… is from page 69 of the 1955 edition of Stuart Gilbert’s translation of Alexis de Tocqueville’s remarkable 1856 masterpiece, The Old Regime and the French Revolution:
No one seemed to have had the faintest inkling that the protector might one day become the master.
Here’s a letter that I sent several days ago to the Washington Post (which was not published there).
Editor:
About its new trade deal with Switzerland, the White House notes that it commits the Swiss to increase their investments in the U.S. (“Switzerland to boost US investment as deal struck to lower US tariffs on Swiss goods to 15%,” November 14). The White House boasts that “this deal with Switzerland” – a country with which the U.S. currently runs a trade deficit – “will put us on a path to eliminate that deficit by 2028.’’
Facepalm.
Forget that in our world of more than two countries a U.S. trade deficit with any individual country is as economically meaningful as is Mr. Trump’s “trade deficit” with his dentist. Instead recognize that, to invest more in the U.S., the Swiss need more dollars to do so. To get these dollars, the Swiss will spend fewer dollars buying U.S. exports. And so by promising to increase their investments in the U.S. the Swiss promise to increase – not to decrease, and much less to eliminate – Switzerland’s trade deficit with the U.S.
It’s painful to encounter this administration’s unalloyed ignorance of the basic realities of international trade.
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
Contrary to Mr. Trump’s famous promise, you don’t hear many people saying they’re tired of all the winning. According to the Real Clear Politics polling average, nearly 6 in 10 Americans think the country is headed in the wrong direction. That’s a recipe for a GOP wipeout in November 2026. If current trends continue—although given the left’s penchant for insanity, that’s no guarantee—expect a Democratic return to the White House in 2029.
So what are Republicans going to do about it? What can Mr. Trump do? He can start acting like a traditional, pro-growth Republican. Pivot to the party’s historic supply-side strength. Ditch the populist mumbo jumbo about tariffs, subsidies and redistribution. Stop trying to jawbone the Fed on interest rates. Americans don’t want welfare. They’ve never wanted it. They want to work and take care of their families. And they’re smart enough to know that having everything in their shopping carts say Made in the USA isn’t necessarily a good deal.
Voters—that is, adults—want a growing economy that keeps inflation at bay and creates opportunities for work and investment. That’s all they’ve ever wanted from Washington. Republicans across the country should focus on shrinking the government and promoting economic dynamism. Instead of trying to buy voters with mailbox money, let people keep more of their weekly paychecks.
Peter Earle is no fan of the 50-year-mortgage scheme.
GMU Econ alum Alex Salter is correct: “The Fed doesn’t determine the price of credit. Markets do.”
GMU Econ alum Dominic Pino – now a columnist for the Washington Post – ponders what’s happening in Japan and then explains that “America urgently needs entitlement reform and economic growth.” Here’s his conclusion:
To avoid falling into Japan-style arrangements, the U.S. is going to need to reform its entitlement programs and continue to grow its economy. Japan isn’t a model for how to deal with a debt problem. It’s a warning of what will happen if it continues to go unaddressed.
Jeffrey Blehar isn’t surprised that Trump and Mamdani hit off with each other so well.
GMU Econ alum Dave Hebert compares tariffs to import quotas.
[E]ven when a $1 reduction in imports doesn’t lead to a $1 reduction in exports, as is often the case when there are no or few restrictions on international capital flows, the basic symmetry nevertheless holds: Artificial barriers to imports inevitably create artificial barriers to exports and to inflows of foreign capital. Concretely, this means that if the United States raises tariffs, some US firms and their workers will pay a price as the demand for their outputs will fall. Capital and labor in the United States will shift from industries in which Americans have a comparative advantage to less productive ones in which Americans have a comparative disadvantage. And this reallocation of US resources will occur regardless of whether foreign countries respond to US tariffs by retaliating against US exports.
DBx: Yes.
NatCons and other protectionists will respond with sneering assertions that ‘elite’ intellectuals don’t know what they’re talking about and are out of touch with reality. These protectionists mistake their uninformed, unreflective, and superficial impressions of trade – impressions mixed with fantasies – for knowledge of how trade works. Some of these protectionists will even quote Adam Smith, David Ricardo, or Alfred Marshall (selectively, of course) to create the false impression that these protectionists are informed – indeed, more informed (in their telling) than are the “neoliberal” or “market fundamentalist” economists who (again in the protectionists’ telling) are driven by their study of economic theory and history to have “blind faith” in free trade.
This accusation by protectionists is akin to a witch doctor contemptuously dismissing the counsel of an experienced physician – a physician with an MD from the Johns Hopkins University School of Medicine – by calling this physician a faith healer. “Ignore the MD,” the witch doctor advises the patient, “he’s blinded by dogma. Pay attention instead to me for I’m the one with true and deep knowledge of how to improve your health.”
Here’s a response to a reply from a “proud Trump man.”
Mr. McKinney:
You write that I “and other market fundamentalists don’t get that economic freedom should be judged on how good it is at boosting traditional families like those which Made America Great following the war. If it won’t do this, government has got to step in, like President Trump thankfully is doing.”
I couldn’t disagree more, but I’m in no mood to offer a lengthy reply. I’ll simply share with you an observation from 1856 by Alexis de Tocqueville, with which I heartily concur: “The man who asks of freedom anything other than itself is born to be a slave.”*
I despair that so many of my fellow Americans – on the left, and now increasingly also on the right – are behaving as if they are born to be slaves.
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* Alexis de Tocqueville, The Old Regime and the French Revolution, Stuart Gilbert, trans. (Garden City, NJ: Doubleday Anchor Books, 1955 [1856]), page 169.
It wasn’t surprising to see complaints about the agreement from labor groups and other economic isolationists. But large business organizations emphasized the gains it has produced for Americans. The Business Roundtable, a group of over 200 CEOs, noted that “trade with Canada and Mexico supports 13 million American jobs today.” Since July 2020, “Canada and Mexico have invested $775 billion in the United States and there has been a 50 percent increase in two-way trade, totaling $1.9 trillion in goods and services.” The group pointed out that “all three countries have experienced steady economic growth, but the United States has grown faster than Canada and Mexico.”
The U.S. Chamber of Commerce commented that U.S. producers “export more made-in-America manufactured goods to our North American neighbors than they do to the next 12 largest export markets combined, and the two countries purchase one-third of all U.S. agricultural exports.” In a separate Nov. 12 document, the National Association of Manufacturers called the USMCA “the most pro-U.S. manufacturing trade agreement in history.” It has also called the USMCA “a core driver of the global competitiveness of manufacturers in the U.S.”
Tariffs are meant to reduce imports, and it seems that tariffs on toys are having that effect. Total U.S. toy imports fell by 31 percent in June 2025 compared to the same month a year earlier, after a year-over-year drop of 28 percent during May, according to data from The Toy Association.
The tariffs are affecting toys from other countries, too. Nintendo, the Japanese video game maker, announced in August that it would raise the price of its Switch gaming console by 15 percent in the United States. Officially, Nintendo said it was responding to “market conditions,” but the decision was seemingly in response to the Trump administration slapping 15 percent tariffs on Japanese imports. (Trump has also imposed a 20 percent tariff on imports from Vietnam, where Nintendo does much of its manufacturing.)
Eric Boehm explains that Trump’s grinchly tariffs are likely to raise the prices of toys. A slice:
Thanks to higher tariffs and other disruptions to global trade, some toys might be more expensive this holiday season. Others might be in short supply, and those that arrive from foreign countries by mail could come with a surprise nastier than a stocking full of coal: an expensive tax bill from the U.S. government.
To the average toy buyer, higher costs are the most visible impact of President Donald Trump’s tariffs, which are taxes applied to goods that enter the United States. Imports from China, where many basic toys and games are made, are now subject to a 30 percent tariff. Unlike during Trump’s first term, when many toys and other basic household items were exempted from the higher tariffs on Chinese goods, there are no carve-outs this time.
Brad Hargreaves argues that “a 50-year mortgage wouldn’t fix our housing problem.”
US District Judge James Boasberg’s decision not to force Meta to divest Instagram and WhatsApp fits a broader pattern of American legal reasoning. Whatever Meta once was, the court said, it now competes directly with YouTube and TikTok in the booming short-video market. When TikTok was banned in India and briefly in the United States, users simply flowed to Meta’s apps instead. In a sector where consumer habits flip every few years and product categories blur, “personal social networking” is no longer a meaningful boundary.
For aspirational trustbusters, such mercurial consumer behavior highlights their inability to grapple with economic dynamism—the Schumpeterian churn in which new firms rise, old advantages erode, and incumbents survive only by reinventing themselves. Silicon Valley isn’t a landscape dotted with durable, fat-and-happy monopolies resting on turn-of-the-century laurels. Rather, it’s a perpetual-motion machine of copying, leapfrogging, and panic-driven launches of new features and functionality. And AI is scrambling the supposedly immutable hierarchy of “forever companies” again. Business innovation, not government intervention, is doing most of the competitive heavy lifting.
That dynamism also undermines the antitrust movement’s narrative of stagnant “gatekeepers.” Apple and Amazon still face lawsuits, but they may benefit from the same time lag, with the latter’s trial scheduled for 2027. By that time, market definitions, user behavior, and technological architectures may look nothing like the ones regulators drafted into their complaints. As one scholar told The Washington Post, antitrust litigation moves like an ostrich while the market races like Formula One. And if that’s the case, now add an artificial-intelligence jet engine to the F1 speedster.
Nicholas Kristof tweets about evil ICE agents: (HT Scott Lincicome)
In rural Yamhill County, Oregon, ICE agents seized a 17-year-old boy during his lunch break at McMinnville High School. They reportedly smashed a car window, with the broken glass injuring another student, dragged the boy out and took him to a detention center in Portland, an hour away — and then discovered that he was a US citizen, as he had said all along. The family has started a fundraiser for legal expenses.
… is from Colin Grabow’s excellent October 2023 paper, “The Reality of American ‘Deindustrialization’”:
Although superficially worlds apart, there is little functional difference between manufacturing work being transferred to a worker in another country or to a robot or advanced machine on American soil. Both are properly understood as productivity drivers that lie at the root of prosperity. Through such productivity enhancements, the United States reduces the cost of producing goods and raises its standard of living.
DBx: Indeed so.
Pictured above is a modern example of labor-saving technology. People specialize at producing goods for which they have a comparative advantage and then feed some of those goods into the above-pictured machine. This machine then transforms those goods into other goods for these people to consume – other goods that would have taken these people more time and effort to produce.
Here’s another letter to a long-time hostile correspondent who continues to style himself “proud Trump man.”
Mr. McKinney:
Sharing with me this recent Truth Social post by Pres. Trump, you crow that I “can’t argue against the man’s success!!!!”
Perhaps not. But I can argue against fallacies that create the illusion of success. I have mainly in mind this whopper from Trump: “We are taking in TRILLIONS of Dollars in Tariffs and Investment Dollars from foreign lands because of Tariffs.”
Well.
Erica York, Huaqun Li, and Aleksei Shilov of the Tax Foundation estimate that Trump’s tariffs will this year raise an additional $158.4 billion in revenue. Let’s assume, contrary to fact, that all of this revenue is paid by foreigners. Let’s also be exceedingly generous and increase this figure by 50 percent, to $238 billion. So that’s $238 billion in customs revenue; alas, it’s only a fraction of “TRILLIONS.” Therefore, to get to “TRILLIONS” (meaning at least two trillion dollars), the amount of “Investment Dollars from foreign lands because of tariffs” (by which Trump means foreign direct investment) must therefore be at least $1.76 trillion. Is it?
In the first half of 2025, inward foreign direct investment (FDI) was $145 billion. Let’s again be exceedingly generous and assume that FDI in the second half of 2025 will be triple this figure, coming in at $435. That would mean that FDI for all of 2025 would be $580 billion. $580 billion in FDI added to $238 billion in customs revenue gives us a sum for 2025 of $818 billion. This sum isn’t even half of what it would have to be if Trump’s boast of “TRILLIONS of Dollars in Tariffs and Investment Dollars from foreign lands” were accurate.
You’ll protest, insisting that Trump is taking into account projected future customs revenue. Fine. Let’s look at some credible projections.
The Yale Budget Lab projects that customs revenues will sum, over the eleven years 2025-2035, at most to $2.6 trillion. Benn Steil estimates that Americans – both as importers and, mainly, as consumers – will pay 75 percent of these revenues, or $1.95 trillion of them. That leaves only $650 billion in customs revenues over eleven years coming in “from foreign lands.” That’s far from “TRILLIONS.”
The bad news for Trump’s boast doesn’t end there because the tariffs will reduce U.S. economic growth, thus causing Americans’ real incomes to be lower than otherwise – and, not incidentally, also nullifying any gains that Americans might reap from whatever increased FDI Trump’s tariffs manage to attract. The Yale Budget Lab predicts that, as a result of the tariffs, “in the long run, the US economy is persistently -0.4% smaller, the equivalent of $125 billion annually in 2024$.” Over a decade, that’s lost income of $1.25 trillion, a figure that swamps the $650 billion that these tariffs are projected to raise from foreigners in that same time.
Trump’s tariffs will inevitably make us Americans poorer than we’d be without the tariffs. A great pity is that Trump, like you and all other sincere protectionists, is so benighted and bedazzled by his fundamentalist protectionist faith that he cannot see that a people do not gain greater access to goods and services when their government obstructs their access to goods and services. He’s blind to the fact that his act of obstructing our access to goods and services makes us, not richer, but poorer. His blindness, alas, is our heavy economic burden.
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
Overemphasizing the Iroquois influence on American political thought might be forgivable if Burns were offering his audience a menu of those influences for context and just got excessively enthusiastic in boosting one of them. But he does nothing of the sort. Instead, his presentation strips the revolutionary generation of nearly all of their other influences, aiming instead to shear them from their cultural and intellectual heritage. He brings out a historian to argue specifically that the universalist language of the revolution about the rights of man severed its connection to their English roots — roots that Burns seems very eager to downplay. That gives the audience no context in which to evaluate his ode to the Iroquois example.
While there is time to discuss the Haudenosaunee, there’s no mention of Magna Carta or the Glorious Revolution. No time is given to Locke or Montesquieu, or to the ancient Greek democracies or the Roman Republic, the birth and death of which fixated the Founders (hence, the popularity of Joseph Addison’s 1713 play Cato. There’s nothing on the Mayflower Compact or the 1619 founding of the Virginia House of Burgesses, both made by men who had doubtless not yet heard much if anything about Native Americans in upstate New York. The Founding Fathers are extracted entirely from the context of the English political culture, the Scottish Enlightenment, and the classics.
You can’t make this mistake by accident. Few people in history have left behind a richer record of what they were thinking than the American Founders. They debated, in closed sessions and open newspapers and pamphlets, the drafting and ratification of 13 new state constitutions (14, counting Vermont’s 1777 constitution as an independent republic), the Articles of Confederation, and the ultimate federal Constitution. James Madison took copious notes at Philadelphia in 1787, which were published after the death of everyone involved.
…..
Why does Ken Burns wish his audience to believe untruths about the American Founding? To be fair, there is plenty to like in the first episode. It’s hard not to tell an inspiring story in covering this material. Burns is a skillful storyteller backed by a star-studded voiceover cast, including Paul Giamatti and Laura Linney reprising the voices of John and Abigail Adams. Onscreen, we hear from many distinguished historians. But he just can’t seem to resist the temptation to tell a story that is fashionable with the enemies of the American Founding rather than one that is true.
Brian Albrecht reveals the efficiency of inefficient taxes. A slice:
I want to go through two economic models that explain why voters prefer “inefficient” taxes. The first, from Gary Becker and Casey Mulligan, argues that inefficient taxes create political resistance that keeps rates low. The second, my own take on a model from David Friedman’s work on punishment, argues that inefficient taxes prevent the state from becoming too aggressive in extraction.
Think of taxation as a conflict between the state trying to extract and taxpayers trying to resist. The Becker-Mulligan model focuses on the defender: inefficient taxes hurt enough to keep taxpayers vigilant and politically mobilized. That’s the demand side of policy. The Friedman model focuses on the attacker: inefficient taxes make enforcement unprofitable, so the state backs off. That’s the supply side of policy. Both models give political economy reasons for why we see so little “efficient” taxation.
Trump’s redistribution venture arrives at a moment when the UBI plot has been embraced by the UN and the World Economic Forum. Numerous US states have engaged in pilot projects, generally deemed “successful” from the progressive nanny-state perspective. The rise of AI is now the dominant excuse for implementing UBI.
A tariff-based dividend accelerates this trend, but is even worse in the novel way it weaponizes regulation itself. Instead of responding to an external shock like COVID or the 2008 financial crisis, Trump’s tariff dividend “responds” to a purely self-inflicted wound—disruptions and higher prices caused by trade barriers.
The lesson progressives are learning is not merely to “never let a crisis go to waste.” It now extends to engineering their own crisis levers: using general tax receipts to justify stipend checks, as in the past, while also “entrepreneurially” tweaking trade barriers to generate “revenue” and distribute checks.
Trump has just delivered to progressives a turnkey mechanism for a future “American People’s Dividend” indexed to whatever priority Washington wants to manipulate—climate, equity, public health, or industrial policy. Does anyone think they’ll refuse this gift?
DeWine does not speak ill of today’s president. Some unspoken inferences are, however, unavoidable. Nationally, there are more than 400,000 unfilled manufacturing jobs, while ICE warriors, dressed for combat on Iwo Jima, swarm U.S. communities, deporting workers.
Jess Coleman tweets: (HT Scott Lincicome)
It still blows my mind that Jim Crow-era zoning laws—even literal bans on multi-family housing in wealthy neighborhoods—somehow got rebranded as progressive regulation.
… is from page 263 of Thomas Sowell’s 1999 book, Barbarians Inside the Gates:
Everything has its good points. Even poison is non-habit forming.
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