By “traditional economic models” here, they mean, roughly, actual economics, as opposed to magical thinking where we can tax our way to prosperity through higher prices. And it is not true that actual economics teaches that “tariffs can never stimulate domestic production.”
Economic analysis of tariffs frequently finds that they increase the domestic production of particular goods. (I made a list of some recent economic studies in this post if you want to read the details.) It actually expects that they would.
A tariff is a tax on an imported good. If you tax something, you get less of it. A tariff reduces imports of the good it taxes. That reduces total supply and causes the price to rise. The higher price tells domestic producers of that good to produce more. Therefore, economic theory teaches that tariffs increase domestic production of the goods to which they are applied.
That’s a description of what will happen when tariffs are imposed. To judge whether they are a good idea, we need to ask: At what cost? And that’s where economic analysis consistently finds tariffs lacking.
Productivity is exactly what all profit-driven innovation achieves. But how do “we” increase productivity while simultaneously “discourag[ing] automation?” “Supporting democracy?” The same “we” who “steers” the private efforts, private investments, and private property of others to “democracy” is about the most anti-democratic vision I can imagine. Does anyone need to “steer” technology to “foster creativity and innovation?”
The tool is the regulatory state, law, and the industrial policy state. The first two can only forbid activity, reduce the choice set. The third can subsidize, but in practice serves to protect the status quo and political goals.
Fiona Harrigan accurately describes Trump’s immigration picks as “terrible.”
The idea is anti-constitutional, and it would eliminate one of the basic checks on power that the Founders built into the American system of government. If Mr. Trump gets away with it, the next Democrat to win the Oval Office would whoop through left-wing nominees. Whoever holds the Presidency would gain unilateral power to name cranks and cronies to offices of immense authority. Or maybe Mr. Trump’s attempt to eviscerate the Senate’s constitutional role would go to the Supreme Court.
In an age of jumbo jets and cellphones, the original purpose of recess appointments is “an anachronism,” as the judicial giant Justice Antonin Scalia once put it.
So perhaps it was only a matter of time before the step on the wrong side, Mr. Gaetz, Mr. Trump’s choice for attorney general. Few jobs are more pressing in Washington than overhauling the politicized Justice Department—as Mr. Trump knows better than most. So the decision to pick a self-promoting featherweight disliked by 98% of his colleagues and towing a steamer trunk of skeletons is foolish indeed. It’s the kind of choice that makes even true supporters wonder how easily Mr. Trump is gulled by Twitter flash.
Also critical of the Gaetz nomination is Reason‘s Jacob Sullum.
Mark Jamison counsels Trump to “abandon Biden’s misguided war on big business.”
Chris Freiman writes insightfully about so-called “price gouging.”
