The U.S. baby-formula market has long been insulated from foreign competition, through tariffs and regulatory policies, so much so that 98 percent of all baby formula consumed in the United States was produced in the United States. The reduced competition led to higher prices, just as economic theory would predict, which then led to calls to subsidize baby formula. The government created the WIC program to do that, initially for people in poverty, but it has since expanded to cover over half of all baby-formula consumption in the country. Now the industry is so brittle that it can be destabilized by a thunderstorm in Michigan.
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The government has countless “Buy American” provisions in laws about the procurement of goods for public-works projects. These provisions are designed to harness the domestic market for domestic projects by prohibiting foreign purchases of certain materials. A 2017 Heritage Foundation report found that not only do Buy American provisions increase costs for supplies, but they also waste money through compliance costs and do not lead to job growth domestically. In fact, the report found that repealing every Buy American provision would add 300,000 jobs nationwide because money currently wasted on compliance could be used productively instead, which would involve hiring more workers.
Foreign countries—and U.S. allies in particular—are a resource to be harnessed. Laws that restrict access to their products and services should be greeted with default skepticism and, as applied to defense purchases, scrutinized to determine whether they serve more to bolster the country’s security or the profit margins of well‐connected domestic firms. In numerous instances, the evidence suggests the latter.
My GMU Econ colleague Vincent Geloso ponders just who will be targeted by the scarily bulked-up IRS. Here’s his conclusion:
It is hard to arrive at a number of the extent of the underestimation of cheating by bottom and middle income groups, but there are clear signs of underestimation. With this in mind, one realises that the political quip that the rich just don’t pay what they owe is humbug. More importantly, one realises that greater enforcement by the IRS may lead to more collection of revenues at the top. However, it may also end up taking away income that, dollar for dollar, is more proportionally important for people at the bottom of the income ladder. In other words, the greater enforcement could be regressive. Policymakers and pundits should ponder this possibility before they wrap themselves in the cloth of virtue.
Nick Gillespie talks with Michael Shermer.
My GMU Econ colleague Bryan Caplan is skeptical of the reality of “politics as exchange.” Here’s his conclusion:
As I’ve said before, politics is cruelty.
In 1948, a Truman supporter shouted, “Give ‘em hell, Harry!” Truman famously replied, “I don’t give them Hell. I just tell the truth about them, and they think it’s Hell.” With rare exceptions, this is the official stance of all successful politicians. Their top goal isn’t to persuade or bargain, but to inflame antipathy and strife. If they can’t utterly win, they want to ensure that current miseries eternally endure. Can’t send your enemies straight to the fires of Hell? Then let’s slowly burn together here on Earth.
My GMU Econ colleague Chris Coyne writes thoughtfully about Nancy Pelosi’s recent visit to Taiwan. A slice:
This also matters beyond Taiwan. The U.S. government maintains a global network of military bases, deploys special operations around the world and is the world’s largest arms dealer. It spends more on its military than the next nine countries combined, including China and Russia. The logic behind these expansive forces and activities is the supposed need for a global hegemon to create and maintain order and freedom around the world. Perhaps. But another outcome could be disorder and a greater chance of conflict by elevating force over peaceful cooperation. By signaling that force is the default strategy, the projection of power can make it harder for others to offer cooperative gestures.
Pat Lynch is unsure just what is Niall Ferguson’s book, Doom.
Steven Malanga decries the “Californifying the U.S. Labor Market.”
K. Lloyd Billingsley is critical of Fauci’s and other U.S. government public-health honchos’ refusal to admit their many mistakes. Here’s Billingsley’s conclusion:
Drs. Collins and Fauci both lied about funding dangerous gain-of-function research at the Wuhan Institute of Virology in China. Collins conveniently retired last year, and Dr. Fauci, a government bureaucrat since 1968, remains at the helm of NIAID. Whitecoat supremacists never have to say they’re sorry.
Elize Aquila tells of how covid-vaccine mandates harmed her college experience.
Many physicians argue that covid-vaccine mandates are counterproductive.
