Owning a vineyard in Napa Valley sounds fancy, but the wine business is, in reality, pretty gritty: It is a low-margin agricultural and food-processing business that is, on top of everything else, highly regulated. Now the Trump administration is threatening to make things a good deal worse by throwing a hand grenade into the U.S. wine industry’s supply chains and distribution networks in the form of tariffs that are meant, in theory, to protect domestic producers from overseas competition.
Unfortunately, the wine industry doesn’t work the way Washington seems to think it does.
…..
The protective tariff is the tax that eats itself. These excises are intended to generate revenue for the federal government and to protect domestic industries from foreign competition, but the more they do of one, the less they do of the other. If there is much revenue being generated, then demand for imports remains high and domestic competitors are not being effectively protected; if the tariff is high enough to discourage imports, then it produces less revenue (here, economist Arthur Laffer smiles) because there isn’t any tax collected on the sales that don’t happen.
What tariffs mainly accomplish, then, is to distort markets, disrupt supply chains and increase costs for businesses and consumers. And because the Trump administration changes its tariff targets from day-to-day — or even from hour-to-hour — it introduces more uncertainty into the marketplace, which is a problem for any business but an enormous problem for a business with a product-development cycle measured in decades.
Jim Bacchus encourages a reinvigoration of the W.T.O. [DBx: Selfishly as an American, I wish that other governments would indeed be more willing to hold their citizens’ hostage in order to pressure Trump into lowering U.S. tariffs. Were other governments to do so, they would, unlike Trump, truly put America first. Yet the Impartial Spectator counsels me against such a selfish wish. But the Impartial Spectator has nothing against wishing that the W.T.O.’s dispute-resolution mechanism be reinvigorated.]
The bipartisan obsession with all things “made in America” has been met with staunch support on both sides of the aisle. The political left and right have formed a horseshoe, both embracing government intervention as the way forward. Senator Bernie Sanders supports the current US administration in its pursuit of a stake in Intel: “if microchip companies make a profit from the generous grants they receive from the federal government, the taxpayers of America have a right to a reasonable return on that investment.” Across the now-invisible partisan aisle, President Donald Trump states, “I negotiated this Deal with Lip-Bu Tan, the Highly Respected Chief Executive Officer of the Company. The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars. This is a great Deal for America and, also, a great Deal for INTEL.”
The irony is striking: a government $37 trillion in debt cannot balance its own books, yet plays venture capitalist with taxpayer money. Furthermore, if Intel was a true champion it would not need the full weight of the US government for support in an industry where it is clearly lagging behind its competition, Nvidia, the most valuable company in the world. The decision should not be how much to intervene in these companies, or the economy, but to not intervene at all.
…..
The federal government is not a venture capitalist that can afford to invest with borrowed dollars, and importing Washington politics to boardrooms will not make American firms competitive again. History teaches that when states place themselves at the center of economies, the result is coercion, corruption, and collapse. America’s strength has always been its entrepreneurs, not its politicians. As Ludwig von Mises warned in his 1944 Bureaucracy, “government is not a profit-seeking enterprise. The conduct of its affairs cannot be checked by profit-and-loss statements. Its achievement cannot be valued in terms of money.” When politicians direct capital, they do so without accountability to market signals, and the result is wasted resources. If this is truly the “golden age” the President claims, it looks far more like a Gilded Age — glittering on the surface, hollow beneath — just as Mark Twain warned more than a century ago. America doesn’t need a gilded age of government inside boardrooms; it needs a renewed age of independent entrepreneurship.
Senate Republicans look poised to confirm White House aide Stephen Miran to join the Federal Reserve Board of Governors as early as Monday, and the GOP might regret the precedent the next time there’s a Democratic President. Which there will be, maybe as soon as 2029.
The Senate is rushing Mr. Miran’s confirmation vote at President Trump’s request so the economist can attend this week’s meeting of the Federal Open Market Committee. The FOMC will decide whether to cut interest rates as much as Mr. Trump has demanded, despite persistent inflation above the Fed’s 2% target.
Mr. Miran has been nominated to fill the remaining term of former governor Adriana Kugler, who resigned Aug. 8. Her unexpired term ends on Jan. 31, 2026.
It’s nonetheless extraordinary that Mr. Miran has said that when that term ends, he will return to his position as Chair of the White House Council of Economic Advisers. Mr. Miran has declined to resign from the White House and instead is taking what he calls an unpaid leave of absence. This means that he will essentially still be a key White House economic adviser even as he is serving at the Fed.
He won’t be “independent” in any fair definition of the word. If Mr. Miran votes on the FOMC in a way Mr. Trump dislikes, he will put his job in the White House at risk. If confirmed he would only be a single vote among 12 on the current FOMC, but everyone knows he will be speaking for, and answering to, the President.
In my widely-unread book [Unchecked and Unbalanced], I point out that disempowerment of citizens has taken place at the national level as well. When there were just 13 states, the population was 4 million and the House of Representatives had 65 members, or about 60,000 people per legislator. Today, we have 340 million people, with 435 legislators, or an average of 800,000 people per legislator.
Citizens who feel that they are powerless in today’s “democracy” are correct. Legislators also feel powerless, because government budgets are so large and complex that no one understand them, but that is another issue.
If we could design a system for today’s United States, I would want to distribute much more power to localities. Countries like Switzerland, Singapore, and Norway show that you can have adequate state capacity at a scale of less than 20 million people.
George Will reflects wisely on Willam F. Buckley and Charlie Kirk. Two slices:
Only humans have politics, for two reasons: We are opinionated, and we are egotistical. We think our opinions are preferable to others’ opinions. Hence the primary purpose and challenge of politics is to keep the peace among such creatures living together.
Many visionary nuisances think that keeping the peace is a contemptibly modest, even banal purpose for politics. They believe that social peace — living together congenially — is not merely overrated, it is evidence of bad character: too little passion for perfecting the world. Sacrificing social peace is, they think, an inevitable price worth paying for a politics with properly elevated ambitions, including the suppression of those whose opinions and egotism are impediments to politically driven progress.
…..
Kirk, like Buckley, was a teacher unconfined to a classroom. Anyone is such who argues for a living — who by welcoming interlocutors pays them the compliment of acknowledging the kinship of all serious users of language. It is horrific that nowadays this can be fatal.
Steven Koonin celebrates the long-delayed “clarity on climate.” A slice:
There is a disconnect between public perceptions of climate change and climate science—and between past government reports and the science itself. Energy Secretary Chris Wright understands this. It’s why he commissioned an independent assessment by a team of five senior scientists, including me, to provide clearer insights into what’s known and not about the changing climate.
Collectively, our team brought to the task more than 200 years of research experience, almost all directly relevant to climate studies. The resulting peer-reviewed report is entirely our work, free from political influence—a departure from previous assessments. It draws from United Nations and U.S. climate reports, peer-reviewed research, and primary observations to focus on important aspects of climate science that have been misrepresented to nonexperts.
Among the report’s key findings:
• Elevated carbon-dioxide levels enhance plant growth, contributing to global greening and increased agricultural productivity.
• Complex climate models provide limited guidance on the climate’s response to rising carbon-dioxide levels. Overly sensitive models, often using extreme scenarios, have exaggerated future warming projections and consequences.
• Data aggregated over the continental U.S. show no significant long-term trends in most extreme weather events. Claims of more frequent or intense hurricanes, tornadoes, floods and dryness in America aren’t supported by historical records.
• While global sea levels have risen about 8 inches since 1900, aggregate U.S. tide-gauge data don’t show the long-term acceleration expected from a warming globe.
• Natural climate variability, data limitations and model deficiencies complicate efforts to attribute specific climate changes or extreme events to human CO2 emissions.
