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Ben Zycher’s letter in the Wall Street Journal is superb:

Alex Flint and Kalee Kreider admit that ordinary central planning won’t reduce greenhouse-gas emissions. Yet despite “the incredible ingenuity of people and markets,” they suggest a different form of central planning is needed: namely, adaptation in the form of “changing where and how we grow crops, and where people can safely live,” among other government-driven dislocations (“We Can’t Stop Climate Change, So We Need to Prepare for It,” op-ed, Oct. 20). Do Mr. Flint and Ms. Kreider believe people and markets can’t adapt over time without the diktats of officials and experts?

In any case, none of the “dire predictions” to which they allude has come to pass. The purported “safe” limit on warming of 1.5 to 2 degrees Celsius is a political construct. There is no “science” underlying it.

Despite the authors’ assertion that “climate is easy to forecast,” the Intergovernmental Panel on Climate Change models predicting massive temperature increases by 2100 have overstated the satellite temperature record by a factor of more than two. They are driven by assumptions that even the IPCC describes as unlikely.

“Adaptation” driven by central planning will yield more misery.

Andrew Follett reports that “New England’s deep-blue states may become all too familiar with energy rationing and blackouts this winter, courtesy of the region’s overreliance on green energy.” Two slices:

The Northeastern states face an immense shortfall in conventional electrical generation capacity, leaving the power grid extremely vulnerable at times when wind and solar power are offline. This precarious situation is expected to continue for at least the next decade.

“We cannot operate the system in the wintertime without a dependable energy source that can balance the system when the sun doesn’t shine and the wind doesn’t blow. I think policymakers sometimes lose sight of that fact,” Gordon van Welie, president of Independent System Operator (ISO) New England, which manages the region’s power grid, said at a recent energy conference in Washington, D.C.

In order to function, power grids require demand to exactly match supply, which is an enormous problem for variable wind and solar power, as the amount of energy they produce cannot easily be predicted in advance. Wind and solar can burn out the grid if they produce too much — or not enough — electricity, leading to brownouts or blackouts.

…..

Blackouts have previously killed hundreds of New Englanders, especially in the winter. Until New England’s political leaders rediscover the value of reliable power, their citizens will keep paying the price for ideological energy experiments, sometimes with their lives.

Even Bill Gates is cooling his overheated rhetoric on the climate. Two slices:

The climate conformity caucus is breaking up at long last, and the latest evidence is a change of mind by none other than Bill Gates. The Microsoft billionaire turned liberal philanthropist now says the “doomsday view” about the climate is wrong, and “it’s diverting resources from the most effective things we should be doing to improve life in a warming world.”

…..

Now, on the cusp of the latest COP30 climate conclave in Brazil next month, Mr. Gates offers different advice. An essay released on his website promises “three tough truths about climate,” the first of which is that rising temperatures are “a serious problem” but “will not be the end of civilization.”

Wait—this is a hard truth? You mean humanity isn’t doomed? The only people for whom this is a “tough” message are the climate zealots who remain committed to the idea that rising temperatures are a totalizing emergency. They say this to intimidate politicians into giving them billions of dollars in green subsidies, along with other powers to remake the modern economy and society.

Mr. Gates now sounds like Bjorn Lomborg, the “skeptical environmentalist” whose writing often runs in these pages. Mr. Lomborg has been arguing for years that while warming temperatures are a reality, the world’s poor in particular face far more urgent challenges. He believes, as these columns have also long argued, that the best way to cope with rising temperatures is through innovation, adaptation, and policies that continue to spread economic growth and prosperity.

Washington Post columnist Jason Willick reports this unsurprising reality: Democrats have plans to use the increase in discretionary power that the Trump White House is seizing for the executive branch. Two slices:

Democrats will inherit the expansive presidency Trump is modeling and turn it to their own ends.

For an idea of how some members of the Democratic elite are thinking about how to use executive power, see a new report from the Roosevelt Institute, a progressive think tank. The authors interviewed 45 “senior political appointees from the Biden-Harris administration” in agencies including the Justice Department, the Consumer Financial Protection Bureau and the White House Domestic Policy Council. The focus was “lessons learned,” especially on economic policy. One takeaway: Trump’s break-glass presidential model holds significant appeal on the left, including on some surprising specifics.

…..

The Roosevelt Institute report reflects the appetite in influential circles for an executive after Trump who is much more willing to break procedural norms to achieve progressive ends. As one former official said, “The process should support the goal, or you blow up the process.”

This populist, presidentialist vision of governance now seems entrenched in the elites of both parties. Some of the ideas in the report — such as subjecting fewer executive branch officials to Senate confirmation, curbing forum-shopping in lawsuits and creating agency offices in the heartland — might even earn bipartisan support in a populist era.

Jason Sorens writes about amending the U.S. Constitution to require that the government’s budget be balanced.

C. Jarrett Dieterle reports on progressives’ stubborn ignorance of the nature of prices and their resulting on-going efforts to prevent the operation of the price system.

Justin Amash tweets: (HT Scott Lincicome)

“The Constitution vests the power of declaring War with Congress; therefore no offensive expedition of importance can be undertaken until after they shall have deliberated upon the subject, and authorised such a measure.”
—George Washington

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… is from page 88 of Nicholas Bloom’s, Mirko Draca’s, and John Van Reenen’s 2016 Review of Economic Studies paper titled “Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity” (first emphasis original; second emphasis added):

Chinese import competition increases innovation within surviving firms. Firms facing higher levels of Chinese import competition create more patents, raise their IT intensity, and increase their overall level of Productivity. They also increase R&D, management quality and skill levels, and reduce prices and profitability. Second, Chinese import competition reduces employment and survival probabilities in low-tech firms. Firms with lower levels of patents or TFP [Total Factor Productivity] shrink and exit much more rapidly than high-tech firms in response to Chinese competition. Thus, our article jointly examines the effects of trade on survival/selection and innovation. The combined impact of these within and between firm effects causes technological upgrading in those industries most affected by Chinese imports. We focus on China both because it is the largest developing country exporter, and because China’s accession to the WTO enables us to plausibly identify the causal effects of falling trade barriers. However, we also show results for imports from other developing countries, and find a similar impact on technical change. In contrast, imports from developed countries appear to have little or no impact on technology.

DBx: In real-world economies, there are no solutions, only trade-offs. And note here this trade-off: Although protecting this, that, or the other U.S. industry from the competition of imports from China and other developing countries might enhance U.S. national security today, because such protection reduces the innovativeness of the protected U.S. industries, that same protection might well compromise U.S. national security tomorrow.

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Here’s a letter to a student at West Virginia University.

Mr. Ethan Anderson

Mr. Anderson:

Thanks for your email.

Critical of what you describe as “economists’ stubborn disapproval of tariffs,” you ask: “Shouldn’t each case be considered on its own merits, case by case? Obviously sometimes unrestricted imports are good but just as obviously sometimes they are bad. Ditch the bad ones by letting government block them. Just keep the good ones.”

How far will you go to remain true to your premise that Americans’ peaceful spending be superintended by government “on its own merits, case by case”? Would you agree that it’s obvious that sometimes it’s good that people named “Ethan” change the ways in which they peacefully spend their incomes, but that sometimes it’s bad when “Ethans” change their pattern of spending? (After all, for example, if as your income rises you reduce your demand for fast food, you’ll destroy some jobs for some workers in fast-food restaurants.) Shouldn’t each case of “Ethans” changing their spending habits be considered on its own merits? Ditch the bad spending changes by “Ethans” by letting government block them. Just keep the good ones.

My above hypothetical, of course, is ridiculous. No sane person thinks that government officials possess the knowledge and incentives necessary to make a success of such a policy of superintending, case by case, the individual peaceful spending choices of all “Ethans.”

But my hypothetical is no more ridiculous than is yours. It is no more absurd to suppose that government officials can be trusted with the authority to superintended, with the power to override, the individual peaceful spending decisions of “Ethans” than it is to suppose that these same officials can be trusted with the authority to superintended, with the power to override, the individual peaceful spending decisions of all Americans.

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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George Will summarizes several amicus briefs submitted to the U.S. Supreme Court as it prepares to hear oral arguments against the lawfulness of Trump’s IEEPA tariffs; it’s a case that is sure to be one of the most momentous in American history. Two slices:

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… is from page 43 of Charles King’s 2024 book, Every Valley: The Desperate Lives and Troubled Times That Made Handel’s Messiah:

Queen Anne had experienced nearly every moment of her adult life as torture. At her coronation in Westminster Abbey, in 1702, persistent joint pain and stiffness, perhaps the symptoms of lupus, required that she be borne aloft in a chair, her regal train trailing behind the bearers. She carried few of her pregnancies – at least seventeen in all – to term. The children who survived never made it to adulthood. A son, William, the great hope as heir and future king, died of a throat infection at the age of eleven. Her husband and consort, Prince George of Denmark, fell to lung disease and dropsy.

DBx: Ponder this reality. A mere three centuries ago, one of the richest people in the world was arguably materially poorer than is any randomly selected person who is today in the bottom quintile of the U.S. income ‘distribution.’

Yes, Queen Anne had title to lots of land and she lived in a large, richly decorated palace that swarmed with all manner of servants to attend to her desires. But this daughter of a king (James II), sister of a queen (Mary), and then queen herself obviously had many desires that no one then could possibly satisfy – desires such as better medical care.

There’s no way to prove the correctness of what I’m about to say, but if Queen Anne (say, at the age of 30) were given the option of living her royal life as and when she did, or – having been accurately informed of what the American economy would be like in 2025 – transported three centuries into the future into some randomly selected economic position in 2025 America, it’s a good bet that she’d have chosen the latter.

Anne Stuart of 5133 Kensington Dr., Carmel, Indiana, married to George, with three children and their first grandchild soon to be born – and living in 2025 on an annual income of $73,000 – is vastly wealthier than Anne Stuart of Kensington Palace 320 years ago.

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Here’s a letter to a long-time valued correspondent and reader of my blog.

Steve:

Thanks for your thoughts on Jeff Ferry’s reply to my open letter to him. You accurately identify a main difference between Jeff’s position and mine: He believes, as I do not, that tariffs, by protecting key domestic industries from foreign competition, usefully promote long-run economic growth for the country writ large.

As you know, at my blog and in other writings, I have – as have many other economists (more skillfully than me) – reviewed the many reasons why it’s folly to expect politicians and bureaucrats to obstruct economic freedom in ways that result in the economy performing better than it would absent these obstructions. I repeat here the core economic argument: We economists have a coherent and empirically verified theory for how market participants are given both the information and incentives that are necessary to allocate resources away from less-productive and toward more-productive uses. Protectionists, in contrast, have no such theory. They simply assert that government officials know more than markets know, and are better than markets at acting on this knowledge.

Put differently, protectionists assume away one of the central challenges that every economy faces: How to obtain and use as much knowledge as possible about how resources can be more-efficiently allocated? The typical protectionist talks and writes as if he or she possesses this knowledge, yet the typical protectionist never bothers to tell us how he or she came by this precious information.

Another point is worth mentioning. You write that it “seems … you both would agree that harm [from trade] in the short run is not a debatable point.” Not so; I do debate it. Although it’s commonplace even among free traders to say something like “of course trade has short-run costs,” such a statement is misleading. It implies that, in destroying particular industries and jobs, international trade is unique.

But trade isn’t unique: Any and all market-driven economic change destroys some industries and jobs as it creates others. Changes in dietary habits, clothing styles, and educational choices – the introduction of labor-saving technologies – the entry of more women into the workforce – these and any other economic changes you can name destroy some particular firms and jobs and create others.

No one says, for example, that an increase in the number of Lutheran entrepreneurs means that increased entrepreneurship among Lutherans imposes short-run harm. Yet the economic consequences that people have in mind when they talk of trade imposing harm in the short-run are no different from the economic consequences that would arise if Lutherans became more entrepreneurial. This entrepreneurship, no less than increased foreign trade, would destroy some particular firms and jobs.

It’s simply incorrect to single out trade as a unique source of economic ‘harm.’

My apologies if the above is pedantic. But language matters. One reason protectionists easily persuade the public to swallow their snake oil is that even free traders, fearful of coming across as extreme, allow protectionists to get away with using misleading language.

Sincerely,
Don

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Because 30 days have passed since the Wall Street Journal published Phil Gramm’s and my September 26th, 2025, piece, “The Economic Cost of Trump’s Tariff Revival,” I share the full text of this piece here, without charge, beneath the fold.

[continue reading…]

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Dartmouth College trade economist Doug Irwin, who worked in the Reagan White House, writes in the New York Times that Trump is simply wrong to say that Reagan “loved tariffs.” A slice:

The Ontario ad was right: Reagan would not have approved of Mr. Trump’s protectionist trade policies, particularly when aimed at allies. Reagan also predicted their adverse outcomes. In 1985, he said that “one of the first victims of a protectionist trade war will be America’s farmers, who have it tough enough already” — an accurate description of where we are today as soybean farmers suffer from the loss of foreign markets.

One Reagan rebuke, in a speech he gave in 1988, has resonance today. “Protectionism is being used by some American politicians as a cheap form of nationalism,” he warned. “We should beware of the demagogues who are ready to declare a trade war against our friends — weakening our economy, our national security and the entire free world — all while cynically waving the American flag.”

Here’s more from Clark Packard and Alfredo Carrillo Obregon on “the folly of American steel protectionism.” A slice:

Whatever short-term benefits different episodes in the history of American steel protectionism have conferred on the domestic industry, they have also proven pyrrhic victories. Steel prices in the United States are persistently among the highest in the world. Per the latest data from SteelBenchmarker, the US price for hot-rolled band (per metric ton) is 28.3 percent higher than the price in Western Europe. This undermines US competitiveness in steel-consuming industries, such as manufacturing and construction, and raises prices for final consumers and taxpayers.

The problem isn’t just that steel protectionism fails economically—it’s that it succeeds politically. The entrenchment of Big Steel in Washington politics foments political dysfunction at home and abroad. On one hand, the steel industry engages in aggressive lobbying, and its insiders, including prominent members of the past and current Trump administrations, cycle in and out of government. On the other, the protectionism coming from Congress and the White House has repeatedly undermined US relationships with longstanding allies and trading partners, as well as the functioning of the World Trade Organization.

Simon Johnson and Stan Veuger warn that “if the US Supreme Court upholds President Donald Trump’s use of the International Emergency Economic Powers Act to impose tariffs on US allies and adversaries alike, it will hand a loaded gun to future presidents.”

Alan Dlugash has unwelcome news for the MAGA crowd: “Reagan meant what he said about tariffs.” A slice:

Today’s tariff cheerleaders want to rewrite Reagan as a protectionist hero. He wasn’t.

Ryan Bourne and Nathan Miller reveal “Mamdani’s wishful thinking on tax revenues.” A slice:

Empirical studies on this vary, but conventional economic wisdom is that anywhere between 30 percent and 70 percent of the corporate tax burden is passed through in the form of lower wages, stemming from less investment and so lower productivity of workers. In other words, ordinary New Yorkers will certainly pay a large proportion of this tax hike over time, even though the revenue yield will be lower than Mamdani presumes.

George Will decries “the choreographed fakery of American politics: East Wing edition.” A slice:

For decades, the constitutional, political, social (and, lately, aesthetic) damages done by the ever-more-swollen modern presidency have become increasingly evident. Congress, in its decades-long siesta, has empowered presidents to unilaterally tax (see: tariffs) and wage war (hello, Venezuela) as they please. Congress is now composed almost entirely of two cohorts: those who do nothing but genuflect to their party’s president, and those who do nothing but caterwaul about him.

It is especially amusing to hear progressives, the principal creators of the watery Caesarism of today’s presidency, sorrowfully describing Trump’s ballroom as discordant with the White House’s proper modesty. They should worry less about the president’s residential immodesty and more about his anti-constitutional immodesty.

My intrepid Mercatus Center colleague, Veronique de Rugy, continues wisely to warn of the folly of the U.S. government’s fiscal incontinence. A slice:

In 1980, America’s publicly held debt reached more than $712 billion (about $2.8 trillion in 2025 dollars), or roughly 25 percent of annual U.S. gross domestic product (GDP). Today, that figure is a little over $30 trillion, or around 100 percent of GDP. And as the federal debt grew 42 times larger over that span, the economy grew only tenfold. You can’t expand the numerator four times faster than the denominator for 45 years without courting economic danger.

That’s where we find ourselves. The U.S. is at peace, and despite President Donald Trump’s claims, there’s no national emergency. And yet we’ve only seen debt as a higher share of GDP during the years of 1945, 1946, 2020, and 2021. Then, Republicans and Democrats knew to scale back. Now, debt explodes during emergencies and continues to grow in peacetime.

Also warning of excessive government spending is Mike Munger.

Writing in the Wall Street Journal, GMU Econ alum Romina Boccia explains that, by adjusting for inflation using an outdated method, the U.S. Social Security Administration overestimates inflation and, thus, raises government spending excessively. A slice:

The CPI figure Social Security uses is outdated, costing taxpayers hundreds of billions of dollars each year. Social Security still relies on a 1970s inflation formula that overstates cost increases and inflates benefit growth—at a projected cost of $204 billion over the next decade, according to the Congressional Budget Office.

The index in question, the consumer price index for urban wage earners and clerical workers, or CPI-W, reflects the spending habits of only about one-third of Americans and ignores how consumers adapt when prices change. In the real world, when the price of beef rises, people buy more chicken. Economists call that the substitution effect, and the Bureau of Labor Statistics began accounting for it 25 years ago with the chained CPI, or C-CPI-U, a more accurate measure of the cost of living.

Here’s David Henderson’s new and excellent short biography of Julian Simon; it’s for David’s Concise Encyclopedia of Economics.

From Mark Perry on Facebook:

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… is from page 316 of my late colleague Gordon Tullock’s Fall 1987 Cato Journal paper, “The Calculus: Postscript After 25 Years“:

Keynes’s remarks about the role of ideas may be exaggerated, but they are not fundamentally wrong. New ideas invented in the quiet studies of scholars sometimes do change the world.