For somebody who supposedly loves America’s businesspeople, in particular its manufacturers, Donald Trump gives them lots of headaches.
His tariff threats are forcing companies to stock up on inventory and inputs against future disruptions, tying up working capital at a time of rising interest rates. Businesses are employing consultants to pore over their supplier lists searching for vulnerabilities. Their lobbyists are already at work drafting exemption requests.
A U.S. hand-truck maker who imports parts and materials wonders if tariffs will be a net plus or minus. Toy makers wonder if they should relabel their products as hobby items to get more-favorable treatment. U.S. companies spend at least $2,000 per employee per year on IT. They can expect laptop prices to increase $540. New England, comprising 12 million voters, gets a quarter of its gasoline from a refinery in eastern Canada. Guess what? Higher fuel prices are on their way if Mr. Trump follows through with his proposed Canadian tariffs.
And for what, exactly? Approximately universal is the belief that Mr. Trump simply is looking for stagy confrontations with countries he conveniently characterizes as “ripping America off.” Every deal he inks will be the greatest ever. On closer inspection, every deal will consist largely of window dressing aimed at restoring the status quo Mr. Trump just disrupted.
Scott Lincicome reviews Biden’s terrible trade-policy record. A slice:
What most sticks out about Biden’s trade legacy is just how little trade it involved. Instead, as we’ve documented here at Capitolism repeatedly, the era was one of U.S. stasis or outright retreat from the global stage. For example:
- Most of Trump’s “national security” tariffs on steel and aluminum remained in force in their original form or as still-restrictive quotas, including on imports from close allies. Trump’s China tariffs were not just maintained but actually expanded near the end of Biden’s term. And while Trump-era global “safeguard” measures on imported washing machines were allowed to expire last year, the ones on solar products were extended for another four years.
- The administration also barely lifted a finger to restart the popular-but-expired Generalized System of Preferences program (which unilaterally grants limited duty-free access to certain developing-country imports) or to extend the similar African Growth and Opportunity Act, which terminates in September. This failure not only cost American companies billions, but also discouraged trade with and investment in some of the poorest places on the planet—including many that are cozying up to China instead.
- Not only did the Biden administration fail to complete any new comprehensive U.S. bilateral or regional trade agreements, it didn’t even initiate any or ask Congress for “trade promotion authority” (the traditional tool U.S. presidents have long used to negotiate new trade deals for eventual congressional approval). Instead, the administration chose to launch things like the Indo-Pacific Economic Framework and U.S.-EU Trade and Technology Council, which didn’t include traditional trade provisions (e.g., on things like tariffs or services barriers) and were never finished regardless. It also (dubiously) bypassed Congress in seeking narrow bilateral deals on things like “critical minerals,” but those too didn’t get very far. Per my quick research, this marks the first time since the Reagan era that a U.S. president has pulled such a trade agreement O-fer.
- At the World Trade Organization, the Biden administration didn’t just continue Trump-era ambivalence but retreated even further by abandoning a digital trade deal that the United States itself once championed because it would greatly benefit the globally dominant U.S. tech industry. In dispute settlement, meanwhile, the Biden team openly rejected a (mostly correct) ruling on the aforementioned metals tariffs; brought zero new challenges to foreign trade barriers (also unprecedented!); and, perhaps most galling of all, sandbagged the very reform talks that the U.S. alone demanded, thus keeping the organization’s Appellate Body disbanded. (Biden officials literally only engaged formally on the issue a few months ago!). The administration also encouraged the EU to abandon its own WTO commitments by trying to forge a bilateral deal on “green” steel trade—a (bad) plan that also (thankfully) failed!
Outside of these traditional trade areas, there were other disappointments. Via industrial policy measures like the Infrastructure Investment and Jobs Act and Inflation Reduction Act and various executive actions, the Biden team expanded “Buy American” protectionism and clamped down on enforcement of existing local content restrictions (e.g., on what qualifies as “American” and on possible waivers). The administration also dramatically broadened China-centric sanctions and export controls, costing American companies billions in lost revenue but failing to seriously dent Beijing’s technological ambitions (and annoying many allies in the process). And then Biden officials capped it all off with the Nippon Steel-U.S. Steel embarrassment and a last-minute, error-riddled report by the Office of U.S. Trade Representative Katherine Tai on shipbuilding that basically echoes (incorrect) union talking points.
The left’s new social mandates weren’t only an abstract threat to liberty. They wreaked practical damage on American society. With culture as with economics, consolidated decision-making produces inferior results. Big, centralized regimes are generally surpassed by freer, more local efforts.
Data scientists will tell you that even a process as routine as emptying a football stadium of 80,000 fans in a few minutes is an intractable computational problem—if you try to solve it from a master position. You could cover the stadium with hardware and programmers directing fans, and you’d never be able to empty the stands as quickly as fans manage on their own. There are simply too many variables.
Yet leave each slob to himself, and he’ll be opening the door to his Chevy before the scoreboard lights are cool. He may not realize that he’s “exhibiting large-scale adaptive intelligence in the absence of central direction,” as behavioral mathematician Art De Vany puts it, but he is. Even New York Jets fans can do it.
Stanford biologist Deborah Gordon spent years studying a large ant colony in Arizona’s desert. Her goal was to discover how these thousands of creatures coordinate their work so that essential tasks get done. No one ant or group of ants has any idea of the complexity of the entire colony. So who’s running the show?
The answer is nobody. Each colony “operates without any central or hierarchical control,” Ms. Gordon reports. “No insect issues commands to another.” These complex societies are built on countless simple decisions made by individual ants responding to local needs. These micro-decisions meld together to yield a highly efficient macro-result. This pattern of complex problems being solved by small actors working without direction is, Ms. Gordon states, “ubiquitous throughout nature.”
Emptying stadiums and running ant colonies are simple compared with questions of how our economy should be structured or which schools our children should attend. How can smart people imagine that an imperial class ensconced in Washington can decide such matters better than people on the ground?
My intrepid Mercatus Center colleague, Veronique de Rugy – inspired by the research of Liya Palagashvili and Jonathan Wolfson – makes the case for portable benefits for workers. Here’s Vero’s conclusion:
This is the real pro-worker agenda: acknowledging and supporting the changing nature of work, rather than clinging to a decades-old model that no longer serves many Americans. Let’s ditch the idea that only one way of working is “valid” and instead explore how to expand freedom and prosperity for all. Three cheers for portable benefits!
Reuven Brenner points out “the trouble with aggregates.”
As he praises the reticence of Calvin Coolidge, George Will counsels patience in this time of political nuttiness. Four slices:
Now, I have two points I want to make tonight about Calvin Coolidge that are very germane to our current conditions. First, he is the opposite of what we’ve come to accept as normal: the rhetorical presidency. And second, this man known for his reticence gave one of the half dozen best speeches ever given by an American president, a speech that, if adhered to, if taken seriously, would be the decisive antidote to wokeness.
First, about the rhetorical presidency. Somewhere in this club where we are tonight, there is a portrait of Theodore Roosevelt. The club is very proud of the fact that he used to do some of his political planning and plotting here. I’m not sure I’d advertise that, but that’s just me.
Roosevelt was the first president regularly filmed, the harbinger of the age of mass communication. Prior to him, and most especially prior to the root of all evil—I refer, of course, to Woodrow Wilson—most presidential communication was written and addressed to the legislative branch. It was in writing, where you do deliberative reasoning, that presidents addressed those who exist to give us mediated democracy, “to refine and enlarge the public views,” in James Madison’s words.
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All this began to change with Woodrow Wilson, acting under the theory that there could be no such thing as too much Woodrow Wilson. He decided to deliver the State of the Union address in person. Thomas Jefferson had stopped that. He thought it was monarchical to stand above the legislature and declaim. Besides, he did not like the sound of his voice, which made him an unusual politician.
Wilson started the spectacle that has now become the grotesque State of the Union circus that we see every year. That is because the modern rhetorical presidency wants to lead and shape and mold public opinion. I will remind you that the word leader or leaders appears fourteen times in the Federalist Papers, thirteen times as a disparagement and once as referring to the leaders of the Revolution.
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The American people are not angry with one another; the American people are exhausted and embarrassed by our public life. They have been severed from the finality that Coolidge detected in the Declaration. “If all men are created equal, that is final,” he said. “If they are endowed with inalienable rights, that is final…. No advance, no progress can be made beyond these propositions.” And he said, “About the Declaration there is a finality that is exceedingly restful.”
Here is why this matters, and why it is the key to ending the nonsense about wokeness and the culture wars that have convulsed our country.
If there is a fixed human nature, then there are natural rights, rights essential to the flourishing of people with this nature. But if, as the progressives tell us, human nature is a fiction, a premodern superstition; if human beings are infinitely malleable; if they are merely creatures that take the impress of whatever culture they find themselves situated in—if that is the case, then control of the culture is everything. Politics suddenly acquires an illimitable jurisdiction. Politics must be everything and everywhere because it is shaping the malleable human creatures.
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We saw how unlimited this can be when the Biden administration, using the CDC, the FBI, and other federal agencies, pressured social media to curate the nation’s consciousness. The Biden administration’s consciousness project aimed to protect the American people from inconvenient thoughts, many of them about the pandemic, many of them true, as we now know. This is what happens when, as progressives believe, history is a proper noun like France—capital-H History, with the arc of History bending toward this or that. We can blame Marx for that, or we can blame Hegel for Marx. But the real winner in all this is Lenin, Wilson’s contemporary almost exactly, and I daresay Wilson’s soulmate. I will paraphrase what Lenin said: We need in politics a vanguard of the enlightened that will drag people along, however reluctant they are, to a higher consciousness. We will purge them of false consciousness.
So far as I can tell, that is exactly what progressives are doing in their woke campaigns—purging us of what they consider false consciousness. The result in national politics is the surveillance state of China. On a smaller scale, it is the average American campus these days, and this is driven by the vaulting ambition that you have in politics when you cut yourself off from the finalities that Coolidge talked about.
