Scott Lincicome, sharing his latest Capitolism column, ponders what is likely forthcoming in 2026. A slice:
Last year, I skeptically asked whether 2025 would be the year that “Bidenomics” industrial subsidies would combine with Trump 2.0 tax and deregulatory moves to help American manufacturing get its groove back. The answer through December—even acknowledging that sagging factory employment is a poor indicator of the industry’s overall health—has been a resounding “nope.”
Many of the reasons for the sector’s continued doldrums come right out of previous Capitolism editions (and Econ 101 textbooks). Discrete industrial policy wins have been costly, prematurely celebrated, and offset by losses elsewhere in the U.S. economy (owed in part to the inherent uncertainty baked into a system dictated by politics and elections rather than markets). Trump’s blanket and byzantine tariffs, meanwhile, have helped some U.S. manufacturers but saddled far more—especially small and medium-sized firms—with higher production costs, increased compliance burdens, and diminished global competitiveness. And any modest tariff benefits have been further muted by the uniquely erratic and complex nature of Trump’s unilateral levies. Indiscriminate deportations and new U.S. immigration restrictions are also causing problems by tempering demand and by straining an industrial labor market that was already struggling to find warm bodies. Overall, it’s a recipe for not the immediate boom the administration promised last spring but continued manufacturing stagnation. And that’s basically what we got.
Josh Blackman decries the Heritage Foundation’s self-destruction. Two slices:
Rome didn’t fall in a day, and Heritage didn’t fall in a tweet. Kevin Roberts’s bungling defense of Tucker Carlson might have triggered the mass resignation of scholars from what was once America’s leading conservative think tank, but this exodus was years in the making. The Heritage Foundation made a strategic choice to adapt to the current political moment by refusing to exclude anyone from its boundless tent. That led Heritage to depart from its principles and embrace people who have no credible claim to conservatism, even at the expense of pushing out the brains that built the foundation. By obsessing over “what time it is,” Heritage lost sight of hard lessons learned from the past.
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Mr. Roberts’s infamous video was most sharply criticized for invoking antisemitic tropes such as “venomous coalition” and “globalist class.” The deeper problem with his message was its neglect for the integrity of the institution Mr. Roberts leads. He declared unconditional fealty to Tucker Carlson, who he said “always will be a close friend of the Heritage Foundation.” He defended Mr. Carlson’s softball interview with Nick Fuentes, a fringe figure who has denied the Holocaust. And Mr. Roberts said he wouldn’t be “attacking our friends on the right” or “canceling our own people,” referring respectively to Messrs. Carlson and Fuentes.
But the Heritage Foundation has no power to cancel anyone. All it can do is protect its own integrity by declining to associate with unsavory figures like Mr. Fuentes. That’s what National Review editor William F. Buckley did in 1962, when he denounced John Birch Society leader Robert Welch who claimed, among other things, that Dwight Eisenhower was a communist, and whose organization disseminated antisemitic propaganda even while professing to oppose antisemitism.
I agree with Ben Shapiro’s message to Mr. Roberts: “If Heritage Foundation wishes to retain its status as a leading thought institution in the conservative movement, it must act as ideological border control.” Because it failed to do so, scholars are self-deporting. What time is it? Too late to save the Heritage Foundation.
Wall Street Journal columnist Jason Riley wonders what is the difference between socialists and some modern American Democrats – or, perhaps also, some modern American Republicans. Here’s his conclusion:
As the midterm elections approach, Republican officials would like nothing better than to make Gotham’s mayor the face of the Democratic Party, but their digs at Mr. Mamdani’s socialism would have more credibility if they weren’t giving the Trump administration a free pass. According to the Tax Foundation, Mr. Trump’s tariffs amount to the largest U.S. tax increase as a percentage of gross domestic product since 1993. And it’s hard to seem credible knocking proposals for government-run grocery stores to control food prices when you support government-run pharmacies to control drug prices.
Give democratic socialist Zohran Mamdani credit for practicing something rare among elected officials: truth in advertising.
“It is for that reason, and much more, that I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it,” Trump declared. “People live in homes, not corporations.”
He’s correct on that last point, at least. People do live in homes — and corporate ownership of said homes does not change that fact. The reason that institutional investors purchase single-family homes is not to give shareholders extra vacation options. Corporations don’t keep houses sitting around empty, simply waiting for them to appreciate. They rent them out to people.
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Banning institutional investors from buying single-family homes is such an appealing answer to tight housing markets because it’s easy and imposes no clear cost on voters, but it would do nothing to help struggling prospective homeowners. It would merely punish a small segment of renters who benefit from the options that large investors provide, while raising rents slightly for everyone else by decreasing overall supply.
Perhaps worst of all, it would distract from the real solutions that the U.S. housing market desperately needs: breaking down state and local barriers to new construction, such as exclusionary zoning laws, overly stringent building codes, and byzantine permitting processes. If Trump truly wants to expand housing availability, he should seek to liberate the businesses that provide it, not banish a disfavored few of them from the marketplace.
Vance Ginn explains why California is bleeding tech jobs.
The Editorial Board of the Washington Post is correct: “America doesn’t need Venezuelan oil.” A slice:
But if “No Blood for Oil” was dubious then, it’s nonsensical now. The oil industry has transformed in the intervening quarter-century, making Venezuela’s oil less necessary and less attractive, especially for the U.S.
New technologies like shale oil have greatly boosted production. In 2002, the world pumped 65.8 million barrels of crude oil per day. In 2024, it produced 76.6 million. Electrification, especially of automobiles, also means it takes less oil to power advanced economies. That combination keeps prices in check so well that the once-mighty OPEC cartel has given up restricting production and started fantasizing about driving producers of shale oil out of business by flooding the market with cheap crude.
The leader of the shale revolution has been the U.S., which went from being the world’s biggest net importer of oil — 11 million barrels per day in March 2003 — to one of its leading exporters. America now produces more oil domestically than any other country. While U.S. consumers might benefit from greater supply on the global market, American producers would not.
Rachel Lomasky makes the case that “Hayek’s Complexity Theory can provide essential frameworks for understanding the emergent systems we are building with LLMs, enabling us to solve novel, challenging problems that neither humans nor computers could address alone.” (HT Arnold Kling)
