth defending. George W. Bush ordered the invasion of Iraq after trying, and failing, to get U.N. backing, but still had a coalition of some 49 countries offering to help.

Trump is unapologetic about pursuing U.S. interests narrowly. He tends to see allies as grasping dependents rather than force multipliers. Gone is talk of promoting Western values like democracy and open markets.

Trump has broken a system of trust between the U.S. and its allies that created a relatively benign global order for the past 70 years, says Robert Kagan, a former member of Republican administrations and fellow at Brookings Institution think tank.

During that time, Kagan argues, American power helped protect allies. In exchange, they hosted American bases, shared intelligence and kept relatively open markets for U.S. firms. Together, the U.S. and its allies faced down challengers, like Russia and China, to this stable order.

Now, Kagan said, allies are unlikely to trust America as much again, regardless of a change in administration. “I think it’s virtually inconceivable to imagine recovery at this point. Let’s imagine three more years of this,” he said. “So he backed off a bit on Greenland. This isn’t the end of the problem, this is still the beginning.”

Another reason anti-Americanism might be stronger this time around is basic pride. Past presidents generally tried to not mock other leaders and nations.

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Local manufacturers who for decades sought American buyers are instead diversifying their client rosters. Paul Norriss, who runs a clothing factory in Vietnam with a largely American buyer network, said he has added non-American retailers to reduce his exposure to volatile trade policies.

The damage hurts in other ways. The number of tourists to the U.S. fell by 6% last year, led by a decline in visiting Canadians and Mexicans. After Trump slapped tariffs on Canada, grocers like Loblaws and Sobeys tagged products sourced locally. A popular new app, Maple Scan, lets users try to skirt tariffs and support Canadian companies by identifying local products.

“The U.S., we’ve been neighbors for years, and we’ve fought in wars together. But ultimately, things have become very unpredictable,” said Sasha Ivanov, a Canadian programmer from Calgary who developed the app.

Steven Greenhut is correct: “Free nations don’t have to care about the whims of elected officials.” Two slices:

The freer the nation, the less the public needs to care about anything that its leader might say or do. In freer nations, the leader’s powers are strictly limited, and the citizens’ rights are protected. Yet in America today, we are dependent on every whim, utterance and narcissistic rage post from our president, as he pursues policies that could disrupt our lives. In that way, we’re more like North Korea than our founders’ America.

This has always been true to a degree, but since Donald Trump took office last year, Americans have been experiencing a severe form of political whiplash. Firmly in control of the nation’s massive federal apparatus, MAGA and its Republican lickspittles in Congress have thrived on chaos. Every day, the president issues some new threat. He imposes new tariffs on countries that don’t kiss the ring, then backs off, then imposes even harsher ones.

After getting his feelings hurt for not receiving a peace prize that he believes he deserves, Trump threatened to invade a territory controlled by an ally.

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I’ve often criticized Trump-era Republicans for tossing aside their freedom birthright in favor of the stale porridge of authoritarianism. My vain hope today is to convince my newfound anti-Trump allies (who have disliked my years of writing against progressive policies) to view the current national nightmare as a teachable moment.

Both political sides assume they will always control the levers of power. But they forget this important axiom: Don’t ever support a new power that you wouldn’t want in the hands of your worst enemy. Maybe it’s time for Trump’s foes to recognize the importance of limiting executive power, so that no one can abuse it this way in the future.

Judge Glock decries the waste of government-imposed efforts to convert wind power into electricity – an effort that will be especially costly to him, me, and our fellow Virginians. A slice:

A federal judge ruled recently that the Coastal Virginia Offshore Wind project could continue despite the Trump administration’s efforts to pause it on national-security grounds. Supporters of the project argue that the administration’s effort is hypocritical given its “all of the above” energy strategy.

Although the administration’s claims about national security may be a fig leaf, President Trump is right that offshore wind is a bad way to get energy. The CVOW will be one of the most expensive energy projects in U.S. history, and it will burden Virginia’s consumers for decades. Gov. Abigail Spanberger and others claiming the project will foster “affordability” are wrong.

Ilya Somin, a GMU colleague over in the Scalia School of Law, tells us of “Minnesota’s compelling 10th Amendment case against Trump’s ICE surge.” A slice:

Control over state and local government personnel is one of the powers reserved to the states by the 10th Amendment. In addition, as legal scholar Michael Rappaport has shown, the original meaning of the Constitution indicates that such control is a basic element of the sovereignty inherent in being a state in the first place.

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… is from page 580 of the 1988 collection of Lord Acton’s writings and notes to himself (edited by the late J. Rufus Fears), Essays in Religion, Politics, and Morality; specifically, it’s a note drawn from Acton’s extensive papers at Cambridge University:

Every doctrine to become popular, must be made superficial, exaggerated, untrue. We must always distinguish the real essence from the conveyance, especially in political economy.