GMU Econ alum Dominic Pino rightly criticizes J.D. Vance’s economic ignorance. A slice:
As far as policy is concerned, the threat to U.S. manufacturing jobs is not from trade. It is primarily from taxation, regulations, forced unionism, and hostility to foreign direct investment. If people in Michigan are upset about losing automotive jobs, they should look to Lansing first. States with low taxes, low levels of regulation, and right-to-work that welcome investment no matter its source have been taking residents and economic activity from states that don’t, and Michigan has been on the losing end of that policy fight for decades.
Making Vance’s policy argument even more convoluted is that earlier in the same speech he bemoaned the fact that “the average new car costs nearly $50,000.” Requiring that more cars be manufactured in the United States, one of the world’s highest-wage countries, is not going to make them cheaper. Neither will tariffs, another policy Vance supported in the speech.
Economists understand that tariffs ultimately raise the prices of goods they are applied to. Tariffs are a tax on imported goods. This tax is paid by consumers. Americans must shoulder the additional cost for the same imported goods or pay higher prices for domestically made substitutes (whose quality might also deteriorate because their producers are shielded from foreign competition).
The poll reveals just how much Americans’ initial support for protectionist measures crumbles when faced with the idea of higher prices. For example, when asked if they support tariffs on imported blue jeans, 62 percent initially favor such measures to boost domestic production and employment. However, a mere $10 price increase due to these tariffs flips the majority to oppose them. When the price hike reaches $50, a staggering 87 percent oppose the tariffs.
Matt Weidinger isn’t impressed with Kamala Harris’s economic acumen. A slice:
As a senator, Ms. Harris proposed two even larger UBI programs that would have displaced more work. In 2019 she introduced her “signature” bill proposing a UBI for lower-income adults, including childless adults. According to a Federal Reserve Bank of Atlanta report, high effective marginal tax rates on modest-income work (due to progressive tax rates coupled with phasing out current benefits) already “effectively lock low-income workers into poverty.” The phaseout of Ms. Harris’s new $3 trillion entitlement would only increase current disincentives to work and advance.
In 2020 she proposed a pandemic UBI program to issue most Americans $2,000-a-month “crisis payments.” That reckless proposal would have doled out a total of $84,000 to each adult and up to three children in households with adjusted gross income under $200,000 (or $150,000 for single-parent households). The total cost would have been $21 trillion.
The two-hour conversation spanned topics from radioactive fallout in Japan to the speed of prescription-drug approvals. Mr. [UAW president Shawn] Fain was listening closely. He seized on a single line about halfway through. “You’re the greatest cutter,” Mr. Trump said, praising Mr. Musk’s management. Tesla workers aren’t unionized, despite years of UAW attempts. “They go on strike,” Mr. Trump added, “and you say ‘That’s OK—you’re all gone. You’re all gone. So every one of you is gone.’ ”
Mr. Trump didn’t mention Tesla by name, and Mr. Musk gave no response beyond a chuckle. Yet the exchange was too much for the UAW. It filed a complaint against both men with the National Labor Relations Board. “Workers cannot be fired for going on strike, and threatening to do so is illegal,” the union said.
The complaint is a mighty stretch from so little material. Federal labor law bars employers from promising to fire specific workers who mount a legal strike. It doesn’t prohibit a politician who isn’t the actual employer from musing about it to a CEO in hypothetical terms.
President Biden and Kamala Harris plan to celebrate the Inflation Reduction Act’s two-year anniversary this week. What they won’t mention in their exultation is the damage the law is doing to the development of new medicines.
A portent came last week from Charles River Laboratories, a top research contractor that helps drug makers with clinical trials. The company warned in its quarterly earnings report that pharmaceutical companies are slashing research and development owing to the IRA’s drug price controls.
