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Mr. Freddie deBoer

Mr. DeBoer:

You brought admirable soundness of mind to the debate over covid restrictions. I wonder, therefore, why that soundness abandoned you in your recent broadside against ‘neoliberalism.’ In your October 7^th essay “They Still Won’t Say That They’re Sorry” you offer only self-righteous sermonizing amidst a mash-up of cherry-picked facts.

The foundational ‘fact’ on which your case against ‘neoliberalism’ rests is the allegation that “NAFTA and similar free trade agreements” caused America to deindustrialize. The evidence, however, that you offer to support this allegation fails. The fact that rates of fentanyl addiction, crime, and disability-payments are high in some American communities is indeed tragic, but these facts do not imply what you take them to imply – namely, that America has deindustrialized. Nor is deindustrialization implied by the data that you present showing that the absolute number of Americans working in manufacturing peaked in 1979.

Had you looked for direct evidence of American deindustrialization you wouldn’t have found it. The reason is that there has been no deindustrialization. America’s industrial capacity is today at an all-time high and 63 percent larger than it was when NAFTA first took effect in January 1994. And this capacity is being used: industrial output hit its all-time peak in September 2018 and is today only 0.9 percent off of that high. Note, by the way, that mid-2018 is when Trump’s tariffs were kicking into full effect; a case can be made that the slight decline in industrial output since then is a result of this retreat from free trade – that is, a result of a retreat from a policy that you assume, without sound evidence, to promote deindustrialization.

As for manufacturing employment, the relevant measure is not, contrary to your assumption, the absolute number of workers in manufacturing; rather, it’s the percentage of workers employed in manufacturing. Had you looked at the trend in this latter figure (shown here) you’d have discovered that the percentage of workers employed in manufacturing peaked in 1944 and has been steadily declining ever since, with no evident acceleration in this decline when NAFTA arrived, when China joined the WTO (in 2001), or when America began to run its still-unbroken string of annual trade deficits (in 1976).

Although tragic, the rise in fentanyl addiction, crime rates, “deaths of despair,” and many other problems in America cannot possibly have been caused by something – namely, deindustrialization – that never happened. And nor can, as you call it, “unfettered free trade” be blamed for this nonoccurrence.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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Jeremiah Johnson defends economic growth against its detractors on the left and right. Five slices:

Economic growth matters, and when we quantify it, we are not dealing with abstract numbers. Trends in things like GDP per capita point to real material progress, and almost every argument against pursuing GDP growth is wrong.

…..

Even so, neoliberal economists and technocrats do tend to spend a lot of time worrying about GDP growth specifically. That’s because GDP is highly correlated with nearly every other value you might care about. Do you care about life satisfaction? It’s strongly correlated with GDP. Measures as varied as infant mortality rates, day-to-day happiness, academic achievement, and human freedom are all correlated strongly with GDP. People in richer countries are safer from violence, have more leisure time, produce more beautiful art, and live longer, healthier lives than those in poorer countries. Recent data suggests the highest fertility rates in the United States are among very high-income families. GDP isn’t just a matter of having a better toaster or a larger TV. When GDP increases, so does nearly everything else we care about.

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Conservatives are concerned about the erosion of small-town America. Immigration is one of the few viable paths to revitalizing small towns: Haitians have revitalized Springfield, Ohio, and Somali immigration reversed the decline of Lewiston, Maine. But the conservative movement is more opposed to immigration than it has been in decades, and it offers no alternative vision of how to save towns like Lewiston.

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OF COURSE, ALL THIS TALK OF POLICY misses an important point. There are countries in the world right now whose societies are organized around different goods than the encompassing pursuit of GDP growth. Some may be poorer than their Western counterparts as a result, but they are richer in other ways—they respect tradition, perhaps, and have larger families and a more religious population, and their lifestyles are more communitarian. And yet there’s virtually no out-migration from America or Europe to live in those places. Instead, many citizens of those poorer countries feel called to leave their homes and emigrate to the richer countries. Revealed preference shows that when people are given a choice of where to live, they choose to go to the high-GDP countries with all their associated benefits.

…..

It’s easy to criticize GDP growth and list a variety of high-minded ideals that society should pursue instead. For thinkers on the New Right, the society-orienting formula usually offered as an alternative to GDP is the ‘Common Good’; they often refer to themselves as common good conservatives. But despite their love letters to community, courage, justice, tradition, families, small-town life, and middle-class values, they have no coherent plans to achieve any of their goals. It’s often not even clear what the goals are. What would more justice and courage and community look like in practice?

The reason there’s so little policy detail is that when you peel back the abstractions to look at the practical realities, what the New Right wants to achieve is almost universally unpopular. They want to return to a world where women have less autonomy and fewer reproductive rights. They believe people should stay where they’re born, and that America should close itself off from the world. They want to reverse decades of progress in the civil rights of black and LGBT folks. In general, they seem to pine for an imagined 1950s utopia that never actually existed. Some imagine that society went off the rails in the post-war era, while some seem to think the problem started around the fourteenth century. But they’re united in a belief that the old ways were better.

Jeff Yass and Steve Moore warn that “Kamala Harris is eyeing your 401(k).” Two slices:

Extracting money from those big and faceless corporations with profits in the tens of billions of dollars has populist appeal. But the more accurate way to think of the corporate income tax is that it puts Uncle Sam first in line to take a share of all the profits an American corporation earns. Only after the government takes its pound of flesh does anyone else get a return on his money.

At a 28% federal corporate tax and an average of roughly a 5% state and local tax, the government would snatch away roughly 33 cents of every dollar of profit. This leaves 67 cents to the shareholders. Those include the more than 100 million Americans who own stock directly or through pension and other retirement funds. Every percentage point that Congress and Ms. Harris raise the tax would dilute the value of the stock owned by the rest of us.

…..

It is a mathematical certainty that Ms. Harris’s tax scheme will lower the value of stocks a great deal. What we find troubling is that most investors who own as much as half of a company don’t vilify it as a “price gouger” or hassle them with inane and costly regulations. Ms. Harris would treat corporate America as a fat goose to be plucked, and the rest of us would pay the price.

Dan McLaughlin isn’t assured by Jonathan Chait’s assurances that Harris’s assault on the courts won’t imperil the rule of law. A slice:

Jonathan Chait, having committed himself to the notion that the Democratic ticket of Kamala Harris and Tim Walz are actually friends of constitutional democracy and the rule of written law, has to explain away the most menacing aspect of the authoritarian and lawless Harris record: her endorsement of the Biden Court-packing plan, coming as it does after she outright endorsed expanding the Supreme Court in 2019.

If this proposal came from the right (see the reaction to what Benjamin Netanyahu proposed to change Israel’s court system), Chait would be shrieking with alarm. But defend it he does, in an article titled “In Defense of the Biden-Harris Plan to Reform, Not Pack, the Courts.”

Eric Boehm reports that “Trump’s deportation plan would cost nearly $1 trillion … and it would wreck the economy.” A slice:

Former President Donald Trump’s promise to carry out “the largest domestic deportation operation in American history” would not only be a moral calamity requiring an enormous expansion of government—it would also be hugely expensive and ruinous to the American economy.

Scott Lincicome looks back on “six-plus years of incoherent, ineffective China policy.” Three slices:

We’ve already detailed the tariffs’ costs here at Capitolism: higher taxes and higher prices paid by U.S. businesses and consumers; fewer sales by U.S. exporters; billions in subsidies to bail out politically connected farmers; less U.S. investment due to policy uncertainty; and so on. But we’ve done less on whether the tariffs are actually succeeding as part of some grand strategy to cripple Beijing and reduce U.S. “dependency” on China and Chinese companies. Maybe all those costs are, like, totally worth it if they keep Chinese content away from the U.S. market and hurt the CCP as a result. And six-plus years of tariffs—five of which at the high levels they remain today—should give us a pretty good idea of whether the tariffs are working.

Spoiler: They really aren’t. And nobody should be surprised.

…..

Meanwhile, there’s plenty of evidence undermining the idea that the China tariffs are an integral part of some broader strategy to contain China. For starters, the U.S. applies tariffs on many Chinese goods with no plausible national security or even “resiliency” nexus. This includes breast pumps, garage door openers, bagless vacuum cleaners, portable electric heaters, bicycles and bicycle frames, tiki torches, babies’ blankets and swaddle sacks, cotton blankets, and blood pressure cuffs. I’ve yet to hear a remotely coherent explanation for why these tariffs are in any way “strategic” or otherwise necessary. And that’s because, as anyone who knows the tariffs’ history understands, the White House’s original strategy to target mainly high-tech manufacturing inputs linked to Chinese industrial policy went out the window when China first retaliated and Trump instantly vowed a massive U.S. escalation in response. So, after several U.S.-China tit-for-tats, we get to enjoy tariffs on bleeping baby blankets for no serious policy reason.

…..

Then there’s all the non-China protectionism. “National security” tariffs and quotas on steel and aluminum continue to be applied to imports from most of our closest friends, including Japan and Europe, and to things like rebar that have no plausible defense use. New industrial subsidies—in the Infrastructure Investment and Jobs Act, Inflation Reduction Act, and CHIPS and Science Act—generally target and in some cases even mandate the onshoring of production, not “nearshoring” or diversification away from China. Both the Trump and Biden administrations have also touted enhanced “Buy America” restrictions on federal spending, despite their high costs and discrimination against close U.S. trading partners. “Trade remedy” (antidumping and countervailing duty) cases continue to proliferate against both industrial inputs and finished products, with non-China countries increasingly subject to duties. In this regard, Vietnam—long alleged by the government to be a solid non-China alternative—is particularly disadvantaged by a “non-market economy” status that the Biden administration just re-upped.

The Editorial Board of the Wall Street Journal writes sensibly about differences in monetary incomes. A slice:

The headline conclusion from the working paper published last month by the National Bureau of Economic Research is that the more you work over your lifetime, the more you earn. So far so obvious, but the surprises lurk in an explanation that’s more complex than you’d think.

The authors (from the Federal Reserve Bank of St. Louis, Vanderbilt University and Princeton) use a rich vein of survey data tracking individuals as far back as 1979. They find that a major determinant of total lifetime hours worked is individual choice—some people just prefer to work more, while others might prioritize other activities.

Going a step further, the paper finds that those who work more earn more because they accumulate more skills during the extra time they work. The overlapping effects of different preferences for work and different levels of skills acquisition account for a hefty share of overall differences in lifetime earnings, and operate independent of other factors such as the level of education or skills an individual gains before entering the labor force. In other words, income inequality is in part a matter of choice rather than intractable economic or social forces. Sorry, socialists.

Art Carden explains the difference between “May I take your order?” societies and “That’s an order!” societies.

“The economic consequences of Hugo Chavez.” (HT GMU Econ alum Dominic Pino.)

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… is from page 69 of my GMU Econ colleague Mark Koyama’s, and his co-author Jared Rubin’s, superb 2022 book, How the World Became Rich:

[T]echnological innovation is essential for growth to persist in the long run. But innovation requires detailed knowledge of production processes and what can make production more efficient. Any society that frowns upon hard work will be unlikely to have a robust class of innovators. Any society that disparages finance will be unlikely to have a thriving entrepreneurial class or significant investment in capital.

DBx: Yes.

Important lessons are packed into this short passage. The first sentence identifies a key reason why, in any country with more than a tiny population, widespread and sustained prosperity will never happen as a result of a government distributing to its population the proceeds that come from that government’s ‘ownership’ of petroleum or other natural resources. The people of a country remain prosperous only if and when each of them produces – meaning, people specialize according to their comparative advantages and, no less essentially, innovate and are open to economic innovations and creative destruction.

The second sentence of the above quotation implies that innovation that contributes to economic growth requires that individuals on the spot have the freedom to act on the detailed and dispersed bits of knowledge to which each has unique access. To the extent that this freedom is curtailed, information that might prove useful for economic growth remains untapped and wasted. Moreover, innovation, by its nature, cannot be predicted or planned. Therefore, innovation is inherently at odds with industrial policy and other attempts to impose on the economy a particular ‘vision’ of just how resources should be allocated. A society can have industrial policy – by which I mean a policy aimed at securing a predetermined pattern of resource allocation across a broad swathe of the economy – or it can have innovation that is necessary for sustained growth. It cannot have both.

The truth of the third sentence is obvious. Prosperity means access to lots of consumer goods and services. These outputs will be available only if they are produced – meaning, only if people are willing to work hard either to produce directly the outputs they consume or produce outputs to exchange for the things they consume. Because innovation is typically the result of hard work, anything – policy, a set of cultural attitudes, whatever – that discourages hard work discourages innovation.

The truth of the fourth and final sentence of the quotation is rooted in the reality that economic growth requires efficient capital goods, and that production and maintenance of these capital goods requires that some resources be diverted from satisfying present consumption desires into the production and maintenance of capital goods. Financial markets encourage savings and are essential to the gathering up of saved resources and the allocation of these resources to those particular uses that have the prospect of contributing the most to economic output. Financial markets also reduce economic waste by drawing resources away from uses that are not as productive as other uses of those resources are likely to be.

It’s easy to disparage finance as ‘unproductive.’ But as with any sector of an economy, insofar as the financial sector arises in response to market forces, it contributes to the efficient allocation of resources. The fact that economically uninformed pundits and politicians do not understand the importance of the role played by financial markets – the fact that these uninformed people publish economically ignorant indictments of financial markets – does not render these markets less essential to modern widespread prosperity.

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I just realized that I have so far failed to archive, here at Cafe Hayek, a piece that I had in the January 26th, 2011, issue of the Christian Science Monitor. The full text of this long-ago essay – titled “State of the Union shows Obama is now pro-business. He should be pro-growth.” – is now available beneath the fold.

[continue reading…]

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I much prefer complete separation of schools and state, but given that such a separation is unlikely, I’m confident that vouchers are a second-best option.

Editor, ProPublica.org

Editor:

In her critical report on support for school vouchers, Ava Kofman parrots fallacies when she writes that “vouchers undermine church-state separation while also draining resources from public schools” (“A Pair of Billionaire Preachers Built the Most Powerful Political Machine in Texas. That’s Just the Start.” Oct. 2).

First, vouchers allow parents, not government, to choose the schools their children attend. This feature of vouchers no more undermines church-state separation than does the fact that the GI Bill allows its beneficiaries to spend government funds to pay for tuition at schools such as Notre Dame, Yeshiva, and Liberty University.

Second, the school-choice enabled by vouchers would “drain” money from public schools only if public schools fail to offer education that is at least equal in quality to the education offered by private schools. The ability of Americans to buy GM and Toyota automobiles doesn’t “drain” resources from the Ford Motor Co. as much as it incites Ford (and GM and Toyota) to offer high-quality products. And just as it’s absurd to think that Ford would maintain the quality of its automobiles if it were protected from competition, it’s absurd to think that public schools maintain the quality of their instruction given their current protection from competition. Ms. Kofman’s confidence that vouchers will drain public schools of funds implies that she’s confident that public schools cannot or will not provide education as well as can and will private schools. Can you or Ms. Kofman articulate a sound reason why public schools should not lose funds if, in competition with private schools, they are unable to offer education at least comparable in quality to that of private schools?

By shielding public schools from the account that would be delivered by competition, your opposition to school choice belies your boast that you “hold power to account.”

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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Jay Bhattacharya, writing in Reason, reviews Anthony Fauci’s new memoirs. Four slices:

As a young medical student, I admired Tony Fauci. I bought and read Harrison’s Principles of Internal Medicine, a vital textbook that Fauci co-edited. In reading his new memoir, On Call, I remembered why I admired him. His concern about his patients’ plights, especially HIV patients, comes through clearly.

Unfortunately, Fauci’s memoir omits vital details about his failures as an administrator, an adviser to politicians, and a key figure in America’s public health response to infectious disease threats over the past 40 years. His life story is a Greek tragedy. Fauci’s evident intelligence and diligence are why the country and the world expected so much of him, but his hubris caused his failure as a public servant.

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By contrast, his treatment of scientific critics is harsh, crossing lines that federal science bureaucrats should not cross. In 1991, when University of California, Berkeley, professor and wunderkind cancer biologist Peter Duesberg put forward a (false) hypothesis that the virus, HIV, is not the cause of AIDS, Fauci did everything in his power to destroy him. In his memoir, Fauci writes about debating Duesberg, writing papers, and giving talks to counter his ideas. But Fauci did more, isolating Duesberg, destroying his reputation in the press, and making him a pariah in the scientific community. Though Fauci was right and Duesberg wrong about the scientific question, the scientific community learned it was dangerous to cross Fauci.

…..

By any measure, the American COVID response was a catastrophic failure. More than 1.2 million deaths have been attributed to COVID itself, and deaths from all causes have stayed high long after the number of COVID deaths themselves diminished. In many states, particularly blue states, children were kept out of school for a year and a half or longer, with devastating effects on their learning and future health and prosperity.

Coercive policy regarding COVID vaccination, recommended by Fauci on the false premise that vaccinated people could not get or spread the virus, collapsed public trust in other vaccines and led the media and public health officials to gaslight individuals who had suffered legitimate vaccine injuries. To pay for the lockdowns recommended by Fauci, the U.S. government spent trillions of dollars, causing high unemployment in the most locked-down states and a hangover of higher prices for consumer goods that continues to this day. Who is to blame?

…..

All this background makes his discussion of the Great Barrington Declaration all the more galling. The Declaration is a short policy document I wrote along with Martin Kulldorff (then of Harvard University) and Sunetra Gupta (of the University of Oxford) in October 2020. Motivated by recognizing that the lethality and hospitalization risk from COVID was 1,000 times lower in younger populations than in older, the document had two recommendations: (1) focused protection of vulnerable older populations, and (2) lifting lockdowns and reopening schools. It balanced the harms of the lockdowns against the risks of the disease in a way that recognized that COVID was not the only threat to human well-being and that the lockdowns themselves did considerable harm.

Fauci denigrates the Great Barrington Declaration as being filled with “fake signatures,” though FOIAed emails from the era make it clear he knew tens of thousands of prominent scientists, doctors, and epidemiologists had co-signed it. In his memoir, he repeats a propaganda talking point about the Declaration, falsely claiming the document called for letting the virus “rip.” In reality, it called for better protection of vulnerable elderly people.

Fauci asserted it was impossible to “sequester to protect the vulnerable” while simultaneously calling for the whole world to sequester for his lockdowns. His rhetoric about the Great Barrington Declaration poisoned the well of scientific consideration of our ideas. With brass-knuckle tactics, he won the policy fight, and many states locked down in late 2020 and into 2021.

The virus spread anyway.

Paul Best reports on “the paradox of protectionism.” Two slices:

In total, US businesses have paid $242.07 billion in additional taxes due to tariffs since 2018—costs that are either absorbed by those American businesses or, more likely, passed on to consumers. For example, General Motors and Ford said in 2018 that steel and aluminum tariffs would increase their costs by $1 billion each, translating to about a $700 jump in production costs for every vehicle made in North America. Similarly, tariffs on washing machines caused a 12 percent increase in consumer prices, which equates to an $86 increase per machine.

…..

Since then, despite criticizing tariffs ahead of the 2020 election, President Biden has maintained and even expanded on Trump’s protectionist agenda, issuing a new round of tariffs on Chinese goods earlier this year. Vice President Kamala Harris, the Democratic nominee for president, said in 2019 that she “is not a protectionist Democrat” but also hasn’t indicated that she would meaningfully change the Biden administration’s course on trade.

Trump, meanwhile, has doubled down on protectionism, promising to put a “ring around the country” in the form of a 10 percent tariff on all imports and a 60 percent tariff on Chinese imports. His running mate, Sen. JD Vance (R‑OH), represents a clean break from the GOP’s free-market tradition, embracing tariffs, higher minimum-wage laws, and industrial policy.

The unintended consequences of this new protectionism consensus will surely lead to calls for more state intervention, as when Trump handed billions in subsidies to farmers affected by his trade war.

America’s distillers will be harmed by Trumpian tariffs. (HT Phil Magness)

Elizabeth Nolan Brown reflects on Kamala Harris’s opportunistic flip-flopping on public policy. A slice:

While running for president last time, Harris said there was “no question” that she was in “in favor of banning fracking,” an oil and gas extraction method that has helped lower natural gas prices and reduced reliance on coal but troubled environmentalists over concerns about potential ill effects. In July, Harris’ campaign told The Hill that a President Harris would not seek a ban on fracking.

As part of the Green New Deal Harris supported, the federal government would have “guarantee[d] a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States.” The Harris ’24 campaign has since said she does not support a federal job guarantee.

During her previous presidential bid, Harris said she was open to expanding the Supreme Court. In July, her campaign told The Hill she does not support this proposal.

What motivates the DC staffer?

Here’s George Will on how the FBI copes with mounting threats. A slice:

The blessings of life in the digital age are inseparable from dangerous potentialities. In 1995, a rogue trader at Barings Bank, then London’s oldest merchant bank (founded in 1762), inadvertently demonstrated how fragility can be an aspect of connectedness: He brought about his employer’s collapse with reckless keystrokes. Israel’s audacious ingenuity last month with Hezbollah’s exploding pagers and walkie-talkies demonstrated how connectedness can be weaponized.

Harold Black asks if kidney transplants are racist. Here’s his conclusion:

The algorithm once used to determine whether a patient went on the transplant list was found to understate the severity of kidney disease amongst blacks. That algorithm has since been changed to more accurately reflect the extent of kidney disease for black patients. This means that the real degree of kidney disease has been understated for blacks and the waiting lists for patients will grow. This further points to the necessity of finding more black living donors. If anyone at HHS is listening, please initiate a pilot program to offer monetary incentives to the family members of transplant patients. In order to make it sound race neutral, the incentives can be scaled acording to income.

The Editorial Board of the Wall Street Journal accurately describes the Biden-Harris rollout of expanded broadband as “a fiasco.” A slice:

The Administration has also stipulated hiring preferences for “underrepresented” groups, including “aging individuals,” prisoners, racial, religious and ethnic minorities, “Indigenous and Native American persons,” “LGBTQI+ persons,” and “persons otherwise adversely affected by persistent poverty or inequality.”

Good luck trying to find “underrepresented” hard-hats in Montana. An official overseeing Montana’s program told Congress last month that the Administration has given “conflicting or even new and changed guidance after submitting our plans” and is “slowing states down and second-guessing good-faith efforts.”

Wall Street Journal columnist Allysia Finley decries the use of government power to intimidate political opponents. A slice:

It’s hard not to roll your eyes at warnings that Donald Trump would use his power as president to punish opponents while special counsel Jack Smith pursues him with the zeal of Captain Ahab. Meantime, the press ignores how President Biden’s appointees target their business enemies.

The Federal Trade Commission last week whaled Hess CEO John Hess, a shale-fracking pioneer who has lambasted the administration’s energy policies. The message to other execs: Put up and shut up.

After Chevron last autumn announced plans to acquire Mr. Hess’s company, Democrats demanded that the FTC intervene. Senate Majority Leader Chuck Schumer tweeted the deal “would give Big Oil more fuel to raise gas prices,” never mind that the combined company would constitute a tiny fraction of global oil production.

Nonetheless, the FTC’s three Democratic commissioners contrived a fictitious narrative about Mr. Hess being in league with the Organization of the Petroleum Exporting Countries. They used this to scapegoat Mr. Hess for rising gasoline prices under Mr. Biden and as justification to bar him from Chevron’s board. Their claims are a lot of bark but no bite.

Fiona Harrigan exposes a recent fabricated claim by Trump about immigrants.

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… is from page 520 of the 1988 collection of Lord Acton’s writings (edited by the late J. Rufus Fears), Essays in Religion, Politics, and Morality; specifically, it’s a note drawn from Acton’s extensive papers at Cambridge University; (I can find no date for this passage):

Limitation is essential to authority. A government is legitimate only if it is effectively limited.

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John Hinderaker accurately identifies the greediest institutions in society as governments. (HT George Leef)

Mario Loyola applauds Florida for having “steered clear of green policies that are creating a grid crisis in other states.” A slice:

Florida relies on natural gas for 75% of its electricity, more than any other large state. That’s remarkable because of the five largest states, the other four—California, New York, Pennsylvania, and Texas—all have significant natural-gas reserves, while Florida has none. Yet compared with Florida, residential electricity is 27% more expensive in Pennsylvania, 60% more expensive in New York and 137% more expensive in California. Even pro-energy, GOP-controlled Texas has more expensive electricity than Florida, partly because of its large renewable energy sector, which makes its grid costly and difficult to operate.

Because it has avoided the misguided climate policies of other states, Florida is better positioned to weather the historic energy-scarcity crisis now bearing down on America’s electricity grid. Just as electricity demand is soaring across the country, driven by electric vehicles and artificial-intelligence data centers, a train wreck of federal policy failures is constraining the grid’s ability to meet the new demand.

Sheldon Richman understands just how very destructive would be Trump’s economic nationalism. A slice:

What’s foreign to Trump’s mentality is any notion of an unplanned, spontaneous market order built on individual freedom and choice, which is at the heart of sound economics. He must see himself as a hands-on CEO who can solve any problem. That’s the last thing we need. He should read Leonard Read’s “I, Pencil.” (The video version is here.)

In a word, Trump is an economic warmonger, a not-too-distant cousin of a regular warmonger. As the old free traders said, “When goods can’t cross borders, soldiers will.”

It would be one thing if Trump were promising to shrink the government so much that businesses everywhere wanted to flock to these hospitable shores. But his “New American Industrialism” is an old-fashioned industrial policy in which he or his team of experts would pick winners to carry out his glorious vision. Which firms and industries get protected or subsidized and which don’t? Those decisions would be made on a political, not an economic, basis. The problem is that Trump and his experts could not know what they would need to know to carry out their plan. Only the free market—through the unhampered price system—can produce that knowledge, which would be widely dispersed, often tacit, and therefore unavailable to a central bureaucracy. Even the great Donald Trump cannot defy the laws of economics.

Here’s GMU Econ PhD candidate Giorgio Castiglia on comparative advantage.

My Mercatus Center colleague Alden Abbott, writing in Forbes, summarizes some of the research that finds that the economic consequences of pharmaceutical benefit managers (PBMs) are positive.

Michael Strain endorses the call by two former heads of the Bureau of Labor Statistics – Erica Groshen and my former Mercatus Center colleague Bill Beach – for the government to adequately fund its statistical-gathering offices.

Bob Graboyes explores FCS – “Fragile Californian Syndrome.”

Pat Lynch writes about “Mexico’s slow-motion disaster.”

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… is from page 354 of Hayek’s profound January 1970 lecture at the University of Salzburg, “The Errors of Constructivism,” as a translation of this lecture is reprinted in the 2014 collection, The Market and Other Orders (Bruce Caldwell, ed.), of some of F.A. Hayek’s essays on spontaneous-ordering forces:

The picture of man as a being who, thanks to his reason, can rise above the values of his civilization, in order to judge it from the outside, or from a higher point of view, is an illusion. All we can ever do is to confront one part with the other parts.