The folks at Unleash Prosperity share a chart that shows that Japanese industrial policy – which we Americans a few decades ago were warned by oh so very many pundits, professors, and politicians left, right, and center would propel Japan’s economy to great heights and leave America’s in the dust – was a curse to the Japanese people. [DBx: “MSCI” is an acronym for “Morgan Stanley Capital International” – an index of equity values.]
Speaking of the economic inefficiencies of state-directed enterprises, the New York Times reports that such inefficiencies are real in today’s China. (HT Scott Lincicome) A slice:
Absent from the top of China’s E.V. rankings are four state-owned automakers with ties to China’s national government: FAW Group, Dongfeng Motor, Changan Automobile and the GAC Group. The government-owned giants are strong in internal combustion engines but weak in electric cars.
Beijing is struggling to contain the industry’s overall capacity in part because the state-owned companies refuse to shrink to offset the growth of the private companies making so many electric and hybrid vehicles. Closing state-owned factories that make gasoline-powered cars and laying off their workers is politically difficult, especially in a high-profile industry like automobiles.
GMU Econ alum Dominic Pino is correct:
Trump’s nominee for the Federal Reserve Board of Governors, Stephen Miran, has said he will remain as the chairman of the Council of Economic Advisers if he is confirmed as a Fed governor. This is disqualifying.
Alvaro Vargas Llosa decries what is becoming of the United States. A slice:
As a native Peruvian who has spent more than three decades writing about Latin American economics and politics, I’m familiar with heavy-handed politicians exerting control over private businesses.
Never in my wildest nightmares, however, could I have imagined that the United States would follow suit: going from the big-government, tax-and-spend, woke Democrats to a command economy of sorts under the supposedly free-market Republicans. Yet, that is what President Donald Trump’s recent actions unequivocally represent.
The White House strong-armed chipmakers Nvidia and AMD into giving the U.S. government 15 percent of the money obtained from selling chips in China. It was either that or saying goodbye to any hope of getting an export license.
The Administration is trying to mitigate the pain caused by Chinese retaliation to the President’s tariffs. The U.S. has long been China’s top soybean supplier. But “China has contracted with Brazil to meet future months’ needs to avoid purchasing any soybeans from the United States,” the American Soybean Association said in a letter to the President last month.
Soybean “prices continue to drop and at the same time our farmers are paying significantly more for inputs and equipment” thanks to the Trump tariffs,” the letter says. As a result, “soybean farmers are under extreme financial stress” and “cannot survive a prolonged trade dispute with our largest customers.” The best solution is to roll back the tariffs.
Instead, the Administration is trying to make refiners—some located in the swing states of Pennsylvania and Michigan—and drivers subsidize farmers and biofuel producers. One bad policy turn begets another.
Neal McCluskey laments the continued survival of the U.S. Department of “Education.”
