There is no point in taking any of the economic assertions in Robert Lighthizer’s new book “No Trade is Free” seriously. That would be the equivalent of a geographer taking seriously the work of a Flat Earth advocate. For many years most economists have clearly understood that free trade is hugely beneficial to both individual consumers and the economies of communities of all sizes. If Paul Krugman and Milton Friedman agree on something, it’s safe to say that it’s likely true.
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As taxes go, tariffs are hidden and unavoidable, which makes them dangerous to liberty and property. History is littered with trade wars that don’t end well. And even if a government could, in lieu of a tariff, offer consumers a choice to “tip” the business that produced domestically manufactured goods at a higher cost, that might be one way to handle the obvious imposition of an unfair and economically inefficient policy onto all Americans. And if some of my fellow Americans wanted to voluntarily help their fellow citizens in the Youngstown, Ohios and Gary, Indianas of the nation, so be it. But forcing all of us, including many of us who don’t benefit from such laws, to pay the costs of maintaining these economically uncompetitive and losing industries is nothing more than a politically motivated transfer to swing voters living in competitive states. It’s pure politics motivated by the unique political institution of the Electoral College. The fact that the Biden administration has also chosen to impose high tariffs on imported goods during this election year lays bare the naked political calculation here.
Bob Lighthizer wants you to join him in what he claims is a moral crusade to save a few American jobs. He fails to mention that ultimately, we will all pay much higher costs to do this and that he, his friends and former clients, and a very narrow sliver of the nation will benefit. He is that rarest of individuals, a lawyer for a bootlegger standing at the Baptist pulpit, hoping you don’t notice who’s putting money in the collection basket on Sundays.
Colin Grabow reveals that a new protectionist bill elevates corporate interests above that of U.S. soldiers. Two slices:
Last month saw the introduction of the Better Outfitting Our Troops (BOOTS) Act, a bill that would prohibit service members from using “optional boots” manufactured outside the United States or without US materials. While presented as a means of ensuring footwear quality, the legislation appears more concerned with the welfare of US bootmakers—and one manufacturer in particular—than those in uniform.
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Introduced by Representatives Nikki Budzinski (D‑IL), Mike Bost (R‑IL), and Rick Crawford (R‑AR), the bill restricts optional boots to those manufactured in the United States with domestic materials and components. Although the legislation’s sponsors claim the measure seeks to promote safety, it’s unclear how reducing servicemembers’ options in selecting footwear advances that goal. Indeed, the opposite seems a more likely outcome.
So why was the bill written? A press release announcing the BOOTS Act holds some clues.
Beyond emphasizing safety, the announcement warns that foreign manufacturers have “taken over the market for Army soldier footwear” (“taking over a market” is protectionist‐speak for providing a valued good or service at an affordable price). The BOOTS Act’s passage, it adds, would “support domestic military footwear production at places like the Belleville Shoe Manufacturing Company”—a manufacturer with facilities in or near the bill’s sponsor’s districts.
It’s difficult not to conclude that driving business to the company, one highly reliant on government contracts touted by Bost and Budzinski, is a primary motivation for the bill. Even, it seems, if that means members of the armed services are left with fewer choices in critical footwear—choices they like as evidenced by the fact that manufacturers not compliant with the BOOTS Act dominate the market.
Politicians and the press mislead voters and readers when they claim that tax cuts for the rich don’t benefit other economic classes. We all gain from new, improved products made possible by innovative startups funded by the wealthy. Excessive taxation, doubtless a feature of a “middle-out” plan, could deplete the funds that entrepreneurs use to start and sustain useful ventures.
Americans shouldn’t worry so much about wealth distribution. Instead, we should be grateful for how the wealthy enable entrepreneurial ideas to come to life, allowing everyone to prosper.
Last week, “the least dangerous” branch (Alexander Hamilton’s description of the judiciary) did something dangerous. By ratifying the unprecedented structure of the Consumer Financial Protection Bureau (CFPB), the Supreme Court incentivized additional slipshod congressional work that will feed the executive branch’s sense of entitlement to unaccountable discretion in making laws and policies. The decision, which some progressives will praise as “judicial restraint,” demonstrates that this anodyne phrase often denotes a dereliction of the judicial duty to compel the other branches to act constitutionally.
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Last week, the court actually held, 7-2, that congressional progressives failed in their proclaimed attempt to pioneer a novel form of unaccountable autonomy for this appendage of the administrative state. Justice Clarence Thomas, joined by Chief Justice John G. Roberts Jr. and Justices Sonia Sotomayor, Elena Kagan, Brett M. Kavanaugh, Amy Coney Barrett and Ketanji Brown Jackson, said there is nothing importantly new about the CFPB’s structure. Either Thomas contradicts himself when referring to the CFPB’s various “novel structural features,” or he has unearthed a novel “original meaning” of “novel.”
The CFPB is doubly insulated from accountability through the appropriations process. The bureau funds itself by its director asserting its congressionally bestowed entitlement, in perpetuity, to up to 12 percent of the Federal Reserve’s operating expenses. These are not appropriated; they are assessments on banks and interest on the Fed’s holdings.
This, Thomas says approvingly, simply means nothing “forces” the CFPB “to regularly implore Congress” for funding. Implore? When did it become optional, even an indignity, for a federal agency to have to ask the people’s representatives for the people’s money?
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Justice Samuel A. Alito Jr., joined in dissent by Justice Neil M. Gorsuch, also unpacks the meaning of “appropriation” but comes to the correct conclusion that the Constitution’s framers would be “horrified” by the CFPB’s structure, which reduces the appropriations clause to “a minor vestige.” The CFPB does not even have to return unspent funds to the Treasury but can build an endowment from unspent funds. As the majority reads it, Alito writes, the appropriations clause “imposes no temporal limit that would prevent Congress from authorizing the executive to spend public funds in perpetuity.”
Also decrying the Consumer Financial Protection Bureau ruling in is Peter Wallison. A slice:
The Supreme Court has now authorized Congress to provide for the funding of agencies from sources—like the Fed—over which neither Congress nor the President has any significant control.
The reason Congress originally did this for the CFPB is clear: The Democratic Congress that created CFPB did not want the agency’s regulation of the financial system to be limited by the “politics” of a democracy; for example, some day, the regulated industry might acquire the power in Congress to reduce the authority of the CFPB.
To prevent this result, the financing of the agency was placed in the Federal Reserve, beyond the control of Congress. Although part of this independence has now been erased by Seila Law, which gave the President the power to dismiss the head of the agency in case he or she pursues policies inconsistent with those of the President.
But now a powerful agency of the government has been placed beyond the control of Congress, and by extension the American people.
Jon Miltimore is correct: So-called ‘net neutrality’ was never about saving the Internet.”
Joakim Book is no fan of Brad DeLong’s Slouching Towards Utopia. A slice:
An economic history of the 1940s, say, would involve production, government wartime dirigisme, debt financing, and postwar inflation. It would consider the faulty notion that big government wartime spending brought depressed economies out of the Great Depression of the 1930s. Instead, what DeLong delivers is a dull, textbook-type account of Britain and Germany’s warmongering. It’s the old-fashioned “maps and chaps” type of history—that aristocratic British flavor of academic investigations that look at all the wrong things (warfare, diplomatic correspondence, voting, or politicking).
Western governments of the interwar years—larger and more invasive than they had ever been—were, to DeLong’s eyes, pursuing “doctrines of orthodoxy and austerity,” with an “insistence on pure laissez-faire, that the government should simply leave the economy alone.”
We’re given many florid phrases about the horrid “anarchy of the market” and how the market “failed” to provide this or that imagined good. DeLong often seems to believe that because things exist in abundance somewhere in the world, we can all have anything we desire—physical distribution, durability, or political and institutional obstacles be damned. That’s an odd thing to publish in 2022, at the tail end of skyrocketing inflation and an energy crisis that, in part, resulted from insufficiently movable energy.
