Trump’s furniture tariffs won’t enhance national security; the U.S. doesn’t need to produce desks to defend itself. What they will do is further increase the cost of imported furniture and the cost of living for Americans. To the extent furniture tariffs succeed in reversing the industry’s downward trend, they will do so at the expense of American families and the misallocation of the country’s resources to less productive uses.
Scott Lincicome reflects on the socialization of Intel. Three slices:
The most obvious and immediate problems with the Intel deal rest with the company itself, which—despite all those subsidies—has struggled even more since we dug into its many longstanding problems a year ago and briefly reviewed its current situation in July.
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Since then, the Wall Street Journal’s behind-the-scenes tick-tock of the events leading up to the announcement confirmed that the 5 percent bump provision was forced on Intel to “dissuade the company from fully exiting the manufacturing segment.” The report also revealed that Intel’s “panicked” board of directors was effectively coerced into the deal because of Trump’s CEO threats, in a scene right out of The Sopranos: “In return for Trump’s support [for Intel’s CEO], the administration proposed taking an equity stake in the company.”
Nice company you have there …
This pressure, of course, came before the U.S. government had an actual stake in the company—and thus in its success (or failure). It’d be downright foolish to think the Trump administration’s leverage (and incentive/willingness to use it) won’t be even stronger now that Washington owns a big chunk of the company and Trump has put his own “businessman dealmaker” reputation on the line. No surprise, then, that Intel explained in a brand new SEC filing on the equity deal that the government’s stake “reduces the voting and other governance rights of stockholders and may limit potential future transactions that may be beneficial to stockholders.” It also says the government may vote “as it wishes” (and against the board) under certain express conditions, including if Intel ever tried to change or terminate “the Company’s or its subsidiaries’ relationship with the US Government.”
In other words, yes, Trump and the rest of the federal government will have influence and may even call some shots—at shareholders’ and/or Intel’s expense.
That incentive gets to the next clear problem that the equity stake raises: the potential to distort other U.S. companies and industries.
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Then there are the potential harms for Intel’s possible customers, who may suddenly look to buy from the company—not because it makes the best products but “to curry favor with or avoid being targeted by an administration that has a direct financial and political interest in Intel’s financial success.” This risk also appears to be materializing already: Minutes after I wrote my op-ed, we learned that Samsung was reportedly “exploring partnerships with American companies to ‘please’ the Trump administration and ensure that its regional operations aren’t affected by hefty tariffs.” And this “exploration” included “a deal with Intel [that] would allow the Korean giant to see an elevated status in the eyes of President Trump, mainly since Intel has become an important factor for the current US administration.”
George Will is correct: Policies aimed at artificially increasing student enrollments in college are harmful. [DBx: These policies enrich me and other college professors; our salaries are higher, and our workloads are easier, than these would otherwise be. Thank you very, very much! But these policies, in both monetary and non-monetary ways, unjustly harm most other Americans.] A slice from Will’s column:
Economist Arnold Kling says that despite the limited “natural demand” for college education (“students who are excited by academic subjects”), graduate schools continue to churn out more PhDs (almost 60,000 in 2022) than the growth of undergraduate enrollment justifies. So, artificial student demand must be stimulated. Kling says “colleges adapt by offering dumbed-down courses and grade inflation.
And by teachers teaching less. Hess and Richard B. Keck, also of AEI, say light teaching loads have become badges of professional status — and require schools to rely on teaching by graduate students or part-time adjunct instructors. Tenured or tenure-track professors teach less and less. Most are on nine-month contracts requiring them to teach 13 weeks in each semester, or 26 weeks of the approximately 40 covered by the contracts — often about 15 hours a week each semester.
Congress is subject to a simple, macroeconomic constraint: All government outlays, including interest payments, must ultimately be financed by some combination of taxes, borrowing or monetary policy. When interest payments rise, the burden will be carried somewhere. If Congress won’t collect more tax revenue or exercise more spending and borrowing restraint, that leaves monetary policy, which means suppressing interest rates or tolerating higher inflation to erode the real value of our debt.
So, those who only care about Trump’s public browbeating of Fed Chair Jerome Powell miss the most crucial point: The pressure on the Fed will continue to exist no matter who occupies the Oval Office thanks to the fiscal trajectory that was locked in years ago and Congress’ refusal to do anything about it.
I don’t blame Cracker Barrel for this sorry state of affairs. The company is a victim of the internet’s endless search for something to be mad about. During L’Affaire Sausage, I pointed out that very few people were actually mad that Cracker Barrel had added a meat substitute to its offerings; copy-hungry journalists had scoured the company’s Facebook page and plucked a few lunatics out of the much larger number of vegetarians thanking the company for catering to their needs. I reminded people that you can always find a few fringe souls on the internet who are angry about anything. I begged them to ignore the shouting, just as they would if people were doing it on a random street corner.
