Channeling his inner Humpty Dumpty (“‘When I use a word,’ Humpty Dumpty said in a rather scornful tone, ‘it means just what I choose it to mean — nothing more nor less’”), Donald Trump has decided that this hypothetical fentanyl from Venezuela might be a “chemical weapon” (like mustard gas or sarin?). An odd one, that Americans pay for and ingest.
If the boats are, as U.S. intelligence sources supposedly know, carrying drugs (intelligence sources knew Iraq’s weapons of mass destruction existed), they are pulled to America by the demand for drugs by Americans who poison themselves. The national tragedy of 80,000 U.S. fatal overdoses last year is not ameliorated by, it is deepened by, terminological obfuscations that erase the agency of drug users.
The president says each boat strike prevents 25,000 overdose deaths. Reason’s Jacob Sullum says this means he already has saved 350,000 lives, six times the number of U.S. lives lost in Vietnam. But, then, Attorney General Pam Bondi has said that in his first 100 days in office, Donald Trump saved “258 million lives” (75 percent of the U.S. population) by intercepting fentanyl shipments.
The U.S. Coast Guard specializes in at-sea interdictions. And using Reaper drones and Hellfire missiles against boats is (as a former U.S. ambassador to Venezuela told the Economist) like “trying to cook an egg with a blowtorch.” One wonders: Is this what U.S. pilots and drone operators enlisted to do?
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Secretary of State Marco Rubio is puzzled: “We have deployed U.S. assets and interests all over the planet, but when we do it in our own hemisphere … everyone sort of freaks out.” (“Freaks out.” Imagine such teenager-talk from other secretaries of state — say, John Quincy Adams or Dean Acheson.) What is the antecedent of Rubio’s pronoun “it”? Deploying “assets and interests”? Hardly “everyone,” but some people have questions about activities antiseptically described as “lethal kinetic strikes.”
The winner of this year’s Nobel Peace Prize has written a thoughtful and important “Freedom Manifesto” that she plans to publish on Tuesday and shared with us first. In it, she argues that the freedoms of speech and assembly, as well the right to vote securely and without any form of manipulation, must be inviolable. Machado puts particular emphasis on the need to protect property ownership as a fundamental right.
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It only took one generation for socialism to ruin Venezuela and impoverish most of its people. The damage caused by Maduro and Hugo Chávez before him won’t be quickly undone, but it’s possible. Machado envisions Venezuela becoming “a pillar of democratic and energy security in the western hemisphere, and the unwavering promoter of liberty around the world.” Of course, there’s no guarantee that a post-Maduro Venezuela immediately becomes a thriving, free-market democracy, but we commend Machado for imagining a better future for Venezuelans to rally around.
When it comes to economic policy, Donald Trump is a statist menace. Full stop.
His obsession with tariffs isn’t grounded in just classic protectionist aid to domestic industries, but actually embodies a much grander and more dangerous Caesarian notion: Namely, that America is a giant corporation and Trump its all-powerful CEO, empowered to gallop around the globe cutting great big beautiful deals to bring investment, jobs, production, societal uplift and foreign policy victories, too, pouring into America’s hinterlands.
In that context, the Donald has tortured the nation’s poorly drafted trade statutes into economic battering rams, thereby enabling him to deploy tariffs for any purpose that suits his momentary fancy.
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Meanwhile, Trump’s claim that Ontario’s ad was a fraud because Ronald Reagan loved tariffs, too, is truly preposterous. The Gipper, for whom I worked as Director of the Office of Management and Budget from 1981–1985, was a true-blue believer in free markets and would have never dreamed of storming around the globe making ad hoc economic deals while sliding by the seat of his pants. President Reagan believed that government was the problem, not the solution, and that its main job was to get out of the way to the maximum extent possible so that businesses and entrepreneurs operating on the free market could take care of investment, job creation, and the resulting rise in societal wealth.
Yes, he deviated from strict free trade a few times, but I know from personal experience that it wasn’t because he thought tariffs, quotas, or other protectionist measures would help. In the case of the largest deviation from free trade — the 1.68 million cap on Japanese auto imports — President Reagan got flat-out tricked.
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At the end of the day, Ronald Reagan would have abhorred the entire Trumpian TariffPalooza. That’s because he knew that in a free economy, the job of the President is to keep the Leviathan on the Potomac at bay, not usurp the jobs, income, and wealth-creating function of free men on free markets.
When President Donald Trump ordered a whopping 39 percent tariff on all imports from Switzerland earlier this year, he did so, of course, by claiming there was a national emergency.
Officially, Trump’s executive order pointed to “large and persistent annual U.S. goods trade deficits” that, the president claims, “constitute an unusual and extraordinary threat to the national security and economy of the United States.” Because this was part of Trump’s push for what he called “reciprocal” tariffs, the executive order also pointed toward “foreign trading partners’ disparate tariff rates” that were supposedly to blame for the trade imbalance.
Right from the start, that didn’t make a whole lot of sense.
For one, Switzerland had minuscule tariffs (an average rate of 0.2 percent) on American imports. As I pointed out at the time, if Trump were seeking “reciprocal” tariffs with the Swiss, he would have to lower America’s tariffs rather than raise them.
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Cynical observers might note that Trump’s decision to reduce the tariffs on Swiss goods came just days after a Swiss delegation lavished the president with a variety of expensive gifts. Trump reportedly received a gold Rolex watch and an engraved gold bar estimated to be worth $130,000. It is illegal for U.S. presidents to accept gifts worth more than $480, but the White House says Trump accepted the gifts on behalf of his presidential library, which likely makes them legal.
It wouldn’t be the first time Trump responded favorably after receiving some luxurious enticements. In August, Trump granted Apple a special exemption from huge tariffs targeting high-end computer chips made in other countries just days after Apple CEO Tim Cook made a special trip to the White House and left behind a 24-karat gold tchotchke for the president.
The coffee tariffs are a function of the president’s abiding belief that tariffs are, by definition, good. It is true that they generate revenue — taxes tend to do that — but at the cost of higher prices for consumers. The administration has been at pains to deny the latter part of that equation, but, under pressure to do something about prices after the Democratic victories in the off-year elections, it is now admitting the obvious.
Previewing the tariff relief on food on Fox News the other day, Treasury Secretary Scott Bessent said it would come regarding commodities we don’t grow in the United States, “coffee being one of them. Bananas, other fruits, things like that. So that will bring the prices down very quickly.”
The grocers are pleased. “Today’s action should help consumers, whose morning cup of coffee will hopefully become more affordable, as well as U.S. manufacturers, which utilize many of these products in their supply chains and production lines,” the head of an industry group observed when the move was announced.
It would behoove the administration to apply this logic more broadly. By one estimate, tariffs are costing the average American household roughly $1,800 this year, while more than half of tariffed goods are used to make products here in the United States. It is true that China — a predatory power hostile to the U.S. — is a special case and that threatening tariffs can be a way to gain leverage in negotiations, but arguably Trump’s most significant economic initiative has been to increase prices on consumers after winning a campaign on the promise that he’d lower them.
Corporate CEOs are keeping their heads down these days, lest they get chopped off by the Trump Administration. So last week’s remarks by Ford Motor CEO Jim Farley deserve credit for candor, as well as for the public service of telling politicians a hard truth about the American labor force.
Mr. Farley told a podcast last week that he can’t find enough skilled mechanics to run his auto plants. Specifically, Ford can’t fill 5,000 mechanic jobs that pay $120,000 a year.
“We are in trouble in our country. We are not talking about this enough,” Mr. Farley said. “We have over a million openings in critical jobs, emergency services, trucking, factory workers, plumbers, electricians and tradesmen.” He said Ford is struggling to hire mechanics at salaries that Ivy League grads might envy.
“A bay with a lift and tools and no one to work in it—are you kidding me? Nope,” Mr. Farley lamented. “We do not have trade schools” in this country. He’s right to a large degree. Few high schools teach trades these days. Community colleges are mostly remedial high school education, and government worker-training programs have poor results.
Government subsidies for college and graduate education have encouraged the young to go to college even though they might be better off learning a trade. This has created a skills mismatch in the labor market. Unemployment among young college grads is increasing, while employers struggle to hire skilled manufacturing workers, technicians and contractors.
My Mercatus Center colleague Satya Marar reveals “the many tradeoffs of Trump’s ‘Fat Shot’ deal.”
“You Asked for It, Brother! . . . And now you’re getting it good and hard!”
Socialism is in vogue again. Critics of capitalism call the market economy unfair, arguing that big corporations don’t pay low-income employees a living wage. They draw on studies showing that inequality has grown dramatically in both income and wealth. Their solution: a highly progressive income tax, or even a wealth tax, on the superrich, and a minimum wage of $20 an hour or more.
These economically destructive measures are unnecessary and would disrupt the positive changes happening in capital-labor relations. The private sector is quietly solving the inequality problem without more redistribution and wage controls.
How? Companies both large and small offer generous profit-sharing programs for employees—401(k) plans, stock options and discounted stock-purchase plans.
