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Quotation of the Day…

… is from page 293 of Robert Higgs’s 1999 essay – “The Era of Big Government Is Not Over” – in The Good Society, as this essay is reprinted in the excellent 2004 collection of some of Bob’s essays, Against Leviathan (footnote deleted, link added):

So long as the prevailing ideology imposes no general (that is, constitutional-level) constraint on the size, scope, and power of government, then the continued growth of government will flow naturally from the workings of the present political system, as public-choice analysts have made sufficiently clear. Concentrated benefits and dispersed costs for projects championed by special interests; real and trumped up emergencies; scheming, self-serving, strategically situated bureaucracies; and paternalistic projects seemingly without end – all nourish the government’s addition of muscle and fat.

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Here’s a letter to the Wall Street Journal.

Editor:

You correctly report that Trump’s punitive taxes – a.k.a. tariffs – on Americans’ purchases of imports are not delivering the promised increase in manufacturing employment (“Where Are Those Manufacturing Jobs?” December 17). Because such an employment increase is a goal set by the administration for these tariffs, it’s fair to criticize the tariffs for failing to achieve this goal.

But a more fundamental error is the administration’s obsession with restoring manufacturing employment. Americans work overwhelmingly in the service sector because that’s where the better jobs are. Not only is the average hourly wage earned by workers in the private service sector higher than is the average hourly wage earned by manufacturing workers, the economy’s highest-paying jobs are all in the service sector – for example, physicians, bankers, IT workers, and (let’s not forget) real-estate developers.

It’s notable that nearly all of the people – including Donald Trump, Howard Lutnick, and Oren Cass – who clamor most loudly for more manufacturing jobs work quite lucratively in the service sector.

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

Southeastern Louisiana University economist, and GMU Econ alum, Scott Burns exposes the unseen costs to Americans of what Scott accurately labels the “cheap sophistry” that is Trump’s destructive protectionism. A slice:

President Trump is a slick politician and a masterful spin artist. He’s exceptional at portraying his policy’s “success” by focusing our attention squarely on its visible beneficiaries. That’s why he often unveils his latest tariffs in made-for-TV spectacles where he’s encircled by jubilant workers at revived factories that directly benefit from his protectionist policies.

Thankfully, Bastiat’s parable exposes this clever marketing ploy for what it is: cheap sophistry. For every reshored job and “Made in America” product comes at the hidden cost of whatever else we could’ve made with those resources (where that “whatever else” is something more valuable to the economy). These costs are, by definition, difficult to measure. And unlike a ribbon-cutting ceremony at a newly opened factory, they’re impossible to showcase. But they’re very real, and very damaging to the economy. The late Henry Hazlitt aptly distilled Bastiat’s insight in his classic work, Economics in One Lesson: the art of economics consists in looking beyond the immediate, visible benefits of a policy on one group to consider its long-run, “unseen” consequences on the entire economy.

Keep your eyes peeled, and you’ll detect shards of this fallacy scattered all over the White House Rose Garden from the president’s “Liberation Day” extravaganza. You’ll also find it littered all over cable news. Indeed, viewing today’s headlines through Bastiat’s lens reveals that many of the president’s most cherished trade war “victories” are a mirage.

In May, Trump’s Commerce Secretary Howard Lutnick vowed to stick it to China by bringing iPhone assembly jobs “back” to America. “The army of millions of human beings screwing in little screws to make iPhones, that kind of thing is going to come to America!” he gushed.

Would this bolster our economy, as Trump and Lutnick argue? Quite the opposite. Hiring an “army of millions” of Americans to assemble iPhones means drawing them away from jobs we actually excel at, like designing iPhones, developing new software, and countless others. If a $25,000 job assembling iPhones replaces a $125,000 job designing them, America isn’t $25,000 richer – we’re $100,000 poorer. Dave Chappelle is right: Americans want to buy iPhones, not make them.

GMU Econ alum David Hebert makes clear that “no matter how you spin it, the tariffs are hurting American jobs and wallets.” A slice:

The Federal Reserve’s Beige Book, which collects both quantitative and qualitative reports from businesses across the country, tells a consistent story. In Cleveland, “some manufacturers and auto dealers reported passing along 100 percent of tariff increases to customers, while others said that they are slow[ly] raising prices in response to tariffs.” In Chicago, “manufacturers attributed higher raw materials prices to tariffs and several said that they had passed on those increases to customers.” In Richmond, a glass manufacturer reported that its supplier was driven out of business by the tariffs, forcing consolidation among remaining suppliers, eliminating regional jobs, and driving prices higher.

Survey data from Cleveland shows that 87 percent of manufacturing firms report increased costs due to tariffs and the uncertainty surrounding them. For firms that receive at least half of their materials from imports, 75 percent reported that they would pass at least a majority of the tariffs on to consumers. None reported that they would absorb the full cost themselves.

Philip Luck, former deputy chief economist at the State Department, put it succinctly: the president promised “millions and millions of jobs” from the tariffs, but those promises are completely out of step with reality.

[Matthew] Lynn alleges that tariffs are working as intended. If that’s the case, we should see American manufacturing employment surging. After all, the entire point of the tariffs is to reshore American manufacturing jobs—something President Trump and his administration have been remarkably clear about.

So how’s that going?

According to the Bureau of Labor Statistics, the manufacturing sector has lost jobs for the past five months. The jobs report for September found 6,000 fewer manufacturing jobs, which brings the total job losses in manufacturing to 59,000 since April’s “Liberation Day.” The Institute for Supply Management finds similar figures, with eight consecutive months of contracting manufacturing employment.

These aren’t statistical blips, and they’re not the result of “fake data.” They form a pattern. Manufacturing job openings have plunged by over 100,000 since Trump took office. Factory hiring in May fell to its weakest rate since 2016, including the pace of hiring during the COVID pandemic.

The Editorial Board of the Wall Street Journal reasonably asks: “Where are those manufacturing jobs?” A slice:

Our readers know the private economy is the engine of wealth creation, while most government employees are in the business of redistributing that wealth. The Biden Administration went on a government hiring boom, so a reversal is what President Trump promised and won’t hurt the economy.

This doesn’t mean the labor market is booming. The November report continues the trend from before the government shutdown that private employers aren’t laying off workers in large numbers but they also aren’t hiring all that many. The question is why?

Some blame the adoption of artificial intelligence that replaces workers, or at least caution from CEOs as they wait to see how AI affects the economy. But AI still hasn’t been widely adopted, so AI can’t be the dominant explanation.

Our main suspect is the impact of tariffs and the uncertainty Mr. Trump’s willy-nilly border tax policies have caused. The Supreme Court may soon overturn his emergency tariffs as illegal, and many CEOs want to see how that case turns out and how Mr. Trump responds. Investment and hiring may also turn up next year as the tax cut provisions of this year’s tax and spending bill kick in.

One big statistical reason to suspect that tariffs are hurting jobs is the trend in manufacturing. Remember when tariffs were supposed to produce a U.S. manufacturing boom? It hasn’t happened. In January BLS reported 12,755,000 workers in all manufacturing industries. The number rose by a few thousand through April, but then began to fall each month and in November hit 12,697,000. That’s a net loss of 58,000 jobs, including 19,000 in the last three months.

Further evidence comes from the industries affected most by Mr. Trump’s tariffs of 50% on steel and aluminum and 25% on autos and auto parts. Employment in motor vehicles and parts fell 15,000 since January, while it remained flat in steel-making and aluminum manufacturing. This doesn’t count the job losses in downstream manufacturing firms that use steel and aluminum. Some renaissance.

If Mr. Trump wants a manufacturing revival, he’ll drop his border taxes, and let his other tax policies help hiring and investment.

DBx: As the WSJ‘s Editorial Board would be among the first to admit, there’s nothing inherently desirable about a nation having more manufacturing output or more manufacturing jobs. (Nearly everyone who pleads for policies to create more manufacturing jobs works in the service sector – including Donald Trump and Howard Lutnick.) But if creating more manufacturing output and jobs in the U.S. is the goal, Trump’s tariffs do not seem to be achieving their end.

Jason Furman tweets: (HT Scott Lincicome)

I can’t wait for the stories about why everyone was all wrong about the economists being all wrong about the tariffs.

Ian Vásquez reports that human freedom remains below its pre-covid-hysteria levels.

George Leef reviews Max Bazerman’s Inside an Academic Scandal: A Story of Fraud and Betrayal. A slice:

But with the big higher-education push starting in 1965, “publish or perish” became a mass phenomenon, and the huge numbers of aspiring academics overwhelmed the system. Hundreds of new journals sprang up, frequently with very lax standards for screening out dubious work. That laxity was hilariously exposed by Alan Sokal in an article stating that gravity is merely a social construct, written in fashionable academic gibberish that fooled the editors into taking it seriously.

Moreover, colleges and universities created many new academic “disciplines” where rigor took a backseat to publishing ideologically correct papers on topics like “implicit bias.” Our institutions were employing an army of professors whose main job was not to teach a body of knowledge but, rather, to produce research in avant-garde fields such as Women’s Studies. The result was an outpouring of extremely dubious scholarship—a prodigious waste of resources.

Here’s an analogy. Suppose that a country, acting on the belief that art is a public good that should be given government support, set up a system to subsidize the production of art. After a time, the country found that it was paying for a huge outpouring of absurd artworks, which it would then spend more money to store in warehouses. (The Dutch actually did that, as we read in this article.) Similarly, suppose that a country, acting on the belief that higher education is a great public boon, decided to subsidize college degrees and academic research. The United States has done that, with predictable results: far more degrees and scholarship than previously but with steadily falling quality.

Professor Reuven Brenner drives the point home in a 2024 Wall Street Journal article entitled “Art Subsidies and U.S. Higher Ed.” Brenner writes, “As the costs of the [Dutch] program increased, the agency asked applicants to prove they had sold $4,000 worth of art privately and to donate up to four works to the government each year. It requires little imagination to design wonderful fraud opportunities for all parties involved with such programs in place—which they did.”

When people have to spend their own money for something—art, education, or anything else—they are usually vigilant to make sure they get their money’s worth. But when the government buys or subsidizes things, quality control declines or even disappears as scammers see easy pickings.

Robby Soave is right: In reacting to the murder of Rob and Michele Reiner, Trump “failed a not particularly challenging moral test.” A slice:

Reiner’s intense anti-Trump politics had nothing to do with his death. There is no reason to think that the alleged killer was motivated by political considerations at all. By suggesting that Reiner’s “Trump derangement syndrome” was connected to his death, Trump is introducing a false notion. Note that this was the ostensible reason for the sanctioning of comedian Jimmy Kimmel, who incorrectly stated the motivations for the killing of conservative figure Charlie Kirk. Trump should have avoided making the same mistake.

He should also have avoided dwelling on his personal feud with a man who was just murdered in gruesome fashion. If he didn’t feel like saying anything nice about Reiner, he could have opted to say nothing at all.

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Quotation of the Day…

… is from page 169 of the 1996 Liberty Fund collection of Frank Meyer’s essays, In Defense of Freedom (William C. Dennis, ed.); specifically, it’s from Meyer’s March 28th, 1956, National Review article “In Defense of John Stuart Mill”:

The use of force against those who propound error is wrong, not because it is inexpedient but because it is an outrage upon the freedom of man and, in that, upon the very nature of man.

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Protectionism’s Language is Loaded

In my latest column for AIER I warn that protectionists use much misleading language. A slice:

The most obvious, commonly used confusing term is “trade deficit.” “Deficit” inherently sounds bad. Everyone instinctively resists being in any kind of “deficit.” But those of us who understand the technical definition of “trade deficit” know that this “deficit” is merely the result of an accounting convention by which inflows into a country of money are counted as “positive” while outflows of money are counted as “negative.”

Yet as many economists, including the Nobel laureate Vernon Smith, have pointed out, if the convention were instead (as it could be) to count as a positive the monetary value of imports – and as a negative the monetary value of exports – then so-called “trade deficits” would instead be “trade surpluses.”

The words “trade surpluses,” alas, are more difficult to demagogue than are the words “trade deficits.”

Another technical term that conveys a misleading impression is “concessions,” which means agreements by governments to lower their trade barriers in exchange for other governments agreeing to lower their barriers.

As the excellent trade-policy scholar Daniel Griswold summarizes, in trade agreements, “exports are a benefit and imports a ‘concession.’” The technical term “concession” is thus used to describe those instances in which governments allow their citizens to trade more freely. Greater freedom of trade and the additional goods and services that it makes available are bizarrely rendered as costs – as burdens – that the people of the home country endure in order to obtain the benefit of greater ease of exporting.

Yet another term that distorts understanding is “dumping.” To accuse foreigners of “dumping” goods on our market is to suggest that foreigners are harming us by discarding their trash on our shores or otherwise burying us in things that we’d prefer not to have. No sane person wants to be dumped upon!

This suggestion is completely mistaken. The great trade economist Douglas Irwin notes that “the government’s definition of ‘dumping’ is a lower price charged in the United States than in a foreign exporter’s home market.” And so what really occurs with so-called “dumping” is that the people of the home country are offered the opportunity to buy particular goods at prices lower than foreigners must pay. If the practice of charging differentially lower prices in the US was called not “dumping” but “competitive pricing” or “bargain pricing,” perhaps domestic firms would have less success at persuading the government to use regulations against “dumping” to secure protection from vigorous foreign competition.

There is, after all, no economic reason why any particular good should sell in one country at a price identical to its price in another country.

Plenty of factors explain why, say, a particular model of automobile might sell for less in the US than in the producer’s home market. American demand for that model might simply be lower—perhaps because tastes differ, or because the US retail market is more competitive and offers more alternatives. It’s also possible that auto retailing in the US faces fewer costly government rules than abroad.

Whatever the reason, when imports sell here at lower prices than they do elsewhere, Americans benefit. These lower prices are a gain, not a problem to be “protected” from. Yet by labeling the practice of selling exports at differentially lower prices as “dumping,” policymakers create an unjustified bias against foreign competition.

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Some Links

Writing in the Wall Street Journal, my intrepid Mercatus Center colleague, Veronique de Rugy, explains that labor unions are no friend of workers generally – quite the opposite. A slice:

The way to truly empower workers isn’t to revive the old union monopoly but to give workers genuine options. That means giving workers the freedom to choose the representation they want and demand results. It means allowing workers who opt out of unions to negotiate their own contracts directly with their bosses.

Unions, meanwhile, can survive and thrive by reorienting toward training and certification, helping the workers they represent upgrade skills in industries reshaped by AI and global competition. They also could pioneer new, voluntary forms of representation for gig workers, including advocacy for things like portable benefits that would follow these workers from job to job.

William McGurn celebrates the insights and humanity of the late, great Julian Simon. A slice:

In Israel today, we can see one of Julian’s key principles at work. Population growth, he said, increases the most important driver of human flourishing and prosperity: the world’s stock of knowledge. Another of his key principles is that “the world’s problem is not too many people, but lack of political and economic freedom.”

David Simon, one of Julian’s sons, says his father would have thought Israel’s population growth would continue to fuel strong economic growth. He says Julian also would have emphasized the free-market reforms introduced, starting in 2003, by then-Finance Minister Benjamin Netanyahu.

“More people and more freedom, my father would have said, means more hope—and will make Israel’s light to the world shine even brighter.”

Arnold Kling identifies humility as the defining feature of his political philosophy – a political philosophy that I share. Arnold calls this philosophy “humilitism”; it’s what I call classical liberalism. A slice:

I think that the belief that matters most to me is the belief that human society is too complex for anyone to understand well enough to know best how it should function. The more confidence that you have in your political opinions and the greater your commitment to your political tribe and its leaders, the less confidence I have in your wisdom.

Eric Boehm continues to expose Trump’s outlandishly false claims about tariffs. Two slices:

On Sunday, Trump revisited the $18 trillion claim while speaking to reporters at the White House. “Because of the tariffs, we’ve taken in more than 18—think of this—more than $18 trillion. There’s never been anything like it,” Trump said. Moments later, he repeated the claim, stating that “we took in more than $18 trillion in 10 months.”

That figure is utterly fantastical—and Trump’s explanation is more than a little confusing.

…..

Start with the facts: Over the first 11 months of this year, the federal government collected $236 billion in tariffs and duties. That number comes directly from the Treasury Department’s monthly reports. And even though it represents a huge increase in tariff collections—Trump’s tariffs are the biggest tax increase since 1993—it plainly does not amount to trillions in new revenue.

In fact, Trump’s tariffs are expected to generate about $2.3 trillion over the course of the next decade (if the Supreme Court doesn’t strike them down or Congress or some future administration doesn’t undo them), according to the Yale Budget Lab. That’s 10 years of higher tariffs and the total is still nowhere near $18 trillion.

Logically, getting $18 trillion in tariff revenue in a single year is impossible. The U.S. imported about $3.3 trillion of goods last year. You’d have to tax those imports at nearly 600 percent to get $18 trillion in new tariff revenue. Of course, if you taxed imports at that level, you’d end up with roughly the same amount of imports as tariff revenue: zero.

The reality reported by this Wall Street Journal headline is dismaying despite being, by now – nearly a year into the regime of MAGA socialism – unsurprising: “CEOs Are Learning to Live With Trump’s Turn to State Capitalism.” A slice:

The Nvidia deal says something important about the relationship between business and government under President Trump. His regular intrusions into the boardroom—taking equity stakes, revenue slices or a “golden share”; prodding companies to lower prices or sell drugs through a federal website—are a sort of state capitalism, in which the state doesn’t necessarily own companies, but uses its substantial leverage to steer their behavior.

State capitalism is a two-way street. Many businesses, by aligning themselves with Trump’s agenda, elicit better treatment—in their ability to sell to China, the tariffs they pay, how they are regulated, and what mergers are allowed. In other words, state capitalism doesn’t just serve the interests of the state, but of favored capitalists.

And this tweet by Scott Lincicome points to yet further evidence of the cancerous growth of cronyism that’s occurring now during Trump’s reign.

John O. McGinnis favorably reviews Steven Pinker’s latest book, When Everyone Knows That Everyone Knows…: Common Knowledge and the Mysteries of Money, Power, and Everyday Life. A slice:

The conditions for knowledge to be held in common seem stringent. Everyone (in the relevant group) knows p, everyone knows that everyone knows p, and everyone knows that everyone knows p, and so on ad infinitum. But the puzzle of this infinite regress can be solved by events that everyone sees, like the hissing of a dictator. Everyone sees that everyone is seeing it, and so on ad infinitum. Strictly speaking, however, much of what he analyzes is better described as common belief rather than knowledge in the philosophical sense, since the shared proposition need not be true—a point to which I return to below.

Pinker then demonstrates why common knowledge, in his sense, can have a galvanizing effect. Humans are a species marked by enormous intelligence. As a result, they can exploit many situations to their mutual benefit. But mutual gains often depend on shared expectations about the nature of the problem and what others may do in response.

Common knowledge enables the realization of such gains by aligning not only interests but also expectations. It is a big mistake to revolt against a dictatorship if one does not know that others are in the mood to join you. Hence, creating common knowledge is a prerequisite to revolution. Repressive regimes know this and ruthlessly suppress even small demonstrations, because they threaten to reveal the regime’s unpopularity. Pinker tells a penetrating Russian joke that captures this truth: A man on the street holds up a blank sign. The police immediately hustle him out. The evils of the regime are so well known that blank signs would begin the contagion of common knowledge.

The Editors of The Free Press rightly criticize Trump for his crass remarks on the murder of Rob and Michele Reiner. A slice:

In his 50-plus years as a top American entertainer, Reiner—like most major Hollywood figures—was a liberal. And like a solid percentage of the country, he did not care for Trump. But there is no indication this was an act of political violence, and it is obscene for the president to try to make it into one.

Many Americans have come to expect the president to be petulant and self-centered. We’ve become inured to his wild social media ramblings. Yet he still finds ways to shock us on occasion; his statement on Reiner is exceptionally beneath the office he holds. Rob Reiner was not a political figure. He was merely an outspoken supporter of liberal causes, which of course was his right.

After a horrific weekend that included a lethal shooting at Brown University, the killing of three Americans by ISIS in Syria, and the slaughter of 16 people celebrating Hanukkah on a beach in Australia, the leader of the free world should be looking to unite Americans and condemn bigotry and violence wherever they take place in the world. Instead, he is kicking the corpse of someone who made movies that brought Americans together.

The long-time and always-worth-reading Washington Post economics columnist Robert Samuelson has died.

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Quotation of the Day…

is from page 165 of William Easterly’s hot-off-the-press Violent Saviors: The West’s Conquest of the Rest [footnotes deleted]:

He [Frederick Douglass] saw markets offered a crucial alternative to paternalism. A free labor market, Douglass said, would “let us stand upon our own legs, work with our own hands, and eat bread in the sweat of our own brows.” Douglass told white philanthropists that market participation by the former slaves was “the best way to help them,” which “is just to let them help themselves.

DBx: Douglass was correct. Yet today, many well-meaning people – either ignorant of economics or too clever with economics-textbook models and careless with data – support the likes of minimum-wage legislation, occupational licensing, and special privileges for labor unions as means of helping ordinary workers. These people’s tunnel vision allows them to see only the workers who are benefitted by these labor-market restrictions; these people’s tunnel vision blinds them to the workers who are harmed.

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Supporting Cafe Hayek

Several of you have asked me how you can support Cafe Hayek. I very much appreciate your offer.

I do Cafe Hayek as a labor of love – love for myself (I vent my spleen!) and love for economics and liberty. You’ll notice that there are no ads on Cafe Hayek. I get paid nothing beyond my psychic rewards to do this blog. But if you’d like to help, please do make a contribution to the Mercatus Center.

You can do so by going here.

And, if you like, you can click on “Add comment” to specify that your contribution is in appreciation for Cafe Hayek.

Thanks everyone. Merry holidays and a very happy 2026!

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Some Links

Roger Pielke Jr. explains that “insurance companies are making record profits off climate change panic, not facts.” Three slices:

Defenders of high premiums say it’s because it’s much more expensive to insure homes because of climate change.

But the recent spike in insurance prices is much more likely due, in significant part, to political requirements across the industry that financial companies consider “climate risk,” and the corresponding suite of risk modelers established to meet the newly ­created demand.

…..

These requirements resulted in the creation of a new cottage industry — “climate risk” vendors who promised the ability to produce computer models that accurately quantify the effects of climate change on extreme weather and risks of financial loss faced by individual properties.

Yet the science behind such bold promises has been called into question. For instance, one climate scientist warned, “A lot of these bold, hyperlocal claims are greatly outpacing the science.” A model vendor warned similarly, “It’s a Wild West right now.”

Such concerns have been validated by a new study of 13 different climate risk vendors undertaken by the Global Association of Risk Professionals (GARP) on behalf of the Climate Financial Risk Forum.

…..

Insurance companies have spent many decades estimating risk. Perhaps regulators should allow them to come to their own conclusions, rather than insisting they use dodgy science and charge customers even more.

Here’s Scott Lincicome on Michael Green’s recent claim that American households today with less than $140,000 in annual income are poverty-stricken. A slice:

Green’s piece elicited sharp rebuttals (and online follow-ups) from several economists and pundits, including AEI’s Scott Winship, Cato’s Jeremy HorpedahlGeorge Mason’s Tyler Cowen, substacker Noah Smith, and Reason’s Eric Boehm. And it collapsed under this scrutiny.

First, Green dramatically understated American incomes and wealth. Central to his thesis, for example, is that the median American family makes just $80,000 per year. Yet Horpedahl showed that this figure included single people and retirees, while the actual number for Green’s target demographic—married couples with children—was $132,959 last year. For the median American family with two earners, meanwhile, the 2024 figure was an even higher $142,200. Horpedahl thus concludes:

So already we can see that ~$140,000 is not some mythical number that is unattainable by American families. For the type of family Mr. Green is interested in, half of the families are already at this income level. True, that does mean that half are also below it, but the $80,000 figure he keeps using as a baseline isn’t anywhere near the right number. When he says things like “If one parent stays home, the income drops to $40,000 or $50,000” (from the supposed $80,000 baseline), he is drastically understating the financial situation of a typical family.

Art Carden correctly makes much of this central insight about the freedom to exchange claims to private property rights: “[economic] knowledge does not just exist ‘out there’ waiting to be found and analyzed. It emerges in exchange itself.”

Meredith Kolsky Lewis reaches this sensible conclusion about the pending U.S. Supreme Court ruling regarding the legality of Trump’s punitive IEEPA taxes – a.k.a. tariffs – on Americans’ purchases of imports:

While the outcome remains to be seen, two things are clear. First, if the Court upholds the tariffs, it will represent an unprecedented – and in my view unwise – blank check for the President to impose tariffs with no meaningful guardrails. Second, if the IEEPA tariffs are struck down, President Trump will almost certainly employ other tools at his disposal to impose other tariffs and continue to pressure other countries to negotiate deals to avoid such levies. Furthermore, although a decision striking down the tariffs would require the government to refund payments, it will likely make the process for seeking refunds slow and difficult – e.g. by requiring substantial documentation. Thus, going forward, consumers are unlikely to see lower prices across the board, and importers may still find their inputs facing tariffs, albeit under different legislative authority.

Elizabeth Price Foley and Jason Torchinsky make clear that “disparate-Impact theory is unconstitutional” and that “it purports to combat discrimination but in practice ends up encouraging it.” Two slices:

Disparate-impact theory allows a discrimination plaintiff to prevail based on statistical disparities in outcome, with no need to show an intent to discriminate. The theory appeared nowhere in the 1964 act, but the Justice Department grafted it onto Title VI, which prohibits discrimination by educational institutions and other recipients of federal money, via a 1966 regulation. The Equal Employment Opportunity Commission did the same for Title VII, which bars employment discrimination.

…..

The administration’s rescissions of disparate-impact regulations are laudable, but they won’t solve the constitutional problem. A successor could simply reinstate the regulations; and a few civil-rights laws, including Title VII, authorize such liability. The only long-term solution is litigation challenging disparate-impact liability on equal-protection grounds. Given the justices’ decision in Students for Fair Admission v. Harvard (2023) that racial preferences in college admissions violate equal protection, there’s reason to think a majority would be open to the argument that disparate-impact theory is unconstitutional. As Chief Justice John Roberts observed in another case, “The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”

Rightly appalled by the (anti-)intellectual shenanigans of the likes of Candace Owens, Eva Terry describes “the true toll of conspiracy theories.”

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Quotation of the Day…

… is from page 104 of Eamonn Butler’s 2021 book, An Introduction to Trade & Globalisation (links added):

Experiments indicate that the more widespread markets are, the more people trust each other (Henrich 2016), giving us grounds for optimism that trade promotes cooperation, understanding and trust between nations too. Studies suggest that trade even promotes fairness and equality, discourages nationalism, defuses ethnic and international conflict and promotes peace (Wright 2018). Trading nations are more likely to share liberal values such as personal and political freedom, the primacy of the individual, minimal coercion, the rule of law, openness and free speech (Butler 2015).

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