J.D. Tuccille is correct: “Trump’s destructive tariff proposals will make us all poorer.” A slice:
With Trump proposing 60 percent tariffs on Chinese goods and universal tariffs up to 20 percent, we’re in Hawley-Smoot territory, and risk another trade war. That means higher prices for American consumers, stiffer costs for American businesses, and retaliation that could, again, torpedo international trade.
That’s not how you build prosperity.
Karl Rove explains some of what Trump gets wrong about William McKinley. A slice:
McKinley didn’t stop there, continuing to promote reciprocity. His most powerful advocacy came at the Pan-American Exposition in Buffalo on Sept. 5, 1901. Addressing representatives of trading partners and a large crowd, the president heralded global modernization, saying “isolation is no longer possible or desirable.” America’s “capacity to produce has developed so enormously,” he declared, that we can’t entertain the “fancied security that we can forever sell everything and buy little or nothing.” He called for “a broad and enlightened policy” of reciprocal agreements, “essential to the continued and healthful growth of our export trade.” His words were warmly received.
They were also his last public ones. The following afternoon, McKinley was shot by an anarchist while receiving visitors in the Exposition’s Hall of Music. He died eight days later.
Mr. Trump skips over a lot of history when he calls McKinley “a big tariff guy.” And he misses the facts when he insists America was “probably the wealthiest it ever was” in the 1890s because of tariffs. Starting in 1893, America wallowed in a depression that lasted nearly four years. It ended only after McKinley defeated William Jennings Bryan over the Democrat’s call for an inflationary silver currency. McKinley’s endorsement of the gold standard restored business confidence. It was this sound-money policy—not tariffs—that restored prosperity.
I argue that much of the policy debate reflects the wrong lessons from the “China shock,” including that trade reduces employment. Indeed, I argue that trade is not about jobs at all — it is about consumption, productivity growth, and wage growth.
You can tell the Pennsylvania Senate race is tightening because CNN on Wednesday rolled out a hit piece on GOP Senate candidate Dave McCormick’s record as former CEO of Bridgewater Associates. The story happens to fit perfectly with Democratic Sen. Bob Casey’s campaign strategy vilifying private business.
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Well-diversified investors take short positions to hedge risks in their portfolio. As the Biden Securities and Exchange Commission explained last year, “short selling provides the market with important benefits, such as providing market liquidity and pricing efficiency.”
Yet the CNN story makes short-selling sound nefarious. “Short positions, which are essentially bets that the companies’ stocks will drop, can hurt corporations by depressing their stock prices, making it harder to gain new financing, invest or hire more workers, according to experts,” CNN says. “For financial institutions, short positions can be lucrative.”
Yes, and so can long positions. The goal of investing is to make money, but short sellers can also lose money if the price of stocks they short rise before their short bets come due.
Samuel Gregg looks back on the contributions of Wilhelm Röpke, who was born 125 years ago on this date. Two slices:
Born 125 years ago today, in the northern German town of Schwarmstedt into a devoutly Protestant and classically liberal upper middle-class family, Röpke is remembered today as the intellectual force behind Ludwig Erhard’s liberalization of the German economy in 1948. Within ten years, this transformed a nation buried by a war of unparalleled destruction and 12 years of totalitarianism and economic dirigisme into Europe’s economic powerhouse.
But while a distinguished economic theorist who influenced economic policy during both the Weimar Republic and the postwar Federal Republic, Röpke was always more than an economist. When Röpke first came to the notice of another classical liberal economist, FA Hayek, it was because Röpke was “one of the few young German economists seriously interested in theoretical questions.” Yet as Hayek also observed in a tribute to mark Röpke’s sixtieth birthday, “Röpke realized at an early stage, perhaps earlier than most of his contemporaries, that an economist who is nothing but an economist cannot be a good economist.”
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Policy victories matter. No one understood better than Röpke how abolishing price-controls and the establishment of monetary stability in 1948 had saved West Germany from economic catastrophe. Röpke’s bigger message, however, was that if free marketers didn’t identify and address the subterranean intellectual forces driving collectivist impulses, despotism would triumph.
We see this conviction at work in Röpke’s sharp critiques of the Keynesian economic revolution. According to Röpke, Keynes’s effective creation of macroeconomics and his disciples’ efforts to translate concepts like aggregate demand, aggregate employment, and aggregate capital-flows into mathematical formulae and econometrics reflected the influence of scientism — the idea that the only way to know truth is through science and the empirical method — upon intellectuals. In Röpke’s view, scientism encouraged tendencies to regard the economy “as the result of mechanical quanta subject to precise measurement and direction by an omnicompetent technical human intelligence.”
Marcos Falcone justly praises Taiwan.
“Universal Basic Income Shows Why Giving People ‘Free Money’ Doesn’t Work.“
