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The Editorial Board of the Wall Street Journal rightly criticizes what it calls Trump’s “dumbest tariff plunge.” A slice:

But Mr. Trump wants tariffs for their own sake, which he says will usher in a new golden age.

We’ve courted Mr. Trump’s ire by calling the Mexico and Canada levies the “dumbest” in history, and we may have understated the point. Mr. Trump is whacking friends, not adversaries. His taxes will hit every cross-border transaction, and the North American vehicle market is so interconnected that some cars cross a border as many as eight times as they’re assembled.

Mr. Trump also objected when we reported an analysis by the Anderson Economic Group that the 25% tariff will raise the cost of a full-sized SUV assembled in North America by $9,000 and a pickup truck by $8,000. Is this how the new Republican Party plans on helping working-class voters?

GMU Econ alum Dominic Pino offers his sensible predictions about the consequences of Trump’s tariffs punitive taxes on Americans who purchase imports. A slice:

• Negligible effect on the inflation rate, as measured by the CPI index or the PCE index. If inflation doesn’t budge, expect a bunch of Trump boosters to try to say they told you so, when in reality, we wouldn’t expect tariffs to have much of an effect on the economy-wide inflation rate. Tariffs make imports more expensive, which will result in less spending elsewhere in the economy. Tariffs do not increase the money supply, so we wouldn’t expect them to have a big impact on inflation.

• Higher prices for the goods to which the tariffs apply. Foreign businesses will mostly not compensate for the tax increase by lowering prices, as the Trump administration claims they will. The tax will be passed on to American consumers and businesses, as it was during Trump’s first term. Because Canada and Mexico are among the top buyers of U.S. petroleum products and sellers of U.S. crude oil imports, expect energy markets to be thrown into a tizzy if energy products are not excluded.

Erica York puts the (huge) size of Trump’s new tariffs taxes on American consumers and businesses in historical perspective.

National Review‘s Andrew Stuttaford isn’t impressed with Trump’s “tariff magic.” A slice:

The economic logic behind these tariffs being imposed on our two closest neighbors is, uh, questionable, and the geopolitical consequences are not likely to be that great either. The chances of Mark Carney, green zealot and Davos man par excellence, winning the next Canadian election just went up another notch.

Trump has started a trade war.

Warren Buffett calls tariffs ‘an act of war’.”

The Atlanta Fed is pessimistic about near-term economic growth.

Scott Lincicome, at X, nicely summarizes Trumpian hypocrisy – and political recklessness – about U.S. tariffs taxes on American consumers and businesses:

2024: BIDENFLATION IS DESTROYING AMERICA
2O25: so prices increase whatever it’s fine

Cato’s Clark Packard and Alfredo Carrillo Obregon decry the U.S. steel industry’s long and harmful dependence on protection by U.S. tariffs. Two slices:

For nearly 60 years, the United States steel industry has been one of the most protected sectors of the American economy. Policymakers have showered an unsavory mix of trade restrictions to benefit domestic steel firms including quotas, tariffs, aggressive trade remedies, and procurement preferences. With the Trump administration promising a new onslaught of protectionism, steel prices are rising even before the tariffs are implemented. As always, consumers will pay the price.

In 2018, the first Trump administration imposed 25 percent “national security” tariffs on steel imported from virtually every country in the world in a bid to boost domestic steel output (despite the Secretary of Defense noting at the time that the military only needed 3 percent of domestic steel production). Those tariffs imposed significant costs on the American economy.

…..

To be sure, there was no mystery before the recent steel tariffs announcement that they would harm domestic manufacturing and other steel-consuming industries. Multiple economic studies, including a US International Trade Commission report calculating the tariffs’ disproportionate costs to the manufacturing, construction, and energy sectors, clearly show that this has been the case ever since the tariffs were first imposed in 2018.

Moreover, as some of these studies also indicate, steel-consuming industries employ at least 46 times more workers than those employed in domestic manufacturing, so far more Americans stand to be hurt than helped by the tariffs. If President Trump is truly interested in boosting American manufacturing, fueling the long-running price disparity between US and global steel prices through misguided and demonstrably ineffective tariffs is not the way to do it.

Scott Atlas, writing in the Wall Street Journal, argues that “America still needs a covid reckoning.” Two slices:

The mismanagement of the pandemic hit us personally and exposed a massive, across-the-board institutional failure. It was the most tragic breakdown of leadership and ethics that free societies have seen in our lifetimes.

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Especially in the U.S.—where the Declaration of Independence proclaims that all men are “endowed by their Creator with certain unalienable rights”—it is stunning that liberty fell so quickly and thoroughly by government decree and with public assent.

Why did free people accept Draconian and illogical lockdowns? The answer reveals the reason for the silence on the pandemic. Censorship and propaganda are part of the explanation, tools of control that convinced the public of two lies—that there was a consensus of experts in favor of lockdowns, and that dissent from that false consensus was dangerous.

Yet that alone doesn’t explain today’s silence about that extraordinary collapse. It is also that so many smart and influential people were complicit. They bought into and even advocated irrational measures that defied data, biology and common sense. That acquiescence—frankly, cowardice—and the failure to grasp reality are inconvenient truths that, understandably, no one wants to revisit.

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Quotation of the Day…

… is from page 34 of Dartmouth economist Teresa Fort’s important 2023 Journal of Economic Perspectives paper, “The Changing Firm and Country Boundaries of US Manufacturers in Global Value Chains” (references removed; emphasis added):

[T]rade statistics and theory need to expand to capture the realities of goods production across firm and country boundaries. These activities affect our understanding of trade and foreign direct investment, as well as aggregate measures of domestic value added and GDP. The potential implications are far-reaching: increased specialization within the production of a particular industry or good provides additional gains from trade. When such specialization entails reallocation into early production stages, like design and innovation, offshoring can even lead to dynamic gains, as the returns to innovation rise, inducing growth in R&D and ideas that beget more ideas.

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Another Open Letter to Pres. Trump

Pres. Donald J. Trump

Mr. Trump:

Earlier today on social media you posted this item:

To the Great Farmers of the United States: Get ready to start making a lot of agricultural product to be sold INSIDE of the United States. Tariffs will go on external product on April 2nd. Have fun!

Given the inescapable consequences of these tariffs, you should post a follow-up item reading:

To the Great Families of the United States: Get ready to start paying a lot more for your food due to my restricting your access to agricultural product from OUTSIDE of the United States. My punitive taxes go on your purchases of lower-cost agricultural imports on April 2nd. Have fun!

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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Some Links

The Editorial Board of the Wall Street Journal reports that Trump’s tariffs are hampering the performance of the American economy. A slice:

President Trump says tariffs will usher in a new era of American prosperity, but the U.S. economy isn’t sharing the anticipatory enthusiasm. A variety of indicators in recent weeks show a slowdown in first-quarter growth, which suggests this is an especially bad time to add new taxes and economic uncertainty.Initial claims for unemployment benefits jumped 22,000 last week, while consumer spending slowed sharply in January. The housing market remains in mediocre shape. A surge of imports in January, as businesses try to get ahead of tariffs, suggests how companies are trying to hedge against border taxes.

All of this has moved the Atlanta Federal Reserve’s GDPNow growth estimate for the first quarter to -1.5%. That scorecard is volatile and changes as new real-time data arrive, but Wall Street forecasters have also been reducing their growth estimates.

This isn’t cause for panic, but it is for tariff caution. Mr. Trump is promising to impose his 25% levies on Mexico and Canada this week, which will send auto and other North American supply chains into chaos. China gets hit with another 10% border tax, with European cars up next, followed by reciprocal tariffs on most of the world.

A tariff is a tax, and taxes impose costs that reduce economic activity. They also add uncertainty about where and how businesses should invest, as CEOs try to figure out where the tariffs will strike, on which goods, and for how long. Will there be exceptions?

At his Facebook page, GMU Econ alum Mark Perry offers what he accurately calls this “narrative destabilizing fact”:

Samuel Gregg explains that “a realist account of the human condition lends support to classical and conservative liberals.”

My intrepid Mercatus Center colleague, Veronique de Rugy, ponders how Milton Friedman would run DOGE. A slice:

Yet I can’t shake the feeling that the administration may not be playing the long game. It isn’t because the cuts will be minuscule compared to what truly needs to be cut. Neither is it because the DOGE team is causing chaos. Any serious effort to cut down the size of government is bound to be chaotic because it throws a wrench into the usual functioning of government and pushes against the desires of many special interests.

My trepidation boils down to two things. First, for all the talk about cutting government waste and fraud, the DOGE-Trump team seems mostly animated by rooting out leftist culture politics and its practitioners in Washington. It feels that it is less about smaller government than it is about political transformation. While the two intersect, this strategy could fall short.

That’s in part—and this is my second point—because for those of us who care about permanently downsizing government and keeping it bound by constitutional rules to prevent the exercise of arbitrary power, DOGE is mixed. While there is a small probability the approach will succeed in reining in spending or the administrative state, it will be at the heavy cost of reinforcing the power of the executive branch and opening the door to the same abuse when the left is in power.

Brian Albrecht warns against the potential move by Trump & Co. to remove the market value of government production from calculations of GDP. Two slices:

Let’s put aside Musk’s confusion about what GDP includes—it’s government production—goods and services actually produced—not spending, which is mostly transfers like Social Security payments. Defining GDP to now be “GDP – G” is a truly terrible idea.

Let’s be clear. The Bureau of Economic Analysis (BEA) tells us that GDP “measures the value of the final goods and services produced in the United States (without double counting the intermediate goods and services used up to produce them).” You may read “value” to be the giveaway, but it is really “market value” or “market sales.” GDP isn’t meant to measure consumer surplus—it measures a country’s total economic production.

The key concept is that GDP measures final output. It doesn’t matter who buys that output—consumers, businesses, the government, or foreigners. As long as it’s a final good or service produced domestically, it counts.

Government spending represents real economic activity involving real resources, producing goods and services that actually exist in the economy. When a government builds a highway, purchases military equipment, or pays teachers, these activities create actual economic value—whether you personally value them or not.

…..

Here’s the most bewildering part of this proposal: we already have exactly what these officials are suggesting. The BEA regularly publishes measures of private sector output that exclude government spending. The BEA publishes this data alongside GDP in its national accounts. Anyone who wants to track private sector performance separately from government activity can already do so.

Jon Miltimore identifies “the scientific fallacy that spawned covid absolutism.” A slice:

Economic hubris, bad science, and raw state power unleashed a period of madness. It wasn’t just that the state’s non-pharmaceutical interventions didn’t work. They often didn’t even make sense.

Near the five-year anniversary of the sudden rise of covidian authoritarianism, Phil Magness reflects on that madness and evil. Three slices:

No less than Anthony Fauci would go on record about the unwisdom of lockdowns, telling CNN on January 24, 2020, that they were “something that I don’t think we could possibly do in the United States, I can’t imagine shutting down New York or Los Angeles.” Fauci then reiterated his doubts in relation to lockdown measures being implemented in China at the time, “because historically when you shut things down it doesn’t have a major effect.”

In just six weeks’ time, nearly the entirety of the US public health profession, including Fauci, would jettison the previous century of scientific literature attesting to the ineffectiveness of lockdowns. Instead, they rushed to embrace the previously-deprecated approach of simulation modeling, and used it to place the majority of the world under mandatory quarantine. Five years later, we still have no clear answers for why this sudden, sharp reversal happened, let alone accountability for the public health officials who made the call to change course.

If any single event warrants credit for swaying the public health profession over to lockdowns, it is the publication of Report No. 9 by the epidemiology modeling team at Imperial College-London on March 16, 2020. The brainchild of Neil Ferguson, a computer scientist and physicist with no medical training, the Imperial College model forecasted catastrophic mortality figures in the coming months if the world’s leading economies did not go into immediate lockdown to contain Covid-19. The initial models projected 510,000 deaths in the UK and 2.2 million deaths in the United States by late July 2020 unless each country adopted a suite of NPI measures to shutter businesses and schools and restrict public gatherings. Ten days later, Ferguson’s team expanded their model to approximately 189 countries and other defined political boundaries. The expanded Imperial College report predicted similar levels of catastrophic death in almost every nation on earth, absent immediate measures to impose society-wide lockdowns.

…..

Neil Ferguson, dubbed “Professor Lockdown” in the press, saw himself elevated to an all-knowing sage of pandemic modeling whose careful scientific guidance to governments averted the very same astronomical death tolls that his models predicted. A simple Google search would have revealed that Ferguson was no disease-modeling Cassandra. Rather, his track record had more in common with a Y2K bug alarmist. Ferguson had a long history of publishing models with similar catastrophic projections for every public health scare of the past two decades. In the early 2000s, he hyped a Mad Cow Disease pandemic in Britain that would supposedly yield death rates in the hundreds of thousands. Then came a model for Mad Sheep Disease with similar tolls. Then, in 2009, a swine flu model predicted one-third of the earth would be infected in a matter of months. Over and over again, Ferguson’s previous models failed to pan out.

The Covid forecast from Imperial College Report No. 9 was no different from Ferguson’s previous alarmist projections, and peaking under the hood of this study revealed its fundamental shortcomings. Although it was touted to the world as the product of cutting-edge supercomputing, the “new” Covid model turned out to be a hasty and clunky adaptation of an earlier pandemic influenza simulation study that Ferguson and his team published in 2006. Its design employed a probabilistic agent-based simulation wherein estimated human contact rates in a fixed population were said to determine disease transmission. The resulting product had more in common with the “Sim City” video game of the late 1990s than an advanced supercomputer projection of Covid-19’s known characteristics.

…..

So why did public health fail to course-correct during Covid amid mounting evidence that lockdowns were not working as claimed? Allow me to suggest an answer rooted in public choice economics and a prescient observation from centuries past. In times of crisis, the public often demands action with little regard for its efficacy. Public officials, in turn, are happy to oblige in the furtherance of their own authority, prestige, and allocations from the public treasury.

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Quotation of the Day…

… is from page 81 of the 2010 Revised Edition of James D. Gwartney’s, Richard L. Stroup’s, Dwight R. Lee’s, and Tawni H. Ferrarini’s Common Sense Economics (footnote deleted):

Trade restrictions neither create nor destroy jobs; they reshuffle them. The restrictions artificially direct workers and other resources toward the production of things that we produce at high cost compared to others. Output and employment shrink in areas where our resources are more productive – areas where our firms could compete successfully in the world market if it were not for the side effects of the restrictions. Thus labor and other resources are shifted away from areas where their productivity is high and moved into areas where it is low. Such policies [imposed by the U.S. government] reduce both the output and income levels of Americans.

DBx: Yes.

Keep the above elementary yet key point in mind when you next hear – as you will if you pay attention to debates over trade – a protectionist dismiss us economists as naive for our alleged glorification of consumption and ignorance of the importance of production. Such claims by protectionists are meant to convince uninformed listeners and readers that protectionists are far more realistic and sophisticated than are economists and other advocates of free trade. ‘Those silly free traders ignore production while we serious protectionists recognize the importance of production’ – that’s a favorite line of protectionists. Protectionists either haven’t actually read much that is written by serious proponents of free trade or they hope that their audiences haven’t done so.

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More Deficient Economic Thinking

Here’s a letter to the Wall Street Journal.

Editor:

Anthony deBarros and Peter Santilli report on “the countries fueling America’s $1.2 trillion goods trade deficit” (March 1).

With respect, what’s the point of such a report? Eighty percent of U.S. GDP is produced by the service sector – implying that the vast majority of Americans have a comparative advantage at producing services. Given this reality, it would be bizarre if America did not have a large so-called “goods trade deficit.”

I write “so-called goods ‘trade deficit’” because, in fact, this accounting artifact is no more an economically meaningful concept than is Taylor Swift’s “goods trade deficit” with the merchants from whom she – a service provider – acquires her lipstick, clothing, houses, and private jet.

Just as Ms. Swift would make herself much poorer if she adjusted her economic activities to reduce her “goods trade deficit,” so too would we Americans be made poorer if our government – misled into thinking that a “goods trade deficit” run by a country highly specialized in services is a problem requiring correction – forced us to adjust our economic activities to reduce America’s so-called “goods trade deficit.”

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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Here’s a letter to USA Today.

Editor:

Defending Pres. Trump’s aluminum tariffs, Peter Navarro focuses exclusively on the effects of these tariffs on U.S. aluminum producers (“Trump tariffs will save American jobs and level the playing field,” Feb. 28). He points out what no serious defender of free trade denies, namely, that punitive taxation of American purchases of aluminum imports prompts Americans to buy more American-made aluminum and, thus, causes U.S. aluminum production to increase.

But rehearsing only what’s obvious to a kindergartner is a poor defense of protectionism. Your readers should be troubled by Navarro’s failure to look beyond the obvious by asking such questions as:

– How much will production fall in industries that use aluminum as an input? U.S. producers of automobiles, aircraft, and power lines heavily use aluminum, as do U.S. construction firms. And according to the Beer Institute, “aluminum is the single largest input cost in American beer manufacturing.” Aluminum is also, of course, used to make cans for non-alcoholic beverages. The tariff-induced higher prices of aluminum will necessarily raise the costs of production in these and other American industries. What reason is there to believe that the additional tariff-induced production of aluminum will be worth the tariff-induced reduction in the outputs of aluminum-using industries? Navarro doesn’t say because he doesn’t ask.

– As the tariffs draw more resources into U.S. production of aluminum, from where will these resources come? They must come from somewhere. What reason is there to believe that the additional tariff-induced production of aluminum will be worth the tariff-induced reduction in the outputs of those industries that lose workers and other resources to American aluminum producers? Navarro doesn’t say because he doesn’t ask.

– If Navarro is correct that legions of foreign countries are shipping subsidized aluminum to the U.S., wouldn’t someone committed to an “America First” agenda want to encourage these shipments? After all, such subsidies mean that foreign governments are putting America First by taxing their citizens in order to increase our access to a valuable metal. Shouldn’t we welcome these subsidized imports and applaud foreign governments for their embrace of Pres. Trump’s America First agenda? Were he a serious thinker, Navarro would be leading us in cheering these foreign subsidies. Alas, a serious thinker Navarro certainly is not.

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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Some Links

Gale Pooley explains that economically productive innovation is stifled – not promoted – by industrial policy. A slice:

The effort in the US to create a cartel to regulate and control AI development through Stargate appears more like the construction of a new DMV to protect BigAI from competition. Hayek explained why a system of free markets with distributed knowledge and know-how was far superior to central planning. DeepSeek, TinyZero, and DeepAgent’s approach looks Hayekian. Capitalism recognizes the potential worth of every individual to create value in a free market. In America, we’re not surprised when a small team of brilliant thinkers can create an entirely new approach to solving a problem.

In the latest issue of the Independent Review I review UC-Davis economist Christopher Meissner’s 2024 book, One From the Many: The Global Economy Since 1850. Two slices:

The title of Christopher Meissner’s book on globalization is brilliantly appropriate: One From the Many. It’s a deliberate reference to the Latin phrase familiar to all users of dollar bills, “E pluribus unum,” traditionally translated as “out of many, one.” Yet the unification that Meissner identifies isn’t political; it’s economic. It’s the unification of the peoples of many different nations—of many different cultures, creeds, conditions, and callings—into one society, a society that transcends political boundaries and language differences. It’s the global economy. Its whole is much greater than the sum of its parts.

In this economy today, each person benefits from the creativity and work effort of literally billions of his or her fellow human beings, just as this person promotes—through his or her own creativity and work effort—the well-being of these billions. Today’s globe-spanning market order encourages and directs a division of labor that generates annual global output now worth about $106 trillion, or just over $13,000 for every man, woman, and child. If this output were spread evenly, every person on earth in 2025 would enjoy access to roughly ten times—measured in monetary value—the amount of material goods and services that was available to the typical human being for nearly all of human history until the Industrial Revolution.

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International trade did not alone create what the historian Stephen Davies aptly calls “the wealth explosion” (The Wealth Explosion: The Nature and Origins of Modernity, Edward Everett Root, 2019). If Deirdre McCloskey (Bourgeois Equality, University of Chicago Press, 2016) is correct (as I believe her to be), the main catalyst for this glorious explosion was a change in a more favorable direction of attitudes toward commerce, economic innovation, and creative destruction. Yet globalization both supercharged the wealth explosion and was itself supercharged by the attitudes that make modern prosperity possible.

Meissner—a professor of economics at UC-Davis—accurately subtitled his book The Global Economy Since 1850. After being treated to a quick survey of trade during the many millennia before the modern age, the reader is then immersed in the historical, political, and economic details of the past two hundred years. The reader learns that globalization—of people (through immigration), as well as of goods, services, and capital—is generally a force for good. Meissner reports on how the first great wave of globalization, which crested in the early twentieth century, differs from the second great wave, which we in 2025 are still riding. One key difference is that much more of what’s internationally traded today are component parts. Compared to the past, countries today have far fewer comparative advantages (and disadvantages) at producing whole products—automobiles, kitchen appliances, machine tools—and far more comparative advantages (and disadvantages) at performing the various highly specialized and quite narrow tasks that, when coordinated together by the price system, result in whole products. Very many of today’s imports and exports contain intermediate inputs—including human work effort and creativity—from several different countries. Today, very many goods (and, increasingly, also services) are best described as “Made on Earth” (Daniel J. Ikenson, “Made on Earth: How Global Economic Integration Renders Trade Policy Obsolete,” Trade Policy Analysis No. 42, Cato Institute, December 2, 2009).

Pierre Lemieux offers more insight about trade and tariffs.

Stephanie Slade reminds us that only dynamic economies grow. A slice:

Take trade. A national protectionist aims to stop cheap foreign goods from undercutting domestic producers; he wants Americans to buy American, even if it costs more, because those purchases will support jobs on the homefront. That would make all imports troubling—T-shirts as well as technology, from Canada as well as from China. A national libertarian, in contrast, cares about eliminating dependence on China only in what Ramaswamy called “critical sectors for U.S. security”: military equipment and pharmaceuticals. Moreover, he recognizes that “if we’re really serious about decoupling from China in those critical sectors, that actually means more, not less, trade with allies like Japan, South Korea, India, Vietnam.” Stopping Americans from buying fruit from Peru or cars from Germany makes consumers worse off, and it doesn’t do anything to address concerns that our top geopolitical adversary could control our access to lifesaving drugs. (How serious a concern that ought to be is a separate question.)

Until recently, Trump has been treated as a dyed-in-the-wool protectionist. But at the tail end of the 2024 campaign, he and those around him began to make recognizably libertarian noises. Now, as he begins the difficult task of assembling a governing agenda, two paths lie before him. One leads toward dynamism, the other toward stagnation. The future of American prosperity depends in no small part upon the choices he and his party will make.

You may be wondering how different these options really are. While neither will align perfectly with a typical Reason subscriber’s preferences, even a MAGA-inflected libertarian agenda could represent a major improvement over the left’s militant progressivism or the “muscular” conservatism advocated in recent years by the so-called New Right. As evidence, witness the leading protectionists’ indignant reactions to some of these recent developments.

Oren Cass is often considered the top policy wonk pushing right-wing economic nationalism. A former adviser to presidential hopeful Mitt Romney, Cass in 2020 launched American Compass, a think tank “dedicated to helping American conservatism recover from its chronic case of market fundamentalism.” Since then, he and other nationalist conservatives have endorsed a host of government interventions historically associated with the Democratic rather than the Republican Party, from industrial policy to labor regulations to family subsidies to tariffs. The Cass agenda is explicitly protectionist, seeking to shield American workers from foreign competition and to prop up the domestic manufacturing sector with taxpayer dollars.

For years, both the mainstream media and right-wingers online have treated this as the only plausible future for the GOP. The debut of national libertarianism upended that presumption, and Cass was none too pleased. Days after the election, he began lambasting Ramaswamy’s ideas as “warmed-over market fundamentalism with a dash of nationalism sprinkled on to mask that past-the-expiration-date funk.” His resentment at being overshadowed at what should have been a moment of triumph for nationalist conservatism was almost tangible.

Scott Lincicome is correct: “The ‘retail apocalypse’ doesn’t need a government fix.” Two slices:

Fears of the retail apocalypse have fueled not only piles of breathless reporting on certain store closures and their national economic implications, but also government policy, as states and localities across the United States have responded with subsidies for local businesses, new taxes on online sales, bans on “big box” stores, and so on. Yet, even a decade ago, there were clear signs that the “retail apocalypse” wasn’t actually happening—that brick-and-mortar retail was changing, not dying, and that Americans were basically fine with the result. Now comes a great new paper from the National Bureau of Economic Research (NBER) confirming the early pushback and strongly cautioning against efforts to regulate American retail businesses now or in the future.

Economist Yue Cao and colleagues tested the retail apocalypse thesis by first examining changes in general merchandise stores—25 different national chains and several smaller regional outlets—in 18 metro areas between 2010 and 2019. Then, using these figures and smartphone geolocation data for more than 2.7 million devices, they estimate whether Americans in these places were better or worse off (in terms of “consumer surplus”) in 2019 than they were 10 years earlier.

They found, first and contrary to the conventional wisdom, the number of general merchandise stores in the United States actually increased in the 2010s, from 49,089 to 52,807, as dollar stores, supercenters, and discount department stores more than replaced certain traditional department stores and regional chains.

…..

Folks peddling the retail apocalypse narrative miss the U.S. market’s fluidity. They assume high walls between different stores, instead of overlapping and constantly changing palates of various goods and services. They assume markets won’t quickly adjust—either through new entrants or modified incumbents—to changing consumer tastes, new innovations, a certain company’s exercise of market power, or its bankruptcy. And they assume American shoppers don’t adapt when the retail landscape changes (e.g., by a store’s closure or its deteriorating quality/prices). In reality, of course, all of these things are happening every day, and they’re a big reason why dire predictions of market doom rarely, if ever, materialize.

This kind of myopia extends into other kinds of retail, as well. The feds blocked grocery giant Kroger’s merger with Albertsons in December on the grounds that the combined entity would reduce market competition and, among other things, lead to higher grocery prices. Yet, since at least the time the merger was first announced in 2022, it’s been clear that competition in the U.S. grocery space was alive and well, albeit different from the old school version federal regulators had in mind. Instead, these two traditional supermarket giants have been steadily losing ground to newer, less-traditional players—especially Walmart, Costco, and others like them.

Alex Tabarrok makes important points about the Trump administration’s attempt to eradicate woke from colleges and universities. A slice:

The Trump administration is targeting universities for embracing racist and woke ideologies, but its aim is off. The problem is that the disciplines leading the woke charge—English, history, and sociology—don’t receive much government funding. So the administration is going after science funding, particularly the so-called “overhead” costs that support university research. This will backfire for four reasons.

First, the Trump administration appears to believe that reducing overhead payments will financially weaken the ideological forces in universities. But in reality, science overhead doesn’t support the humanities or social sciences in any meaningful way. The way universities are organized, science funding mostly stays within the College of Science to pay for lab space, research infrastructure, and scientific equipment. Cutting these funds won’t defund woke ideology—it will defund physics labs, biomedical research, and engineering departments. The humanities will remain relatively untouched.

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Some Links

Daniel Hannan is correct: Protectionism’s incoherence and detachment from empirical reality implies that protectionism, as an intellectual project, is an utter shambles. A slice:

It is what P.J. O’Rourke was getting at when he described protectionism as an IQ test rather than an ideological test. There is a reason that almost every economist supports free trade.

Eric Boehm explains that tariffs “on imports from Canada and Mexico are still a terrible idea.”

Sarah Montalbano’s letter in today’s Wall Street Journal is very good:

As a born and raised Alaskan, I found it refreshing to see other states call for reform of the century-old Merchant Marine Act (“Connecticut Asks Congress to ‘Rethink the Jones Act’” by Bryce Chinault and Andrew Fowler, Cross Country, Feb. 22). The Jones Act, which limits trade between U.S. ports to U.S.-flagged ships, effectively prohibits New Englanders from importing liquefied natural gas from the Gulf Coast. The effect: They must pay top dollar for overseas LNG.

The law, passed in 1920, was originally intended to capture the nascent market of Alaska. It uniquely burdened the territory by also prohibiting the use of Canadian railroads in conjunction with foreign ships. While that practice came to an end with statehood in 1959, Washington Sen. Wesley Jones had already firmly cemented Seattle’s monopoly over shipping to Alaska.

The damage continues today. Despite Alaska’s proximity to international markets, the Jones Act inflates the cost of groceries, building materials, consumer goods and energy. Hawaii and Puerto Rico face the same: According to recent research, the law costs Hawaii and Puerto Rico an estimated $1.2 billion and $1.5 billion a year, respectively. Coastal states can attribute 2% to 3% of their shipping costs to the Jones Act.

The law reduces competition, raises prices and discriminates against the residents of any state that enjoys the benefits of shipping. Reforming it should be a top priority for an administration that cares about reducing costs for consumers.

The Editorial Board of the Wall Street Journal rightly excoriates Trump and Vance for their disgraceful performance yesterday in the Oval Office. A slice:

Why did the Vice President try to provoke a public fight? Mr. Vance has been taking to his X.com account in what appears to be an effort to soften up the political ground for a Ukraine surrender, most recently writing off Mr. Putin’s brutal invasion as a mere ethnic rivalry. Mr. Vance dressed down Mr. Zelensky as if he were a child late for dinner. He claimed the Ukrainian hadn’t been grateful enough for U.S. aid, though he has thanked America countless times for its support. This was not the behavior of a wannabe statesman.

Mr. Zelensky would have been wiser to defuse the tension by thanking the U.S. again, and deferring to Mr. Trump. There’s little benefit in trying to correct the historical record in front of Mr. Trump when you’re also seeking his help.

But as with the war, Mr. Zelensky didn’t start this Oval Office exchange. Was he supposed to tolerate an extended public denigration of the Ukrainian people, who have been fighting a war for survival for three years?

Dan McLaughlin decries J.D. Vance’s ad hominem approach to foreign policy. A slice:

But in trying to put my finger on what’s so grating about Vance’s approach to foreign policy debates, I find it’s not just that I disagree with the substance of a lot of his opinions and worldview. It’s Vance’s constant instinct to go swiftly to the ad hominem argument whenever anyone is in his way on foreign affairs. It’s a habit that we normally associate with left-wing positions on foreign and national security policy, and it bespeaks a profound lack of confidence in the strength of his own arguments.

Juliette Sellgren talks with Charlotte Thomas about learning and the liberal arts.

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