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My intrepid Mercatus Center colleague, Veronique de Rugy, is correct to argue that Biden’s opposition to the sale of U.S. Steel to Nippon reveals just how close Biden is to Trump on questions of international trade. A slice:

Such government meddling is what American steel producers get for having clamored for decades—often successfully—that they need protection from foreign competition. The Trump steel tariffs are the latest expression of this attitude. But one stupid policy move doesn’t justify a second. As soon as the announcement of Nippon’s $14.1 billion deal with U.S. Steel was made public, fans of protectionism and industrial policy, including prominent policymakers, came swarming out of the woodwork to explain why the government should be able to override, or at least modify, the decision of the rightful owners of a company to sell their company to a particular buyer.

Assertions of dangers to “national security” are being used to scare Americans into thinking that a good deal for investors, employees, and the U.S. economy will somehow make America less militarily secure. This is nonsense.

Japan has been a strong ally of the U.S. for over 60 years. In a recent piece, the Cato Institute’s Scott Lincicome and Alfredo Carrillo Obregon remind us that “the Defense Department doesn’t currently buy from U.S. Steel, and DOD needs just 3 percent of domestic steel production to meet its procurement obligations.” Furthermore, U.S. Steel, despite its historic significance, is no longer a major player in the steel industry and could benefit from Nippon Steel’s investment and technology enhancements. Besides, foreign investments, including those from Japan, are typically beneficial to the domestic economy and workforce—and to the millions of Americans holding corporate shares in retirement portfolios.

According to the fearmongers, Nippon Steel, being a Japanese company, perhaps harbors secret plans to spend $5 billion above U.S. Steel’s market capitalization to shutter it. Obviously, this is total nonsense. It should go without saying that investors don’t purchase companies to then shut down those companies’ profitable operations. Yet it needs to be said, since that’s one of the main fears about the acquisition. The fact is that Nippon, by saving U.S. Steel and enhancing the domestic production of steel, will bolster our national security. Opponents of the deal ignore this reality. Yet again, the facts don’t seem to matter to those who use nationalist rhetoric to oppose Americans’ peaceful commercial dealings with non-Americans—in this case, even a crucial, decadeslong ally.

To all industrial-policy enthusiasts, fancying as you do that government is to be trusted to wisely and skillfully allocate large swathes of resources better than these resources are allocated by markets, read this piece in today’s Wall Street Journal by the economist Art Diamond and then tell me if and why you continue to think your industrial-policy ideas to be sound. Here’s a slice from Art’s piece:

More than $136 billion of Covid disaster loans issued by the U.S. Small Business Administration—about one-third of the total $400 billion loaned—show signs of being fraudulent, according to the SBA’s Office of Inspector General.

Misery sometimes loves company, but I doubt that taxpayers will feel consoled when they learn that they aren’t the only victims of the fraud. Last January I started receiving ominous letters from the SBA saying I was overdue on payments for a $42,200 loan made to the Arthur M.D. Potato Farm under the Covid-19 Economic Injury Disaster Loan program. I wasn’t overdue. I never got the loan. I’ve never even farmed.

I spent many hours filling out forms and making phone calls trying to explain the situation to SBA officials. Two months later they admitted without apology that I wasn’t responsible for the loan.

After I shared this story in a retirement talk to faculty members and guests of my economics department, a colleague told me that he also had received an ominous letter from the SBA, though his was about a Covid tomato farm loan.

If SBA officials had spent 30 seconds searching Google for my name and my colleague’s name, they easily could have found the details of our careers. Both of us have spent decades as full-time academics, and neither has done any farming. The same month I received my first overdue-loan notice from the agency, I was teaching my last semester of economics after a 42-year career. As a steward of taxpayers’ money, the SBA should have done its due diligence.

GMU Econ alums Louis Rouanet and Thomas Savidge weigh in on dynamic pricing.

Cato’s Chris Edwards explains that which shouldn’t – but, alas, does – need explaining: Subsidies raise costs.

Speaking of the Cato Institute, its new journal, Free Society, is now launched.

Brent Skorup ponders “the censorship-industrial complex.” A slice:

In oral arguments on Monday, the U.S. Department of Justice urged the Supreme Court to let government officials, including federal law-enforcement agencies, tell social-media company officials, in secret, what content to delete. In the case of Murthy v. Missouri, the central question is when government coordination with social media violates the First Amendment. The government’s lawyer conceded that the government’s intense, multi-agency pressure on social-media companies to remove content and accounts was unusual, but he effectively threw tech companies under the bus, saying that the companies were voluntary partners in the government’s fight against “misinformation.” As former CIA analyst Martin Gurri has remarked, “There’s no precedent for what’s going on unless you go back to Franklin Roosevelt’s wartime censorship.”

The people suing the government, including former Harvard professor Martin Kulldorf, allege that government officials coerced YouTube, Twitter, and other tech companies to remove their online posts and commentary, including criticisms of the government’s Covid-19 policies. The plaintiffs presented damning evidence, including internal government emails and testimony from government officials. They documented federal officials’ immense pressure on social-media companies, including profane emails and vague threats from White House officials to Facebook officials to remove vaccine “disinformation,” as well as messages from the FBI to several social-media companies with spreadsheets of accounts and content that the agency wanted removed. The FBI followed up on its requests at quarterly meetings with companies, keeping internal notes of which companies were complying with FBI demands. Perhaps the messages were innocent — we may never know because the FBI used encrypted communications and has not revealed their contents.

Kevin Bass quotes Jay Bhattacharya:

“One of the things that we found in the Missouri vs. Biden case was that the Biden administration was telling Facebook to censor and shut down groups of vaccine-injured patients, even though their stories were true. It didn’t matter that they were truly vaccine-injured. All that mattered was that the Biden administration did not want that information out, because they thought it would be bad for the public to know it. So they coerced Facebook into shutting that down.”

David Henderson looks back at the authoritarianism unleashed and tolerated in the name of fighting covid. Two slices:

After having moved from Canada to the United States, partly to be wealthier and partly to be freer (those two are connected, by the way), I was shocked, in March 2020, when President Trump and most US governors imposed heavy restrictions on people’s freedom. The purpose, said Trump and his COVID-19 advisers, was to “flatten the curve”: shut down people’s mobility for two weeks so that hospitals could catch up with the expected demand from COVID patients. In her book Silent Invasion, Dr. Deborah Birx, the coordinator of the White House Coronavirus Task Force, admitted that she was scrambling during those two weeks to come up with a reason to extend the lockdowns for much longer. As she put it, “I didn’t have the numbers in front of me yet to make the case for extending it longer, but I had two weeks to get them.” In short, she chose the goal and then tried to find the data to justify the goal. This, by the way, was from someone who, along with her task force colleague Dr. Anthony Fauci, kept talking about the importance of the scientific method. By the end of April 2020, the term “flatten the curve” had all but disappeared from public discussion.

Now that we are four years past that awful time, it makes sense to look back and see whether those heavy restrictions on the lives of people of all ages made sense. I’ll save you the suspense. They didn’t. The damage to the economy was huge. Remember that “the economy” is not a term used to describe a big machine; it’s a shorthand for the trillions of interactions among hundreds of millions of people. The lockdowns and the subsequent federal spending ballooned the budget deficit and consequent federal debt. The effect on children’s learning, not just in school but outside of school, was huge. These effects will be with us for a long time. It’s not as if there wasn’t another way to go. The people who came up with the idea of lockdowns did so on the basis of abstract models that had not been tested. They ignored a model of human behavior, which I’ll call Hayekian, that is tested every day.


Donald Trump, for the first few months of the pandemic, Dr. Anthony Fauci, Dr. Deborah Birx, many other US governors and mayors, and countless other intellectuals and bureaucrats were men and women of system. They thought they had the answer to deal with a spreading disease and made no strong distinction between the low risk to young people and the much, much higher risk to the elderly.

National Review‘s editors write about the New York Times getting around to admit that the pandemic of school closures was a calamity. A slice:

It is nothing short of rewriting history to suggest that school closures were just another pandemic-era conundrum policy-makers had to navigate with imperfect information. As the Democratic governors of seven northeastern states wrote in response to New York City’s return to remote learning in the fall of 2020, “in-person learning is safe,” “even in communities with high transmission rates.” The deleterious effect remote learning was having not just on student performance but also on young people’s mental health was observable and, indeed, chronicled at the anecdotal and clinical level. And yet, critics of school closures were routinely rebuffed. They were told that educational facilities couldn’t reopen, not just because schools had become death traps for teachers but because the country had not committed sufficient resources to teacher safety. That was the point at which the pandemic became an extortion racket.