But corporate greed or price gouging has never been a plausible theory of price changes, let alone inflation. Corporations with substantive market power don’t need pretext. They can always extract high prices by artificially limiting supply. And firms without market power that try to pocket a windfall invite undercutting by rivals; that’s especially true of hypercompetitive retail gas stations. When prices rise simultaneously across an entire industry—nay, across the entire world—the far simpler explanation is either a demand shock or a common cost shock—precisely the sort a war-driven supply shock produces. Consumers have to be willing and able to pay the higher prices, after all.
A lot of politicians around the world seem to get upset if prices for retail gas spike on inventory that was acquired at lower cost. They regard that as unfair “gouging.” Few of them, I suspect, insist on selling their homes for the price they paid for them. But fundamentally, this misunderstands the role of market prices, which reflect the relevant scarcity of the products in each new context. The opportunity cost for firms of selling oil below what the market will bear today is the price that could be obtained elsewhere in the world. Firms also need to replace inventory at the new market price. So, yes, they might make a short-term accounting profit on some inventory, but this is quite transitory.
Timothy Taylor shares insights from Richard Baldwin’s new monograph, World War Trade. Two slices:
We have been living through the silly season of Trump’s tariff policy for some months now. Baldwin lays out the details: here’s my own summary. The Trump administration has made innumerable announcements about tariff policy, and you will be stunned to learn that every single one of them is a greater triumph than the one before, natch. High announced tariffs? A triumph. Announcing an agreement that would reduce those tariffs? Another triumph. Creating exceptions and loopholes in the lower tariffs to ease the pain on US consumers and on US firms importing inputs to production? Yet another triumph. Announcing a new round of high tariffs? One more triumph. A new tariff policy has a completely different reason than the previous tariff policy? Yet another triumph of statesmanship. Indeed, every time a previous tariff policy is changed, or even abolished, it simply demonstrates that all previous tariff policies were triumphs. Then the US Supreme Court ruled that most of the tariffs imposed since April 2, 2025, were all unconstitutional to begin with. And President Trump reacted by imposing yet another round of tariffs with another pretextual legal rationale.
As US manufacturing firms struggle to deal with higher prices and cutoffs and heightened uncertainty of their global supply chains for inputs, and US consumers face higher prices as a result of tariffs, what’s the rest of the world doing? Baldwin argues persuasively that other nations of the world are pursuing regional free-trade agreements that pointedly leave out the United States–so that US firms have no voice in the negotiations. Baldwin calls it the “domino theory of regionalism,” which is the idea that regional free trade agreements benefit those who are inside, and thus disadvantage those who are outside. Every time an outsider decides to join up, it’s one more domino falling into place.
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Baldwin writes of Trump’s “Liberation Day” tariffs announced on April 2, 2025: “Donald Trump’s Rose Garden tariffs were historic in the most disruptive sense of the word. By raising tariffs on almost everything from almost every nation, he broke most of the trade promises America had ever made.” That epic level of promise-breaking will echo into the future of US diplomacy on all subjects.
Alan Beattie compares Tariff Man to Nixon. Two slices:
Donald Trump came into office as the self-styled “Tariff Man” superhero who would tear apart global trade and refashion it under the muscular doctrine of America First. He seems likely instead to be remembered as the supervillain “Epic Fury”, who set the Middle East ablaze and endangered worldwide prosperity and the US’s standing with it.
A year on from his supposed “liberation day”, which imposed sweeping tariffs across the board, Trump has certainly delivered a rupture from the multilateral system which came before. But rather than regressing to the protectionism of the 1930s — not least because other countries have declined to join in — he seems to have stumbled back only to the early years of President Richard Nixon.
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Two Republican presidents who started with a somewhat similar attitude to trade both hit the real-world limits of fighting a trade war. Yet it’s revealing how toxic the US attitude to trade has become that the 1970s original shifted towards liberalisation bounded by agreements, while the 2020s redux continues to regard open and rules-based trade with unremitting hostility. It’s not often that historians look back to Nixon’s presidency with nostalgia, but his legacy seems like a golden era of multilateral openness compared with the destructive economic nationalism of Trump.
James Pethokoukis tweets this line from this report in The Economist:
‘Here is an uncomfortable truth for hand-wringing policymakers: Europe’s dependency on America is in no small part Europe’s own fault. Decades of over-regulating the old continent’s economy left businesses there unable to compete with American firms’
America, Eberstadt says, has had “the most robust demographic growth of any developed society.” The Social Security Administration, predicting what it must desperately desire, projects another 100 million Americans by 2100. But intractable pathologies — including government’s fiscal incontinence and “pay-as-you-go entitlements” — spell catastrophe for a nation with an upside-down “population pyramid,” where each generation is smaller than the previous one.
“Who is Hasan Piker?” – Jim Geraghty has the unattractive answer.
Also writing about Comrade Piker and his ethically challenged ilk is Reason‘s Robby Soave. A slice:
Stealing is bad, and you shouldn’t do it. It’s really as simple as that. Children understand this, even from a young age, and it’s taught to them by their parents, grandparents, teachers, and other mentors. Some people, of course, find themselves in desperate circumstances, and are forced to steal to survive. We may empathize with them, and we may even decide that their situation mitigates the blameworthiness of the offense. That doesn’t change the wrongness of stealing, though. If you catch your kids snatching a candy bar from the grocery store checkout line, you invariably punish them. You don’t commend them for striking a blow against capitalist oppression.
Enter leftists Hasan Piker and Jia Tolentino, who have been roundly and deservedly mocked on social media after participating in a podcast interview for The New York Times titled “The Rich Don’t Play By the Rules. So Why Should I?” Already, we are on shaky ground here, since the headline—a direct quote from host Nadja Spiegelman—positions Piker, Tolentino, and Spiegelman as a trio of people that should be contrasted with the rich. This is ridiculous: All three are members of the wealthy, successful, cultural elite. Spiegelman is a culture editor for the Times, an author, a cartoonist, and the daughter of legendary cartoonist Art Spiegelman (creator of Maus, a well-known graphic novel about the Holocaust). Tolentino is a relatively famous feminist writer of not-exactly modest means. Piker is a wildly successful far-left Twitch streamer and nephew of The Young Turks‘ Cenk Uygur, who gave him his start. Suffice it to say, these are not people who need to steal to survive.
And yet, their conversation includes a full-throated defense of shoplifting.
