More Bizarro Thinking from the Trump Administration

by Don Boudreaux on May 21, 2019

in Crony Capitalism, Trade

Here’s a letter to the Wall Street Journal:

Editor:

You beautifully expose many flaws in the Trump administration’s ludicrous assertion that auto and auto-parts producers not owned by Americans pose a national-security threat ( “Case of the Killer Toyotas,” May 21). Let me mention a flaw in its proposed remedy.

The administration claims that it has discovered a “lag in R&D expenditures by American-owned producers.” The proposed solution is to protect these producers from the competition of skilled rivals. But this ‘solution’ makes no more sense than it would make for me, upon discovering a lag in some of my economics-students’ research efforts, to protect them from the competition of other, higher-performing students.

Just as it would be absurd to expect that such protection offered by me to lagging students would encourage them to perform better rather than worse, it is absurd to expect that such protection offered by Uncle Sam to American producers will encourage them to work more diligently and creatively rather than more lazily and indifferently.

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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