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George Will makes a strong case that the Fourth amendment protects against warrantless searches of people’s smartphones. A slice:

In the simmering American crisis before 1776, Britain’s colonial governments relied on informers to help them enforce provocative laws restricting the colonists’ economic rights. Those governments also used “writs of assistance,” which empowered customs officials to search buildings for smuggled goods. These search warrants were not limited to particular times and places, and could be issued without any specified suspicion of illegal activity.

In 1791, lingering resentment of writs of assistance resulted in the Bill of Rights, including the Fourth Amendment. It guarantees a right “of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.”

So, why do the tens of millions of smartphone-carrying travelers who enter the United States each year not have a reasonable expectation of privacy regarding their phones? What reasonable reading of the text and history of the Fourth Amendment exempts border agents from its strictures? What permits them to examine travelers’ contact lists, call histories, messages, voicemails, emails and photographs?

Also writing about unlawful ‘law enforcement’ is Autumn Billings.

The Wall Street Journal‘s Matthew Hennessey is right that ordinary Americans are much more prosperous than they – and many non-Americans – realize. A slice:

The Brits themselves don’t seem to see it. When asked to imagine how they’d fit into the 50-state U.S. economic hierarchy, they rank themselves in the top 10. That is so far off the mark as to qualify as delusional. The U.S. contains within itself more than four dozen economic statelets that are more productive per-capita than the place that once produced Rolls-Royce, the Beatles, Harry Potter and my No. 1 guy, Daniel Day-Lewis.

Mississippi drinks their milkshake.

Over the summer, Americans got a huge kick out of the European soccer fans who expressed amazement at the abundance they encountered while here for the World Cup. It wasn’t only our material wealth that dazzled, but our kindness and generosity. Somehow these visitors landed on our shores thinking the entire country was at daggers drawn over politics—that American society is a roiling mess of racial resentment and economic inequality.

Gee, I wonder where they got that impression?

Americans are also susceptible to misimpressions. Many Americans have convinced themselves they are living in a stagnant, unjust hellhole. They have trouble accepting what visiting Europeans can clearly see. Americans have more, give more, can do more, and live better than anyone in history.

You should stop complaining and thank your lucky stars you were born in the U.S. of A. Things could be so much worse.

The Editorial Board of the Washington Post continues to decry Trump’s tariffs punitive taxes on Americans’ purchases of imports. A slice:

One of the latest victims of U.S. tariffs is a third-generation family business in New Jersey. The Gellert Global Group imports Canadian cheeses, and the food supplier says it’s facing $40 million in additional annual costs after President Donald Trump slapped a 50 percent import tax on dairy products this summer as part of his feud with Canadian Prime Minister Mark Carney.

The company’s lawsuit this week challenging the legal basis for the tariffs tees up another showdown over free trade. In February, the Supreme Court decided 6-3 that Trump lacked authority under a 1977 emergency powers law to impose his “Liberation Day” tariffs. Almost immediately, Trump imposed similar duties under Section 122 of the 1974 Trade Act. The U.S. Court of International Trade struck those down.

After that, administration officials apparently dug through dusty filing cabinets in search of new justifications. In July, Trump invoked a 96-year-old provision buried inside one of the more atrocious pieces of legislation in American history: the Smoot-Hawley Tariff Act. That 1930 law deepened the Great Depression and has become synonymous with the folly of protectionism. Raising tariffs to help domestic producers prompted other countries to retaliate, causing a collapse in U.S. exports.

The laws of economics are unchanged. A tariff is a tax on importing something, and American buyers pay it. Tariffs protect politically favored producers by forcing everyone else to pay more: manufacturers buying inputs, retailers stocking shelves and families shopping for groceries.

GMU Econ alum Dave Hebert corrects Oren Cass. A slice:

So what have been the accomplishments over the past two years in the steel industry? For starters, the producer price index for steel mill products has jumped 48.6 percent since Trump took office. Cleveland-Cliffs’ latest quarterly results show improved profitability and higher shipments. Those are meaningful improvements for the company, but they are hardly surprising. When steel buyers have fewer options, the remaining sellers get more orders and can charge higher prices.

Still, higher profits for a protected producer receiving a $500 million subsidy are woefully insufficient evidence that the country is better off as a whole. For that, we need to look at people in downstream industries who are buying the now more expensive steel.

The domestic auto industry was positioned as a showcase for tariffs. As users of steel, particularly the steel products made in Middletown, their experiences matter for an overall assessment. The results have not been good. Nationally, motor vehicles and parts employment has fallen by about 13,000 jobs since Trump took office. In Michigan, a key state in the upcoming midterms the president has repeatedly promised his tariffs would help, has shed 2,600 jobs over the year ending in August. Automation, vehicle demand, canceled EV programs, and model turnover all play a role in this. Still, higher prices for steel products and longer lead times clearly cannot be helping the situation.

Meanwhile, politics worked exactly the way we would expect it to. Ohio’s congressional delegation wrote a letter to the Department of Energy urging them to keep the award alive. Vice President JD Vance, himself a Middletown native, announced the deal in his hometown. A small, well-organized group got a $500 million subsidy while the costs have been spread across taxpayers and steel buyers.

Tad DeHaven keeps us updated on the rising number of private companies in which the U.S. government now holds equity stakes.

Jane Shaw Stroup tells the sorry tale of how special-interest politics is harming U.S. agriculture and conservation. A slice:

The idea of marrying government-paid conservation with government reduction of farmland started as something of a subterfuge. In 1933, as part of the Roosevelt administration’s effort to prop up falling crop prices, Congress enacted the Agricultural Adjustment Act (AAA). This was the infamous law that led to killing over six million piglets and sows, causing public outrage.

The AAA raised prices. But three years later, the Supreme Court struck down the Agricultural Adjustment Act, finding that its tax-and-subsidy scheme improperly allowed the federal government into agricultural regulation reserved to the states by the Tenth Amendment. (That decision has never been formally overturned, but its restrictions on the role of the government have disappeared.)

Just two months later, the FDR administration came up with another law, the Soil Conservation and Domestic Allotment Act (SCDAA), building on the recently created Soil Conservation Service (now called the Natural Resources Conservation Service). The new law justified controls on crop production to protect the soil and to curb erosion. “The goal was still to raise prices by reducing surplus crops,” explains historian Chandler Hansen, “but now it had the added benefit of implementing conservation practices to improve the health of the land.”

So, the USDA’s early conservation efforts were primarily to get around a stubborn Supreme Court. To be sure, the Depression and the Dust Bowl were wreaking havoc in farm country. But the acceptability of  conservation provided cover for the farmers’ more pressing issue of holding up prices. According to Erik Lichtenberg of the American Enterprise Institute, the CRP is still an “afterthought.” Commenting on the CRP and a smaller conservation program (called EQIP), he recently wrote: “But they serve that function [environmental protection] only to the extent that it coincides with their main goals of protecting agriculture’s natural resource base and supplementing farmers’ incomes.”

Available for free is Jason Furman’s Econvitals.org.

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… is from page 29 of Thomas Sowell’s February 7th, 2000, column titled “Perennial Economic Fallacies,” as this column is reprinted in Sowell’s 2002 collection, Controversial Essays:

Despite desperate efforts of activists to keep “hunger in America” alive as an issue by manipulating numbers, actual examinations of flesh and blood people show no nutritional differences between people in different income brackets. In contrast to the gaunt and undernourished poor of other times and places, Americans in the lower income brackets today are slightly more likely to be overweight than is the rest of the population.

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Here’s a letter to a Substack commenter.

Mr. Calamitous:

You’re unhappy with economists’ defense of so-called “price-gouging,” which is the practice of charging (and paying!) unusually high prices in the aftermath of natural disasters and wars. Specifically, you write:

Your example with overcharging for, say, water when there’s been an earthquake is not good for people, it’s cruel. There are times when charity and public service are the proper response, not markets. Markets are a tool we can use in some situations, not a magic wand. The lack of awareness of this is what makes libertarians seem aloof and a little ridiculous.

With respect, I disagree.

First of all, these high prices are not “overcharging.” They reflect the underlying material reality that supplies have suddenly been much-reduced while, simultaneously, demands have suddenly been much-increased. The substantial reduction in supply relative to demand is a reality that raises the market value of each unit of the good that is available. This market value is what it is; a government prohibition of “price gouging” prevents the market from accurately reporting to the world this economic truth. Outlawing “price gouging” is akin to outlawing meteorologists from accurately reporting on the formation and path of hurricanes.

Floridians and Louisianans might for the moment feel better being told that skies will be sunny and winds calm, but because such misinformation prevents them from taking appropriate measures, they’ll regret the lies fed to them when the storms strike.

And so it is with high prices. Prices kept artificially low ‘lie’ to consumers and to suppliers. Buyers fortunate to be near available supplies (or who have family or political connections with suppliers) will over-consume. Worse, suppliers will get neither the information nor incentive necessary to encourage them to take extra steps to bring more supplies into the devastated areas.

You write that such problems should instead be handled by “charity and public services.” Maybe. But the very fact that prices rise to levels that you find objectionable implies that charity and public services aren’t doing the job.

I’ve a question for you. Do you, whenever a natural disaster strikes somewhere in the continental U.S., always take several days off of your job, rent a flat-bed truck, fill it with the likes of propane, bottled water, plywood, and blankets, and then drive that truck to disaster areas and either donate these supplies or sell them at the prices you paid for them?

I’m guessing not.

Now, suppose someone offered to pay you, each time a natural disaster strikes, $5 million to take five days off of work in order for you to rush needed supplies to disaster areas. Would you take this job offer? I’m guessing so – which means that you, sir, are a price gouger. The only difference between you and the “price gougers” who you criticize is that the prices they charge to help relieve the suffering of disaster victims are lower than the prices you charge.

Now I don’t hold against you your inaction induced by the failure of buyers to meet the exorbitant prices you charge. Most people – including me – don’t do much to help rush supplies to disaster victims. But you should stop criticizing the actions of those suppliers who you and others unjustly tar as “price gougers.”

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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My intrepid Mercatus Center colleague, Veronique de Rugy, warns Californians to reject Gabriel Zucman’s – and other ‘progressives” – demand for a wealth tax. A slice:

I’ve written plenty about why wealth taxes are economically destructive, administratively nightmarish, and unlikely to achieve anything close to what their advocates promise. But Zucman’s prescription is wrong for a more fundamental reason, as his (and my) native country shows: Raising taxes to fuel ever-larger demands for government spending is a recipe for disaster.

National Review‘s Andrew Stuttaford rightly describes the wealth tax endorsed by Gabriel Zucman as “morally reprehensible” and “economically destructive.” A slice:

Unsurprisingly, Zucman is unhappy about an analysis of the tax’s likely effect by Hoover Institution economists Joshua Rauh and Benjamin Jaros. Proposition 40’s proponents claim that the tax will raise $100 billion. Rauh and Jaros argue that, far from raising that sum, such a tax would end up costing the state tens of billions of dollars. To put it simply (and before considering other negative consequences), that is because the tax would drive billionaires (and the taxes they pay) out of the state. According to the Wall Street Journal, it is already doing so:

Seven billionaires with $539.9 billion in wealth moved out of California between the initiative’s filing last autumn and the date at which residency would be determined for purposes of assessing the tax (Jan. 1, 2026), according to public reports. That means nearly 30% of Prop. 40’s estimated $1.9 trillion potential tax base has already disappeared.

This has not stopped Zucman from claiming that California’s billionaires will stay put. Included in a series of tweets he has written attacking the Hoover duo’s paper was this:

Why would billionaires permanently leave California in response to a one-time tax owed if they lived there on January 1, 2026? It would only make sense for them to leave if the tax becomes annual.

That’s (a bit) like saying that people who have already been burgled have no reason to lock the door to their homes.

Here are Arnold Kling’s thoughts on today’s rioting in France.

Also writing wisely about the rioting in France – and the cluelessness of some alleged “economists,” notably Thomas Piketty about this rioting – is Jonah Goldberg. A slice:

The most obvious answer to France’s problems is economic growth — much easier said than done, of course. The reason that’s so hard for France isn’t because the government is “unresponsive” to the people and their concerns, it’s because it’s too responsive. For decades, the French have demanded the economic policies that got them into this mess, and the government appeased them.

GMU alums Phil Magness and Dave Hebert expose the weakness of arguments for industrial policy.

This extended period of protectionist infancy suggests that the argument needs a new name. We propose the “Peter Pan industry argument” for companies that never grow up because tariffs make sure they never have to.

The question tariff advocates rarely ask is: Why do some American producers have higher costs than foreign rivals even in the face of lower-cost foreign competition? The answer comes down to specific rules and choices within particular firms and industries. Tariffs, and protectionism in general, address none of these. No industry illustrates this like steel, but it is far from the only one.

Scott Lincicome, sharing news from to an Axios report, tweets:

toldja: “the [manufacturing] recovery is being powered by industries at the forefront of the AI and energy boom while the traditional factory sector gets left behind”

The growing mfg industries are ALSO among the least tariff-protected.

The Washington Post‘s Editorial Board makes the case for letting “private capital determine how many data centers America needs.” A slice:

But the political movement to slow down or block the growth of data centers could have adverse consequences for the entire economy. By some estimates, AI-related goods accounted for as much as three-quarters of all global trade growth in the first quarter of 2026 and upward of a third of U.S. economic growth.

Financial risk does not diminish the structural utility of technological advances. Many railroads failed, but the track remained. Ditto for companies in the 1990s that laid fiber-optic cable, which continues to generate value.

If CoreWeave has borrowed too much, creditors and shareholders will bear the consequences. If Microsoft or Meta wants another gigawatt of electricity, they should pay the cost of producing and transmitting it. But neither investors nor consumers benefit when zoning boards, permitting regimes and utility bottlenecks prevent otherwise economically viable projects from being built.

David Henderson recounts a tale told by his late professor, George Hilton.

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… is from page 129 of my late, great teacher Fritz Machlup’s May 1960 Review of Economics and Statistics paper, “Another View of Cost-Push and Demand-Pull Inflation“:

It is clear that an inflation of effective demand is a necessary condition not only for a demand-pull inflation of consumer prices but also for a cost-push inflation. Without an expansion of demand the cost boost would result in less production and less employment, not in a continuing rise of the level of consumer prices.

DBx: Yes.

There are several reliable litmus tests for revealing people who, despite pronouncing on economics, do not understand the first thing about how economies actually work. One of these tests is centered on the concept of “cost-push inflation” – which is the belief that inflation can be, and sometimes is, caused by “greed” or by market power. Anyone who ‘explains’ inflation in this way is a poor economist.

…..

Pictured here is Fritz Machlup (1902-1983).

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I just discovered this insightful piece, from August 2025, by National Review‘s John Puri – a piece in which Mr. Puri identifies a deep contradiction in the positions taken by NatCons and other ‘postliberals’ on trade and foreign policy. Two slices:

It has always struck me as odd that the most thoughtful advocates of protectionism within the conservative movement also tend to be the fiercest advocates of non-interventionism. Patrick Buchanan famously embodied this synthesis for a while, and much of the New Right embodies it today, but the pairing of these ideas dates back to pre-Cold War conservatives like Robert Taft and the America Firsters.

On the face of it, protectionism and non-interventionism share a common foundational belief: America should have less to do with the world that surrounds it. But there is an inherent tension between the two.

The most intelligent protectionists do not see trade as inherently bad. Instead, they argue that the impersonal market forces that drive international trade patterns lack any regard for geopolitics. A policy of targeted protectionism via tariffs and other import restrictions, proponents argue, is needed to make the international distribution of trade and production better fit with America’s strategic interests. Critical industries can be brought home or shifted to allied nations, rather than left in the hands of adversaries. Bilateral economic relationships can be favorably rebalanced. Blocs can be formed to isolate bad actors. In short, the United States can utilize tariffs to make a dangerous world more hospitable.

This confidence in America’s ability to unilaterally rearrange the global economic order to its benefit is strange, then, coming from people who have no confidence in America’s ability to unilaterally rearrange the global security order to its benefit. Which is what foreign interventionism aims to do, relying upon a similarly blunt tool — military force — as protectionists have in tariffs.

Muscular interventionism, even when practiced by self-described conservatives, is born of a progressive ambition to remake the world. Woodrow Wilson believed that America could make the world “safe for democracy” by becoming its moral guide, turning autocratic countries into democratic ones. In the 21st century, interventionists have sought to reform the Middle East from the bottom up. It was not enough for the United States to contain, deter, and defeat its immediate enemies. “For as long as whole regions of the world simmer in resentment and tyranny,” George W. Bush proclaimed in his second inaugural address, “violence will gather, and multiply in destructive power, and cross the most defended borders, and raise a mortal threat.” Therefore, to guard itself truly, America would have to “seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world.”

The non-interventionists told the interventionists then: You are not nearly adept enough to get this right. No one is. The world, made up of hundreds of nations — each with its own relationships, internal factions, political dynamics, and distinct characteristics — is far too complex to rearrange without mucking things up. Wilson’s comprehensive effort to make the world “safe for democracy” from his perch at Versailles failed in epic fashion. The arrogant map drawers were to be humbled by the vicious revisions of Hitler’s Germany, Mussolini’s Italy, and imperial Japan.

…..

The alternative to both protectionism and interventionism is an approach more in line with a conservative sensibility. It is to preserve the global security and economic orders that already exist, which, however imperfect, benefit America immensely. That means dealing with immediate threats to the security order as they materialize, such as fending off territorial aggression in Eastern Europe — or addressing acute economic vulnerabilities, as with rare earth minerals. It does not require a wholesale reconfiguration of the balance of power to preempt all conceivable hazards.

The post-WWII international orders are “rules-based,” in that they are undergirded by broadly applicable rules, not managed from above. Within those boundaries, innumerable diffuse decisions are made by countless sovereign actors.

This is how spontaneous order — or the “ordered liberty” that conservatives cherish — is achieved, and the free trading system that America helped build is a prime example. We should not try to fiddle with it, misguidedly assuming that we could arrange it better.

This letter in the Wall Street Journal by the Cato Institute’s Colin Grabow is great:

In her column “Alaska Considers Economic Suicide” (Potomac Watch, Oct. 16), Kimberley A. Strassel faults Democratic candidate Mary Peltola’s economic record but doesn’t discuss a policy position that disproportionately harms Alaska: Ms. Peltola’s support for the Jones Act. Addressing Alaska’s Legislature in February 2024, Ms. Peltola acknowledged that the law, which restricts domestic water transport to U.S.-built and flagged vessels, “creates extra challenges” for the state, yet said she backs it “because I support union workers.” Evidently, she weighs those union workers’ interests above Alaskans’ costs.

Unfortunately, Sen. Dan Sullivan, the alternative, is no better on this particular policy. In 2019 he joined five other senators at the White House to urge President Trump not to issue a Jones Act waiver for domestic liquefied natural gas shipments.

My intrepid Mercatus Center colleague, Veronique de Rugy, has some issues with United Airlines’s CEO Scott Kirby’s ignorant, arrogant pronouncements about economic policy. A slice:

Now United’s CEO, Scott Kirby, is in the news saying things I don’t like either. When the New York Times asked him this past weekend about the public’s falling trust in CEOs, he didn’t talk about running a better airline. He said instead that society is threatened by wealth inequality. He wants a national wealth tax, because a state version “won’t work” when “people will just move.” Because such soaking the rich apparently isn’t enough, Kirby also wants inheritance taxes “close to 100 percent at some level.”

In a recent post, [Gary] Leff gives some perspective on Kirby:

“I’ve compared Kirby to Captain Renault in Casablanca before. Under Biden, United leaned into diversity programs and pronouns, climate commitments, affirmative action and vaccine mandates. Under Trump, Kirby became a defender of the President’s tariff strategy and intentions. Now, speaking to the Times, he’s offering wealth redistribution. As Renault offered to Germany’s Major Strasser, ‘I have no conviction, if that’s what you mean. I blow with the wind, and the prevailing wind happens to be from Vichy.’”

Over at Fiscal Reality Check, Stanford’s Joshua Rauh offers several theories he had heard for why a man who sells a product built on charging more for a better seat would say such things. The one that stuck out to me is that Kirby may be pandering to the kind of government he expects to fund United’s next bailout. Once your business model includes a government rescue, keeping the rescuers happy becomes part of your job.

Also critical of Scott Kirby’s proclamations about matters other than those having to do with running an airline is the Editorial Board of the Wall Street Journal. A slice:

Mr. Kirby defended his company’s use of price differentiation in an interview this week with the New York Times. “The way to give everyone what they want is to charge for the services and products that those customers want,” he said. Fair enough.

Even if the extra charges are annoying, they effectively result in relatively more affluent and less price-sensitive customers subsidizing travel for everyone else. Without the add-ons, base fares would be higher. Some people simply wouldn’t be able to afford to take their family on vacation. The CEO seems to understand that letting markets determine prices is the best way to maximize public welfare.

But then he took a regrettable flight of left-wing fancy. Asked whether he has a responsibility for dispelling public distrust in CEOs, he replied: “Wealth inequality has become a danger to our society, and we need to address that.” By we, he means government.

He added: “We should have a national wealth tax—it won’t work by state because people will just move. And I think we should have inheritance taxes that get close to 100% at some level. I would pay them.” Well, no he wouldn’t. Inheritance taxes are levied on inheritors, so his kids or other heirs would pay the bill.

Or they might not, since death and inheritance taxes encourage tax avoidance. The same is true of wealth taxes. Washington state this year reversed its increase in its top marginal estate tax rate to 35% from 20% for this reason. United has its headquarters in Chicago, but Mr. Kirby lives in Texas, which has no state income tax. Does he pay income tax in Illinois?

There’s also nothing to stop Mr. Kirby from bequeathing his fortune, or donating his $32.3 million in compensation last year, to the feds. Even better, how about offering more leg room in all rows and eliminating middle seats as a gesture to the hoi polloi? We suspect he’d say that none of these suggestions would reduce inequality or the national debt. But the same goes for a wealth tax, which punishes successful entrepreneurs.

This isn’t Mr. Kirby’s first ride on the left-wing jet stream. During Woke 1.0, Mr. Kirby declared that two things “where we want to lead and make a difference” are “diversity and inclusion, and climate change.” Customer service apparently takes a back seat to reducing CO2 emissions.

George Will writes about “the cascading absurdities of a downward-spiraling presidency.” A slice:

Trump, however, is thinking about something more important to him than Europe’s largest war since the one that Munich presaged. He is after votes for Republicans, so he wants to shred another law, the one against buying energy from Russia.

He wants to buy diesel, which he weirdly thinks will arrive in time to lower the prices that have furious farmers blaming the Iran war for making it excruciating to fuel their combines. And long-haul truckers are incandescent about $1,000 fill-ups.

Iowa Republican Sen. Chuck Grassley, 93, who has seen much but not learned enough in his 51 years on Capitol Hill, wants Trump to ban diesel exports. He approvingly cites President Richard M. Nixon’s 1973 ban of soybean exports. Herewith another tutorial about the Law of Unintended Consequences, which is: The unintended consequences of 10-thumbed government interventions in social complexities are often larger than, and contrary to, the intended ones.

The Financial Times’s Gillian Tett says Nixon’s measure did briefly suppress domestic soybean prices. But (per a University of Illinois scholar’s report) it also infuriated some U.S. customers. In 1974, Japan began investing heavily in Brazil’s soybean potential. By 2015, Brazil exported more soybeans than did U.S. farmers. In 2025, Brazilian soybean sales were almost double U.S. sales.

Dean Ball tweets: (HT Scott Lincicome)

American chattering classes love to hate our country’s financial services sector, but mark my words: the depth and versatility of U.S. capital markets will be our mightiest weapon in the singularity. Anti-finance sentiment, still fashionable on both left and right, is low IQ.

GMU Econ alum Daniel Smith is correct: Today, “the road to serfdom runs through both parties.”

Casey Mulligan explains that “you pay when your state taxes hospitals.” A slice:

Medicaid’s financing gimmicks have raised costs for Americans with private health insurance. A new Department of Health and Human Services study estimates that between 2003 and 2019 state provider taxes, which at adoption ran up to 3.5% of hospitals’ net patient revenue, raised premiums for employer-sponsored single coverage by 1.5% to 1.7%.

Provider taxes are supposed to finance the nonfederal share of Medicaid payments. States obtain federal matching funds based on those proceeds, then return money to providers through supplemental payments. Hospitals can receive more than they paid in taxes, while states draw additional money from Washington. Little wonder that hospitals sometimes lobby to be taxed.

A common defense of this system is that additional Medicaid money enables hospitals to charge privately insured patients less. But medicine isn’t an accounting exercise with a set revenue requirement. It’s a service supplied by people who respond to compensation. Nurses, physicians and resources don’t become more abundant merely because Washington contributes more dollars.

An HHS report released in August quantified how medical markets respond to taxes, prices and payment incentives. A hospital tax raises the cost of serving an additional commercially insured patient, while higher Medicaid payments increase the return on resources used for Medicaid services, making them more expensive for other purchasers. Together, these forces drive a 1.4% change in non-Medicaid provider prices for each percentage-point change in the provider tax rate.

In our new study, my colleagues and I examined private-employer survey data and compared states that adopted hospital taxes with those that didn’t. Our estimated 1.5% to 1.7% increase in single-coverage premiums accounts for national trends and differences in state unemployment.

Reason‘s Billy Binion ponders Trump’s obsession with renaming things.

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… is from page 2 of my former teacher – and newly elected president of the Mont Pelerin Society – Randy Holcombe’s superb 1985 book, An Economic Analysis of Democracy:

Democracy in America, originally established as a means to limit the power of government, has evolved into an end in itself. Rather than being viewed as a tool for safeguarding the rights of its citizens, democracy has become a mechanism for furthering the will of the majority.

DBx: Yes, unfortunately.

Too many people believe that, as long as there are regular and fair elections, the rights of individuals in electoral minorities cannot be violated. This belief is not one that was held by America’s founders. Even more importantly, this belief is one that does not take rights seriously.

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I don’t think that Julius Krein realizes just how thoroughly he was bested by Phil Magness in this debate.

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

Mr. Estes:

Thanks for your email in response to my blog post this morning on tariffs.

You’re skeptical of my claim that commerce among people with different national residences differs in no economically relevant way from commerce among people with different eye colors. You write that you “cannot imagine what the group ‘hazel-eyed people’ might be thought to do to hurt blue and brown-eyed people economically.”

Your point is fair, so let me use a different example – namely, trade among Americans of different ages. As a group, Americans between the ages of 35 and 64 are generally net savers, while younger Americans save much less and retired Americans typically draw more heavily on previously accumulated savings. Yet members of each age group freely trade with members of all other age groups. Indeed, insofar as younger and older Americans spend more than they currently earn, financing the difference with savings accumulated by middle-aged Americans, the former can be said to run “trade deficits” with the latter, who run corresponding “trade surpluses.”

But obviously, these differences in saving and spending patterns are not evidence that one age group economically exploits another. Yet the same logic that prompts Pres. Trump and other protectionists to impose tariffs on imports because America consistently runs international trade deficits should – were this logic economically sound – prompt these protectionists to endorse protective tariffs on goods and services offered for sale by middle-aged Americans to younger and older Americans.

Of course, not even Mr. Trump would favor such tariffs. But he could not consistently defend protective tariffs on trade between Americans and foreigners while rejecting similar tariffs on trade between Americans of different ages.

Sincerely,
Don