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… is from page 177 of my GMU Econ colleague Mark Koyama’s, and his co-author Jared Rubin’s, superb 2022 book, How the World Became Rich :

People living in wealthy countries who are at the bottom of today’s income distribution are better off on most fronts than almost everyone who ever lived prior to 300 years ago.

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Regardless of your assessment of the merits and demerits of the U.S.-Israeli bombing of Iran, that bombing raises the real risks faced by commercial shippers. This reality should be reflected in higher insurance rates paid by those shippers. Yet predictably – as Tad DeHaven here points out – Trump is now trying to mask this reality by using taxpayer dollars to subsidize commercial-shippers’ insurance polices. A slice:

Trump’s declarations routinely begin as sweeping assertions of personal control that immediately cause one to ask, “Can he do that?” That fundamental question then spawns a stream of additional questions as his subordinates maneuver to piece together something that resembles the president’s dream. If the DFC can’t be turned into a universal war insurer, the administration will hunt for a substitute that sounds close enough—probably something more narrow, conditional, and bureaucratic than what the president initially claimed.

That’s how you end up with government by improvisation, where the public is supposed to treat the revised and less fantastical version as proof that Trump’s original pronouncement was true—and where the legal and accountability questions keep accumulating because the governing style relies on answering them after the fact.

George Will makes a case that the U.S. president has, and should have, the authority to make war as Trump is now doing in Iran. [DBx: Conversations over the past few days with colleagues and friends who I respect have caused me to question that which I long did not – namely, Congress must pre-approve the use of military force. Will’s column contributes positively to this pondering.] Two slices:

Surprise is a substantial military asset. If the Trump administration had briefed legislators in advance, could it have achieved the targeted killings crucial to its regime decapitation objective — an objective intended to economize violence?

…..

For decades, this column has been a tireless — to some readers, a tiresome — critic of the swollen, often lawless, modern presidency. Now more than ever it is urgent to regard executive power as, in Daniel Webster’s words, “a lion which must be caged.” But conditions, threats, and capabilities change, so moral and political imperatives do, too. Changes in modern circumstances, including technologies, often strengthen, if not the argument for, then the opportunity for, executive unilateralism.

Eric Boehm argues that “Trump’s newest tariffs are an ‘exercise of completely unrestrained executive power.'” A slice:

Last week, for example, conservative legal analyst Andrew McCarthy wrote in National Review that Trump’s Section 122 tariffs are illegal because they do not meet the preconditions outlined in the law.

As McCarthy and others have noted, Section 122 allows presidents to impose tariffs of up to 15 percent for up to 150 days to “deal with large and serious United States balance-of-payments deficits.” The United States does not currently have a balance-of-payments deficit with the rest of the world, and the Trump administration’s attempt to invoke this law in response to trade deficits ignores the law’s plain language.

Indeed, Trump’s attorneys even admitted as much during the legal battles over the IEEPA tariffs. When that case was before the U.S. Court of Appeals for the Federal Circuit, the administration’s lawyers pointedly noted that balance-of-payments deficits are “conceptually distinct” from the trade deficits and admitted that Section 122 would not apply.

In the lawsuit filed Thursday, the states’ attorneys note the federal government’s response in the previous lawsuit. When it comes to Section 122, they argue, Trump has not identified “any actual justification permitted” by the law.

“The President cannot meet the statutory requirements of Section 122, and his effort to impose tariffs under this statute is unlawful,” the states argue.

Also writing about the legal challenges to Trump’s latest round of tariffs is Ilya Somin.

Well, whaddaya know?! Beijing’s economic interventions are making China’s economy weaker – so reports the Editorial Board of the Wall Street Journal. A slice:

Various trade-in programs to subsidize household upgrades of everything from appliances to mobile phones haven’t triggered a durable shift toward greater domestic consumption. And now Beijing has cut the budget on those subsidies in the latest fiscal plan.

China’s economy can still grow despite these policy failures. And its relatively closed financial system allows it to avoid financial panics or crashes if its plans don’t work. Foreigners will continue to visit China and be impressed by corners of the economy that are working—some of which, such as AI, pose serious strategic challenges to the West.

But the Chinese economy isn’t the juggernaut of Communist myth that America should emulate. Its top-down model of political control is leading to slower growth and fewer gains for the working class.

This letter in today’s Wall Street Journal by Jeffery Wyant makes an excellent point. A slice:

The Northeast’s cost of LNG could be reduced by as much as half if the Jones Act were rescinded (“U.S. LNG Exports to the Rescue,” Review & Outlook. March 3). This 1920 law requires all cargo from one U.S. port to another U.S. port to be shipped on U.S.-built, U.S.-flagged and U.S.-owned vessels—crewed by Americans. Since no U.S.-built ships are large enough to ship LNG to the Northeast efficiently, LNG must be imported from terminals overseas.

To save nonexistent U.S. shipbuilding and crewing jobs, millions of households in the Northeast pay much higher electricity bills than if LNG were shipped directly to the Northeast from the LNG export terminals in Louisiana and Texas.

Arnold Kling ventures some guesses about what AI will bring in 2026.

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… is from page 103 of Historical Impromptus, a 2020 collection of some of Deirdre McCloskey’s work on economic history; this quotation, specifically, is from McCloskey’s 2000 review, in the Minnesota Journal of Global Trade, of Thomas Friedman’s The Lexus and the Olive Tree and John Gray’s False Dawn:

The capitalist deal is: Let me make profits and I’ll make you rich.

DBx: Yep. And despite endless bleating and spilt oceans of ink to the contrary, it’s a darn good deal. If you doubt it, walk into a Kroger or Walmart, or visit Amazon.com, or observe the HVAC unit in your home or workplace. Ponder these apparently mundane realities and ask yourself: Where does all this stuff come from?

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Here’s a letter to the San Antonio Express-News.

Editor:

About the tariffs that President Trump recently imposed under section 122 of the Trade Act of 1974, you report that “Trump has said the tariffs are essential to reduce America’s long-standing trade deficits” (“More that 20 states sue over new global tariffs Trump imposed after his stinging Supreme Court loss,” March 5). Trump does indeed make this claim. However, either he clearly doesn’t believe it, or – if he does believe it – it reveals an ignorance of trade so profound that it cannot serve to justify these new tariffs.

Trump often brags that he uses his tariff-making power to prod foreigners to invest more in America. Because any such increased investment increases America’s trade deficits, Trump’s claim that he needs tariff-making power to reduce America’s trade deficits is wholly inconsistent with his frequent boast about needing tariff-making power to increase foreign investment in America.

In short, Mr. Trump’s express desire to have tariff-making power in order to entice more foreign investment to America belies his claim that he needs tariff-making power to reduce America’s trade deficits. If the courts understand, as they should, that to use tariffs to prod foreigners to invest more in America is to use tariffs to increase America’s trade deficits – and if they further presume that Mr. Trump is acting rationally – they must conclude that the administration’s assertion that it needs tariff-making power to decrease America’s trade deficits is a ruse.

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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Phil Magness is correct: “The Supreme Court has just invalidated Trump’s tariff agenda. But the economics were already doing that.” Two slices:

Trump’s tariffs were justified on a series of claims about trade deficits, manufacturing revival, foreign countries paying the bill, and the mass economic benefits tariffs would supposedly generate. One by one, each of these claims has collided with empirical reality. The Court’s decision, therefore, does more than resolve a statutory dispute: it marks the collapse of a narrative about tariffs that had already unravelled under scrutiny.

The path to the Court’s ruling began in March 2025, when President Trump advanced a novel legal theory: that the United States faced an international “emergency” caused by its trade imbalance, defined as the country importing more goods and services than it exports. Trade deficits of this kind, however, have been the norm in the United States since the mid-1970s. What had long been treated as a feature of a globally integrated economy was suddenly reclassified as a national emergency.

On that basis, the administration argued that the IEEPA—originally designed to address foreign threats and sanctions—granted the president authority to “regulate” international commerce by taxing international trade. Tariffs, the argument went, were simply one tool of regulation. Starting with the so-called “Liberation Day” orders issued in April 2025, the administration then implemented sweeping tariffs. These orders were revised, expanded, and recalibrated over the following months, effectively rewriting large parts of the US tariff schedule through executive action.

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The “big three” producers in the US car industry—as well as foreign companies that operate plants inside the United States, such as Toyota and Mercedes—have all faced substantial hits. The total price tag for Trump’s tariffs in the automobile sector is currently estimated to be in the tens of billions of US dollars range. Many of these companies have faced higher costs on imported parts and raw materials, even though they were already producing their finished products in the United States.

Here’s GMU Scalia Law professor Ilya Somin on the court order to repay the unlawfully collected tariffs. A slice:

Stepping back from the more legal issues, I would note that the Trump Administration can easily resolve the refund issue simply by giving up this legal fight and issuing refunds to all those forced to pay the illegal tariffs. That would not be hard to do. The government has a record of all the payments and who made them. Calculating interest also is not difficult. The government could just make electronic payments or send checks to all those entitled to them.

Ultimately, the government illegally seized billions of dollars and therefore must pay them back. If I unjustly and illegally take your property, I have a duty to give it back, and pay interest. The same principle applies when the federal government does it. You don’t have to be a legal theorist or a tariff expert to grasp this simple point.

“If you’re a New Yorker in trouble with the law, it might soon be impossible for you to consult your favorite chatbot for legal advice” – so reports Reason‘s Jack Nicastro.

The Editorial Board of the Washington Post is understandably fed up with the unserious Kristi Noem. A slice:

It’s embarrassing that Congress can’t agree on common sense reforms for Immigration and Customs Enforcement to end the partial government shutdown. It might be more embarrassing that the department’s boss doesn’t make much of an effort to act like a responsible steward of that funding.

Walter Olson writes that “we’re not out of the woods on the law firm revenge orders.”

George Leef reviews Lawrence Eppard’s, Jacob Mackey’s, and Lee Jussim’s The Poisoning of the American Mind.

Regardless of your assessment of the wisdom or wantonness of the recent U.S-Israeli bombing of Iran, you surely should have no laments that the evil Ayatollah Khamenei is now no more. Here’s a slice from Jeff Jacoby’s latest column:

Why were Iranians rejoicing? Because for nearly four decades, Khamenei made their lives a waking nightmare. He imprisoned women for showing their hair, hanged gay men in public squares, executed dissidents by the thousands, and ran Evin Prison — where rape and psychological torture were standard practice — as an instrument of state terror.

When 22-year-old Mahsa Amini died in custody in 2022 after being arrested for wearing her hijab improperly, and millions took to the streets in protest, he responded by killing more than 500 of them and imprisoning 22,000 more. When a fresh uprising erupted this past January, he massacred tens of thousands.

Arnold Kling makes the case that “banning social media for children and teens is a FOOL’s errand.”

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… is from page 375 of the original edition of Walter Lippmann’s sometimes deeply flawed but profoundly insightful and still-important 1937 book, The Good Society:

It is just here, I submit, that the ultimate issue is joined, on the question of whether men shall be inviolable persons or as things to be disposed of; it is here that the struggle between barbarism and civilization, between despotism and liberty, has always been fought. Here it must still be fought.

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Wall Street Journal columnist Jason Riley decries the transformation of so many American schools into what he describes as “laboratories for esoteric ideological projects, not centers of learning.” Two slices:

Far too many children are still assigned to substandard schools, and too many remain unable to read or do math at grade level. Meanwhile, educators and policymakers seem preoccupied with nonsense like helping students “transition” behind their parents’ backs or indoctrinating impressionable youngsters with social-justice poppycock to promote trendy political causes. American kids are outperformed by their foreign peers on international exams while we have to concern ourselves with whether school libraries make sexually explicit texts available to third-graders.

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Critics of selective public schools claim that they serve too few minority students, divert resources from traditional schools, and exacerbate racial and economic achievement gaps. Yet the Manhattan Institute’s assessment found that at least a third of the students at selective high schools in Chicago come from low-income families, and Chicago Public Schools spend thousands more per student on nonselective schools.

Almost “70% of all students at selective enrollment schools are black and Hispanic,” according to the study’s author, Rene Mukherjee. And the “black-white, Hispanic-white, and low-income-non-low-income achievement gaps” in math and English test scores “are, on average, significantly smaller at the city’s eight top selective enrollment high schools than at CPS overall.”

We should be replicating successful school-choice models, not thwarting them. When will concern about the educational advancement of all kids reach the level of concern for their preferred pronouns?

Scott Winship offers an update on the earnings of young men in America.

Samuel Gregg dives into “a deep history of America’s tariff wars.” A slice:

Few figures better epitomised protectionism’s ascendency in Postbellum America than President William McKinley. When he ran for president in 1896, McKinley described himself as ‘a tariff man standing on a tariff platform’. Indeed, McKinley had been consistently in favour of tariffs from the beginning of his political career as an Ohio Congressman in 1877 until his assassination on 14 September 1901. Protectionism, according to McKinley, was about giving American businesses, especially manufacturers, a price advantage in US domestic markets as they competed against goods produced by foreign companies. For McKinley, this was one way to promote American prosperity. His dedication as a member of Congress to the protectionist cause resulted in the passing of what came to be called the McKinley Act of 1890. It raised the average tariff on imports from 38 per cent to an astonishing 49.5 per cent.

This is not to suggest that Postbellum protectionist designs went unchallenged. For example, Grover Cleveland – the first Democrat to be elected president after the Civil War – sought to reduce the tariff rate and restrict the use of tariffs to the raising of revenue. There was also considerable intellectual opposition to protectionist policies. In his 1888 book The Tariff History of the United States, the Harvard economist Frank Taussig looked closely into the political dynamics shaping US tariff policy. He found a steady pattern of ‘manipulation of the tariff in the interest of private individuals’, despite increasing hostility to tariffs throughout much of the United States. Though Taussig found no tangible evidence of bribery, he did stress that ‘contributions to the party chest are the form in which money payments by the protected interests are likely to have been made’. Taussig also argued that ‘some Congressmen thought it not improper to favour legislation that put money in their own pockets, and that many thought it quite proper to support legislation that put money into the pockets of influential constituents’.

High tariff policies suffered major setbacks in America in the 1900s. The establishment of today’s federal income tax via the Sixteenth Amendment and the Revenue Act of 1913 obviated the need for tariffs as a source of revenue. But protectionism also fell into disrepute because of growing awareness of the cronyism and the long-term diminishment of competitiveness that is inevitable with protectionist policies.

Hannes Gissurarson writes wisely about free trade.

Arizona State University economist Domenico Ferraro writes wisely about economics. Two slices:

Few ideas have done more to distort Western political and economic thinking than the claim, most famously popularized by Karl Marx, that economic life is a permanent power struggle among “classes.” In this account, societies are defined not by cooperation, exchange, or mutual gain, but by irreconcilable conflict between groups locked in a zero-sum contest over resources.

The durability of this belief is striking. It behaves less like a serious analytical framework than like an intellectual contagion — periodically receding, only to return with renewed force. It cuts across political, religious, educational, and demographic lines, appealing as readily to populists on the right as to progressives on the left. Even in the 21st century, the language and logic of class struggle remain deeply embedded in public debate.

This worldview has been, is, and will continue to be a serious obstacle to economic understanding and sound policy. It is corrosive, not merely mistaken. Its survival has helped fuel today’s political polarization, eroding the capacity for compromise and further displacing pragmatic problem-solving with moralized struggle.

Its most recent expression appears in policy arguments favoring tighter immigration controls, greater trade protection, and renewed enthusiasm for industrial policy. These ideas now attract bipartisan support, though in different forms. At their core, at least so far as economic thinking is concerned, lies the lump-of-labor fallacy: the belief that the number of jobs in an economy is fixed, so that employment gains by foreigners must come at the expense of domestic workers. This zero-sum reasoning mirrors the Marxian class-conflict narrative, which treats economic relations as a struggle over a fixed surplus, not a process of value creation.

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What is so often presented as a grand ideological struggle among classes — workers versus capitalists, domestic versus foreign workers, domestic producers versus foreign ones — is largely a political sideshow. It flatters our instinct for blame, fuels social tensions, and reliably produces bad policy and, unfortunately, successful political careers. Sound economic reasoning that emphasizes incentives, institutions, and human cooperation has raised living standards on a scale unmatched in human history — and can continue to do so. The real threat to prosperous societies is not disagreement or inequality, but the persistence of false narratives that turn economic life into a morality play and politics into permanent combat.

False narratives impede progress by undermining the cooperation increasingly required in a fast-evolving modern economy — one in which team production plays a central role — and by diverting resources from activities that are productive to those that are not.

“The Sanders-Khanna ‘Billionaire Tax’ would make all Americans poorer.”

James Pethokoukis shares Joshua Gans’s insightful critique of a proposal for government to guide AI in a worker-friendly direction.

Damon Root adds his voice to those who take seriously the fact that war-starting power in the U.S. Constitutionally belongs to Congress. A slice:

To understand why this is so, consider the arguments of James Madison, who is sometimes called the “father of the Constitution” because of the important role that he played in the document’s drafting and framing at the 1787 Constitutional Convention in Philadelphia. “The constitution supposes,” Madison explained, “what the History of all [Governments] demonstrates, that the [Executive] is the branch of power most interested in war, & most prone to it. It has accordingly with studied care, vested the question of war in the [Legislature.]”

Matt Ridley, in Britain, tweets:

Not developing our own shale gas reserves has a huge opportunity cost.

It got a lot huger this week.

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… is from page 102 of Historical Impromptus, a 2020 collection of some of Deirdre McCloskey’s work on economic history; this quotation, specifically, is from McCloskey’s 2000 review, in the Minnesota Journal of Global Trade, of Thomas Friedman’s The Lexus and the Olive Tree and John Gray’s False Dawn [original emphasis]:

Well, excuse me, but modern economic growth in its global form has done more for workers and the environment than any army of government inspectors, regulators, customs officers, or IRS accountants. We Americans are rich not because of unions or anti-trust or the Occupational Safety and Health Administration but because on the whole we have let capitalism work.

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As we near the 250th anniversary of the publication of An Inquiry Into the Nature and Causes of the Wealth of Nations, Jim Dorn connects Adam Smith with wise Chinese philosophers.

Tom Savidge offers a brief history of federal transfers to the states.

Question for everyone who wishes to entrust the government with greater power to engineer society: If, because of politics, the government even for a moment leaves its most essential function unfunded, what’s the basis for your faith that government can be counted on to put politics aside when pursuing your social-engineering dream(s)?

The Editorial Board of the Washington Post is understandably down on Bernie Sanders’s and Ro Khanna’s scheme to soak the rich. A slice:

Sanders wants to confiscate 5 percent of all assets every year from America’s billionaires, with the goal of stealing half their fortunes. He estimates, unrealistically, that this could raise $4.4 trillion over 10 years to fund a wish list of progressive fantasies, including something akin to a universal basic income and more government-managed health care.

The socialist’s goal is to make this a litmus test for 2028 Democratic presidential candidates, just as his Medicare-for-all proposal was in 2020. Rep. Ro Khanna (D-California), who has made no secret of his presidential ambitions, will sponsor the House version of Sanders’s bill.

Even for billionaires, a 5 percent tax on every asset they own would virtually wipe out any gains they make in a normal year. No one that rich keeps all their money sitting around in a checking account. They own real estate and make long-term investments that might not pay out for years.

In addition to being unconstitutional, a federal tax on unrealized gains would force people to sell illiquid assets every year. A lot of AI founders, for example, are billionaires on paper, but their shares are effectively worthless until their businesses deliver on their promises and go public.

Shawn Regan reports on how the U.S. government undermined America’s ability to mine so-called “rare-earth minerals” – which aren’t at all rare. A slice:

Despite their importance, however, Mountain Pass is the only rare-earth mine operating in the United States. Nearly all the world’s rare earths are mined and refined elsewhere—mostly in China, which, over the past several decades, has built an industrial empire around the extraction and processing of these materials. China now accounts for about 70 percent of global rare-earth mining and over 90 percent of the refining and magnet production.

That wasn’t always the case. When the Mountain Pass mine opened in 1952, it quickly became the world’s leading source of rare earths, supplying materials for everything from color televisions to the earliest computers. Well into the 1980s, the mine continued to produce the majority of global rare-earth output. But as environmental regulations tightened and costs rose in the U.S., China began dominating the market through a mix of cheap labor, lax standards, and aggressive industrial policy. By the early 2000s, the Mountain Pass mine had shuttered. China controlled nearly the entire supply chain.

That reliance on Beijing is increasingly uncomfortable for Washington and for the industries that depend on these materials. Mountain Pass eventually reopened in 2018 and now produces roughly 47,000 metric tons of rare earths annually—just over 10 percent of global supply. Some initial refining occurs on-site, but most of the material still gets shipped to China for final processing before being sold to manufacturers around the world.

The stakes have only risen. In April, China retaliated to a round of U.S. tariffs by restricting exports of seven rare-earth elements to the United States. In October, Beijing took an even more extreme measure, threatening to curb trade of any minerals or products that contain even trace amounts of those elements. The move rattled supply chains and exposed a hard truth: the world’s most technologically advanced nation now depends on its largest geopolitical rival for the materials that make its most important technologies work.

Uncomfortable questions now confront U.S. policy. How did America lose control of these materials? Can it rebuild its capacity in time? And if it does, can it do so without sacrificing its market dynamism or succumbing to the kind of state-directed industrial policy that too often stifles innovation?

My Mercatus Center colleague Jack Salmon reveals “what history tells us about tariffs and why it matters now.” Two slices:

Into this moment comes a new working paper from two Northwestern University economists, Tamar den Besten and Diego Känzig, which presents a comprehensive empirical study of American tariff policy over nearly two centuries. Published by the National Bureau of Economic Research in February 2026, the paper draws on nearly 200 years of U.S. data from 1840 to 2024 to ask a deceptively simple question: What actually happens to the economy when tariffs go up?

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Using these 21 exogenous tariff events as a statistical instrument (a way of isolating genuine policy-driven variation from noise), den Besten and Känzig estimate how the U.S. economy responds to a tariff shock. Their benchmark is a one-percentage-point increase in the average tariff rate on dutiable imports.

In the authors’ model, the first economic response to tariffs is that imports fall sharply, about 4% on impact, which is precisely what tariffs are designed to do. But the story doesn’t stop there. Exports, after a brief pause, also decline, falling roughly 2% at their trough. The exchange rate appreciates as import demand contracts, which erodes the competitiveness of American goods abroad. Trading partners also retaliate and adjust their own sourcing. The result is a broad contraction in trade on both sides of the ledger, as shown in the authors’ figure below.

Most striking is what happens to domestic production. A one-percentage-point tariff increase leads to a peak decline in real GDP of around 0.9%, a large and persistent effect that continues for at least 8 years after the shock. Manufacturing output, the sector tariffs are most often designed to protect, falls by more than 1.5% at its peak. Real wages for manufacturing workers also decline.

In other words, tariffs do not succeed in their stated goal of shielding American industry. The general-equilibrium effects—higher input costs, a stronger dollar, weaker exports, reduced foreign demand—more than offset whatever protection individual sectors might receive.

This may also largely explain why employment in the manufacturing sector was more than 100,000 jobs below pre-election trends by the end of 2025.

Scott Lincicome tweets:

“Tariffs Force Down Heavy Equipment Sales and Jobs” https://share.google/GOIY8WVZ8P3OA4mrF “it is more economical to build a forklift overseas, import it and pay the tariff”

“multiple layers of tariffs on inputs have made it even more expensive to build machinery on American soil”

My GMU Econ and Mercatus Center colleague Chris Coyne reviews The Kissinger Tapes: Inside His Secretly Recorded Phone Conversations. A slice:

Since Kissinger did not intend his transcripts to be public, the collection is a window both into him as a person and into the operations of the U.S. national security state. Four themes stand out.

The first is the sheer prevalence of systematic deception. For Kissinger, lies weren’t a strategic tool limited to selective uses in international statecraft. They appear to have been part of his personal makeup. Wells notes that he was “a habitual and easy liar.” Throughout the transcripts, he deceives his foreign counterparts, his colleagues, and the media.