GMU Econ alum Dominic Pino isn’t impressed with economic-populists’ attachment to reality. Two slices:
Economic populists will often talk as though they are calculating realists who are thinking strategically, as opposed to us crazy free-market ideologues who live in the fantasy world of perfect theory.
So let’s put on our strategic-thinking cap and look at the government’s pending decision — supported by Joe Biden, Kamala Harris, Donald Trump, and J. D. Vance, all in the name of economic populism — to block Nippon Steel’s attempted acquisition of U.S. Steel.
That’s basically what Advancing American Freedom (AAF), the conservative advocacy group led by Mike Pence, has done in a new memo.
AAF starts by looking at the deal itself. Nippon Steel offered $15 billion to buy U.S. Steel. That’s about 40 percent more than the company is currently valued. It’s $8 billion more than the next best offer. “When put to a vote, 98% of U.S. Steel shares supported the acquisition,” the memo says.
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Biden was always going to do what the union bosses wanted, because that’s what Democrats do. But Republican opposition on “strategic” grounds is just as nonsensical as opposition on economic grounds. The supposedly pragmatic realism of populist economics is anything but.
But that’s nothing in comparison with the enormous deficit spending, and debt, that will come about because of Medicare’s and Social Security’s unfunded liabilities. CBO projects that the federal government will have to borrow $124 trillion for those two programs alone. The worse culprit of the two is Medicare.
And then there is the economic damage caused by all the government’s misallocation of capital and the creation of perverse incentives, such as moral hazard, from both handouts to the private sector (some of which Musk has received) and grants to state and local governments. Regarding the latter, according to Chris Edwards at Cato, “federal aid to the states totaled $721 billion in 2019.”
Juliette Sellgren talks with Dartmouth College professor Henry Clark about growth.
Eric Boehm makes clear “why Trump’s child care policy incoherence matters.”
Emma Camp shares some bad, although unsurprising, news from college campuses.
Dan Morenoff identifies a likely cause of corporate CEOs’ retreat from ESG.
Art Carden draws some lessons about political economy from college football.
As the college football season begins, a word to the wise: If you spot your university’s quarterback cruising around campus in a Lamborghini, don’t go all Woodward and Bernstein, thinking you have spotted a Pulitzer-worthy scandal (“Lamborghini-gate”). The quarterback might be looking for the molecular biology lab (or not). His vehicle is his legal, rule-abiding reward for pleasing well-heeled alumni by bringing his talented passing arm to their alma mater before he graduates to the NFL. There, he might even take a pay cut.
Welcome to the world of NIL, where athletes are paid for the use of their name, image and likeness. What has been said of Washington (the shocking thing is not what’s done there that is illegal, but what is legal) can now be said of the college athletics industry. It is lightly superintended — very lightly — by the NCAA, which endearingly persists in referring to “student athletes.”
The new football season, which will end shortly before spring practices begin, will be the first in forever to be free of sanctimony about “amateurism.” Few recruiting rules will be broken because few such rules exist.
