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GMU Econ alum Dominic Pino reveals “the arrogance of protectionism.” Three slices:

Benjamin Wallace-Wells has written a piece about Robert Lighthizer, the U.S. trade representative during Donald Trump’s first term, for the New Yorker. It wonders why Lighthizer, one of the most prominent protectionists in America, is not part of the administration. One of his former aides is Trump’s nominee for trade representative this time around, and his ideas certainly have not left the administration.

Wallace-Wells does a good job poking at some of the contradictions in Lighthizer’s outlook and gets him to say some revealing things. He accurately describes Lighthizer as a Washington “operator,” someone who has spent his entire career in and around positions of power. Yet Lighthizer views himself as “anti-elite” (or, as the New Yorker insists on writing it, “anti-élite”).

Lighthizer does this by rooting himself in the Midwest. He was born in Ashtabula, Ohio, and his place of birth is frequently mentioned in the press as a sort of justification for his anti-trade beliefs, as though protectionism is naturally occurring in the waters of Lake Erie. This is usually dressed up as some kind of personal story about destroyed factory towns, but as Wallace-Wells notes, Lighthizer’s father was a doctor, and his mother attended college. They were not put out of work by offshoring, and they were financially well off, sending him to Catholic schools that put him on the path to acceptance at Georgetown. Lighthizer has not lived in Ohio since his childhood and was interviewed by Wallace-Wells in the Palm Beach condo where he now lives.

He’s able to afford that because, as a piece from Bloomberg put it in 2018, “after leaving the Reagan administration, Lighthizer made a fortune as a swaggering, Porsche-driving lobbyist-cum-lawyer for the steel industry at Skadden, Arps, Slate, Meagher & Flom LLP.” Many of the steel companies he once lobbied for, such as Bethlehem Steel, National Steel, LTV, and International Steel Group, no longer exist. He also lobbied for the former Indian steelmaker Ispat, which would make him a traitor to supposed economic nationalists if he weren’t one of their leaders. “Visitors to his home in one of Washington’s toniest neighborhoods are greeted by an almost life-size portrait of him,” Bloomberg reported. Normal, salt-of-the-earth guy, Lighthizer is.

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On a past episode of my podcast, Econception, I discussed this with recovering trade lawyer Scott Lincicome of the Cato Institute. You can listen to that conversation here. More recently, Judge Glock of the Manhattan Institute wrote for the Free Press about why protectionism is one of the swampiest things in the Swamp.

“Tariffs are managed by opaque bureaucracies and manipulated by high-priced lobbyists in order to extract funds from American consumers,” Glock wrote. Guys like Lighthizer get rich off of understanding how that system works and then playing roles on both sides of it, using their experience working in the government to help them better advise their clients who are petitioning that same government.

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Lighthizer is undoubtedly a smart man, and he probably knows more about trade agreements than 99.999 percent of people on the planet. Does that matter? Should a smart person get to reorder the U.S. trading system? Is that a free economy? Is it republican government?

Distilled to its essence, protectionism is the belief that well-connected, highly educated government insiders are better at deciding how trade should be structured than the billions of people making choices in the global market. It’s pro-elite to its core and asks you, the consumer and citizen, to put enormous amounts of faith in bureaucrats and politicians who have demonstrated time and again that they do not deserve it. And it makes people like Robert Lighthizer wealthy for producing nothing except billable hours, government paperwork, and cranky economic theories that rest on the assumption that they are smarter than everyone else.

My intrepid Mercatus Center colleague, Veronique de Rugy, identifies “one more reason to hate inflation.” A slice:

But here is another reason to be super annoyed with inflation: While workers’ wages lag behind rising costs, the government benefits from inflation through increased tax revenues, both from higher nominal incomes pushing people into higher tax brackets and from taxes on inflated prices. This phenomenon, known as bracket creep, effectively transfers wealth from citizens to the government coffers without requiring explicit tax legislation.

Mike Munger expertly guides us to understand the issues raised in Thomas Piketty’s 2014 Capital in the Twenty-First Century. Two slices:

Piketty’s work — both his central empirical claims, and the causal model he cites to support those claims — was debunked almost immediately after it was published.[9] Attempted revisions and “fixes” have not addressed the critiques in any important way.[10]Yet the empirical claim about growing inequality has become more, not less, widely cited; worse, the “solutions,” a variety of permanent confiscatory wealth taxes, have become Beltway orthodoxy.[11]

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Income distributions are not static, but in fact dynamic, at least in vigorous, high-growth systems like capitalism.[28] In the US it is still true that children are likely to have higher incomes, adjusted for inflation, than their parents, and that this difference is greatest for those born at the bottom of the economic ladder.[29] So while it is perfectly true that the “top X percent,” for whatever X you choose, make more money, by definition, the actual identities of the people in that “X percent” are fairly fluid. There will always be a bottom 10 percent, and a top 10 percent, by the mathematical definition of income deciles. But it is not the same 10 percent getting richer, or poorer, over time.[30]

The Editorial Board of the Wall Street Journal rightly decries Trump’s childishly vindictive decision to remove security protection from John Bolton, Brian Hook, and Mike Pompeo. A slice:

The possibility of falling out of President Trump’s good graces is an occupational hazard for good people who serve in his Administration, but this looks like a new low: Mr. Trump reportedly has ordered an end to security protection for three former advisers who are living under threat of assassination by Iran. Pray it won’t happen, but what if one of them now gets attacked?

Roger Pielke explains that “it is pricing, not risk, that underlies California’s insurance crisis.”

George Will argues that “there were ample reasons, not about his personal life, for rejecting Hegseth.” A slice:

[Sen. Jack] Reed [D-RI], who has voted to confirm nine defense secretaries, including those of the first Trump administration, said: The defense secretary’s challenge “is to remove partisan politics from the military. You propose to inject it.”