George Will rightly ridicules the ridiculous, competing magic acts of Harris and Trump. Two slices:
Asked if he believed in infant baptism, Mark Twain reportedly replied: “Believe in it? Hell, I’ve seen it done!” Today, adding to humanity’s history of magical beliefs, we will soon see the bane of inflation banished by this nifty idea: When prices rise, order some federal bureaucrats to bark at them, “Stop that!”
Adding a dash of substance to her one-word political program (“Joy”), Kamala Harris says that as president, she would tell the Federal Trade Commission to first define “excessive” price increases, then prosecute the living daylights out of the miscreants responsible for cornflakes costing (by some undisclosed metric) too much. She who was in the administration that has approved spending in trillion-dollar tranches, thinks that understanding inflation in terms of mundane matters such as supply and demand is for weaklings who do not grasp the marvels that muscular government can accomplish. Next? Perhaps legislating that lobsters shall grow on trees.
Harris, to whom the private sector is as foreign as Mongolia, has added this filigree to her platform of magic: Because houses cost too much, she proposes a $25,000 subsidy for first-time buyers. She would solve the problem of a commodity’s high price by increasing monetary demand for it. What could go wrong?
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Donald “Tariff Man” Trump’s Harris-esque contribution to this year’s magical beliefs expands upon his 2016 promise that Mexico would pay for his “beautiful” border wall. Now he says China, like all nations that export goods to the United States, will somehow pay the additional tariffs (the rates he mentions vary with his whims) that he promises to impose on everything from everywhere. So remember: When you pay, say, 20 percent extra for an imported appliance, you did not really pay it. Magic!
Protectionism, which amounts to blockading one’s own ports, is, always and everywhere, a tax on consumers. At this point, it is unknowable whether Trump’s tax-increase-by-tariffs would be larger than the potential increase from — this prospect horrifies him — Congress allowing some of his 2017 tax cuts to expire.
Also ridiculing the ridiculous economic policies of Harris and Trump is my intrepid Mercatus Center colleague, Veronique de Rugy. Three slices:
Let’s start with trade policy. Trump’s protectionist stance is well-known, with his administration imposing tariffs on a wide range of goods, particularly from China. He has since announced that he would like to impose an across-the-board 10% and then 20% tariff on imports to the U.S., on top of the those already in place.
But Harris’ stance is hardly better. She has embraced a “worker-centered” trade policy that looks suspiciously similar to Trump’s “America First” approach. Both emphasize protecting existing American jobs and industries, even at the cost of higher prices for beleaguered consumers, fewer resources to start new firms that will lead to more opportunity for the next generation of workers, and reduced economic efficiency. And let’s not forget that during the last four years, the Biden-Harris administration has imposed its fair share of tariffs while keeping many of Trump’s.
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Unsurprisingly, when it comes to government spending, both candidates are reckless. While the Republicans pay some lip service to cutting waste and abuse, neither Trump nor Harris appears willing to reform the utterly unsustainable financing behind Social Security and Medicare — not even to preserve these programs for lower-income Americans. Not only that, but we will have a catastrophic debt crisis if they’re not reformed, yet neither candidate cares.
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The media narrative of stark contrasts hides the fundamental similarities in each candidate’s approaches to economic policy. Both Harris and Trump represent variations on a theme of big, fiscally irresponsible, hyper-interventionist government. Yes, Trump would deregulate some part of the economy (the best part of his economic plan), but in the end, neither the Republican nor Democratic candidate believes in comprehensive market-oriented reforms.
Peter Suderman, alas, is correct: “Economic liberty now has no place in either party.” A slice:
For years, populists on both the left and right have griped that Washington is in the thrall of libertarians, market fundamentalists, or perhaps neoliberals—despite the rarity of any politically powerful figure identifying as such.
Recent events should put those complaints to rest: With the elevation of Sen. J.D. Vance (R–Ohio) to the Republican presidential ticket, and, in a different way, Vice President Kamala Harris, American politics is now in the grips of a kind of neopopulism, one implicitly founded on the rejection of that synthesis, and in particular on the abandonment of the free-market, limited-government worldview.
That, in turn, has created a new class of politically homeless: Call them fusionists, call them classical liberals, call them libertarians—but those who prioritize economic liberty have essentially no place in either major party. That’s a significant shift away from foundational American values—and an unsettling departure from the worldview that made America prosperous and powerful.
Meanwhile, goods and services whose actual prices are occluded by government control or interference have become much more expensive. The costs of college tuition, healthcare, housing and other goods and services that are heavily regulated by state and local governments have markedly outpaced inflation, while cars, computers, clothing and other less regulated goods and services have generally become more affordable.
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Denizens of the public and nonprofit sectors have become a kind of new class that thinks it is or should be immune to the market forces that tend to make nearly everything outside the public sector more affordable over time.
The value of accurate prices is that they force necessary trade-offs. Progressives’ approach is to start with the ends — what they think the accurate price (or wage) should be — and reverse-engineer the means to fit them. That hasn’t worked for 40 centuries.
GMU Econ alum Nikolai Wenzel explains that the ‘solution’ to poverty isn’t more money.
Lina Khan struck out again in court on Tuesday when a federal judge tossed the Federal Trade Commission’s sweeping ban on employee noncompete agreements. Maybe one of these days the FTC Chair will show respect for legal boundaries.
Judge Ada Brown scored the FTC for overstepping its authority by issuing a 570-page rule this spring that prohibits most noncompete agreements nationwide. Such employment covenants restrict workers from joining competitors or starting their own firms for a specified duration after leaving. They are intended to protect a firm’s trade secrets and investment in workers.
