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In my latest column for AIER I note one accounting convention that makes the measured U.S. ‘trade deficit’ much larger than it would be were we to operate with a different, yet no less economically defensible, accounting convention. A slice:

Trade deficits arise whenever the amount of goods and services that a country imports during some period – say, one month – exceeds the amount of goods and services that it exports during that period. This fact is popularly taken to mean that trade-deficit countries consume more than they produce, with the excess consumption paid for with funds borrowed from abroad or with assets sold to foreigners. If this were true, ongoing trade deficits would impoverish any country that chronically runs them and be unsustainable. But history casts doubt on this common understanding of trade deficits: Despite the US running annual trade deficits every year starting in 1976 (the year I graduated from high school), the real net worth of American households is today (even though I’m now past the official age of retirement) at an all-time high,* as are real per-capita GDP, America’s industrial capacity, and America’s capital stock.

How is it possible that, in the face of nearly a half-century of uninterrupted annual trade deficits, Americans have gotten richer and our economy stronger?

Since Adam Smith, economists have repeatedly exposed the many conceptual flaws that infect popular discussions of the balance of trade. Perhaps most significant is the failure to realize that trade deficits are matched by capital inflows – or, as they’re called, “capital-account surpluses.” If, as is true for the US, the bulk of these inflows finance investment rather than consumption, the country’s capital stock grows, thus raising workers’ productivity and citizens’ prosperity. To bemoan rising US trade deficits is to bemoan foreigners’ eagerness to invest in America and the resulting growth of our capital stock and productivity.

But there’s another way to see why America’s prosperity has increased despite her long-running trade deficits: Large portions of these deficits are the result of a mere accounting convention – specifically, the convention of classifying international cash holdings as investments rather than as imports of the countries in which these holdings increase. This convention masks an important economic reality.

When foreigners hold US dollars, those dollars are not used to buy American exports. As a result, the US trade deficit grows by the size of these dollar holdings. In balance-of-payments accounting, these dollar holdings are classified as foreign investments in America – technically, as foreigners obtaining American assets. This classification is reasonable, as foreign holders of dollars might anticipate that the dollar’s value will rise against that of other currencies.

Yet it would be equally reasonable to classify these dollar holdings as American exports. Foreigners supply to America large amounts of textiles, steel, and other goods and services that they produce at a comparative advantage in exchange for a service that America produces at a comparative advantage – namely, the services of a relatively stable and especially useful currency.

Services supplied by a reliable currency differ in no essential respects from other valuable services that are classified as imports when purchased from abroad (or as exports when sold abroad) – services such as tourism, education, medical care, and investment advice. Because the US economy is so large and prosperous and has sophisticated financial markets – and because the Fed is relatively responsible compared to most other central banks – US dollar holdings provide foreigners with reliable purchasing power that is unique in its worldwide appeal. There are good reasons why the US dollar is the dominant global reserve currency, accounting for 53 percent of official foreign-exchange reserves.

Therefore, dollars for holding and using abroad are a major American output that we produce and export to foreigners in exchange for goods and services that we import. We should be no less pleased to have a comparative advantage at producing a currency that’s especially useful for global commerce than we are to have a comparative advantage at producing chemicals, IT, or any other good or service. Although in balance-of-payments accounting dollar holdings aren’t treated as an American export, there’s no economic reason why they shouldn’t be. If they were, the measured US trade deficit would be much smaller.

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The Wall Street Journal‘s Editorial Board exposes yet another boondoggle of that Make America Poorer Again agency, the cronyist U.S. Export-Import Bank. A slice:

The ExIm Bank’s putative purpose is to finance purchases of U.S. exports and make American products more globally competitive. In practice, the agency finances investments by big businesses that primarily benefit foreign companies and governments, much like the U.S. Agency for International Development.

France’s TotalEnergies’ Mozambique LNG export project is an example. Mozambique boasts large natural gas reserves off its coasts, but the East African country suffers from conflict and instability, which has spooked private investors. Total wants the U.S. and other governments to finance its $20 billion LNG project to reduce its risk.

The ExIm Bank approved a $4.7 billion loan for the project in 2020 on the rationale that China and Russia might otherwise finance the deal. But this justification strays from the agency’s stated mission.

My intrepid Mercatus Center colleague, Veronique de Rugy, points out that genuine economic improvement in the U.S. requires the cooperation of Congress. A slice:

Rising prices should have warned the Fed that inflationary pressures were building again, yet policymakers plowed ahead with interest rate cuts. They didn’t seem to be responding to economic fundamentals; they were responding to Wall Street’s demands for easy money.

The deteriorating fiscal outlook, which Congress primarily owns, won’t help fight inflation either. The Congressional Budget Office’s 10-year projections from January show the national debt growing over the next decade by $23.9 trillion. The recent House Republican budget would add another $4 trillion, only part of which will be offset with investment-driven economic growth.

More borrowing means higher interest costs on the national debt, which are already skyrocketing and project to soon exceed $1 trillion per year. As Hoover Institution economist John Cochrane has pointed out, when the Fed raises interest rates to combat inflation, it also raises these interest costs on the debt.

Mike Solon calls on Congress to protect Americans from bracket creep. A slice:

That several major tax thresholds aren’t indexed for inflation accounts for the inflation-fueled fiscal windfall. The income thresholds for taxing Social Security benefits aren’t indexed. Neither is the child tax credit, the $10,000 cap on the deductibility of state and local taxes, or the investment income threshold above which the ObamaCare surtax is applied. The basis used to measure and tax capital gains has never been indexed. As a result of all this, even if workers and investors saw their earnings rise by enough to offset inflation during the Biden administration, their real, after-tax incomes fell.

The early days of the Reagan administration hold a lesson for today’s congressional Republicans. Four decades ago, inflation was a major factor driving federal revenue. From 1973-81, the U.S. endured 9.2% average annual inflation. With an unindexed tax code that contained 33 income-tax brackets, federal revenue swelled as rising nominal income pushed families into higher tax brackets solely due to inflation. This process was called “bracket creep.” A Congressional Budget Office report in 1980 described it: “During much of the past decade, many taxpayers have found themselves paying larger fractions of their incomes to the federal government in income taxes.”

Here’s Robby Soave on Jeff Bezos’s announcement of a change in the editorial policy of the Washington Post. A slice:

Another news outlet expressing an interest in promoting civil liberties and economic freedom? Great! The more the merrier. Freedom, after all, does not suffer from a lack of enemies within the mainstream media. News coverage from a progressive and even ostensibly neutral bent often focuses on, say, the purported harms of making any cuts to bloated government; see, for instance, a recent news story in The Washington Post that explained how devastating staffing reductions mandated by the Department of Government Efficiency (DOGE) had made it impossible to unlock the public restrooms at Yosemite National Park. A news publication with a libertarian-friendly mission, on the other hand, might have asked whether the government bureaucracy within the National Park Service was intentionally starting with the most painful cuts of all in order to sap public enthusiasm for the cause of limiting government—something Georgetown University law professor Randy Barnett described as “malicious compliance” in a recent interview on Reason‘s Just Asking Questions.

Benjamin Zycher exposes the economic flaws in Lina Khan’s and the F.T.C.’s antitrust action against John Deere. Two slices:

Less than a week before the end of her tenure as chairman of the Federal Trade Commission, Lina Khan and the Attorneys General of Illinois and Minnesota filed a federal lawsuit against John Deere, arguing that Deere “has throttled the ability of farmers and independent repair providers (‘IRPs’) to repair Deere equipment, leaving farmers wholly reliant upon Deere’s network of authorized dealers (‘Deere dealers’) for many key repairs.”

Khan fancies herself an economist and expert on industrial organization by virtue of a law degree and a deeply flawed  2017 article in the Yale Law Review. It can surprise no one, therefore, that throughout her tenure as FTC chairman, Khan consistently promoted arguments and economic “analyses” so silly that they were roundly criticized as such by a broad spectrum of actual economists.

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Let us begin with the argument that “monopoly power” in the repair market yields “additional profits” for Deere. Khan and the AGs cannot believe that buyers of Deere equipment are unaware of the structure of the repair market. Accordingly, the more expensive and difficult the prospective repair process, the less that buyers of Deere equipment will be willing to pay for that equipment. After all, suppose in a conceptual extreme case that such repairs were impossible; were something to go wrong with, say, a tractor recently purchased, the buyer would be out of luck, stuck with a useless tractor.

In that extreme case buyers of Deere equipment would not be willing to pay prices much higher than zero. The more general reality is that a repair market that imposes unnecessary (that is, inefficient) costs on buyers reduces the demand — the price that Deere can command — for its equipment. The Khan/AGs argument is wholly at odds with standard economic analysis. It is nonsensical because the central underlying premise is that manufacturers can increase their profits by making life more difficult for their customers. Seriously?

Christian Britschgi makes an excellent point – namely, “Elon Musk’s vague White House role is only controversial because he’s trying to slash bureaucracy.”

Scott Sumner explains that even if DOGE successfully cuts out huge amounts of government waste, fraud, and abuse, there will result no money for the government to ‘give back’ to taxpayers.

This warning from Arnold Kling is wise.

Bob Graboyes writes with historical perspective about disinformation.

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… is from page 178 of Robert Higgs’s 2010 paper “Recession and Recovery: Six Fundamental Errors of the Current Orthodoxy,” as this paper is reprinted in Higg’s 2012 book Delusions of Power (original emphasis):

John Maynard Keynes persuaded his fellow economists and then they persuaded the public that it makes sense to think of the economy in terms of a handful of economywide aggregates: total income or output, total consumption spending, total investment spending, and total net exports. If people remember anything from their introductory economics course, they are most likely to remember the equation

Y = C + I + G + (X – M)

Sometimes Q⋅ P is equated to the variables on the right-hand side of the equation. So the idea is that aggregate supply (physical output Q times the price level P) equals aggregate demand equals the sum of four types of money expenditure for newly produced final goods and services – private consumption, private investment, government purchases, and net exports.

This way of compressing diverse, economywide transactions into single variables has the effect of suppressing recognition of the complex relationships and differences within each of the aggregates. Thus, in this framework, the effect of adding a million dollars of investment spending for teddy bear inventories is the same as the effect of adding a million dollars of investment spending for digging a new copper mine.

DBx: Yes.

Of course, all theorizing simplifies reality. It doesn’t follow, however, that all simplification of reality conduces to good theorizing. Keynesianism is a monument to unwise simplification – simplification that masks many essential features of the economy – simplification that results in a bad and misleading theory.

And excessive Keynesian-esque simplification haunts not only strictly macroeconomic theorizing of the sort that captured the bulk of Keynes’s attention. Such excessive simplification is evident in the pronouncements of nearly all protectionists. Many protectionists today, for example, demand policies to expand “the” manufacturing sector. They talk and write as if a policy is desirable if it results in manufacturing contributing a larger share of output to the economy. But almost never do these protectionists bother to ponder the details of their desire.

Treating manufacturing as a homogenous blob of economic activities, protectionists rarely ask what will happen to the existing pattern of manufacturing activities if government forces an expansion of overall manufacturing. The naive assumption is that all the manufacturing activities taking place on the day prior to the implementation of protective tariffs will continue in the days, months, and years afterwards without change as the tariffs simply multiply the number of manufacturing activities. Forget that protectionists never bother to ask if the expansion of manufacturing is worth the necessary contraction of service-sector activities; instead, note that protectionists never bother to ask if the details of manufacturing activities themselves might change for the worse if government forces an artificial expansion of manufacturing. The thought doesn’t even occur to them.

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George Will explains that economic and physical realities are never suspended (despite progressives’ and protectionists’ faith) by wishful thinking or fine words. Two slices:

In the economy’s electric-vehicle sector, and in other climate-related matters, dreamy aspirations are encountering sobering trade-offs. Governments are learning hard lessons about the unintended consequences of policies oblivious about society’s complexities.

Economic stagnation has the European Union tiptoeing away from its mandate that new cars and vans be emission-free by 2035. “Self-destructive,” says Prime Minister Giorgia Meloni of Italy, where slack demand for electric vehicles caused Fiat to close its Turin plant for a month last autumn.

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The Wall Street Journal reports that almost one-third of all vehicles sold in the United States at prices below $30,000 are built in Mexico. About 70 percent of the 4 million vehicles assembled at the more than 20 Mexican factories are shipped to the United States. Trump, populist tribune of the downtrodden, favors 25 percent tariffs to make these cars significantly more expensive — the free-trade agreement he negotiated be damned.

Americans are keeping their cars longer, paying less on repair bills than they would on monthly new-car payments — particularly as higher interest rates, a result of government-caused inflation, have increased the cost of car loans. Steel and aluminum tariffs will increase new-car prices, and Trump’s tariffs will raise the prices of imported auto parts.

The Wall Street Journal reports, counterintuitively, that “car-insurance prices are particularly sensitive to tariffs.” Those prices reflect the cost of repairing cars, and six out of 10 replacement parts are imported from Mexico, Canada and China. An insurance industry trade association estimates a potential increase of “well over $7 billion” in the costs of claims.

Woody Eckard’s letter in today’s Wall Street Journal is excellent:

In Gerard Baker’s excellent column “Illiberalism Is Suffocating Europe” (Free Expression, Feb. 18), he notes that Europe lags behind the U.S. in the “investment to bolster productivity, raise living standards and revive competitiveness.” This is caused in part by capital flight, which is the flip side of the U.S. trade deficit that so worries President Trump and company.

Europeans are spending those dollars not on U.S. goods and services (the trade account) but instead on U.S. financial assets (the capital account). Instead of investing in the stagnant European economy that Mr. Baker describes, they instead are investing in our economy—i.e., raising our productivity, living standards and competitiveness. Mr. Trump should be laughing all the way to the bank.

Charles Calomiris is a fan of Amar Bhidé new book, Uncertainty and Enterprise: Venturing Beyond the Known. A slice:

Mr. Bhidé shares with Herbert Simon, the economist who brought practical psychology into economic analysis, a respect for the processes and routines that experience has taught us to employ when addressing challenging problems. Like Simon’s concepts of “bounded rationality” and “satisficing,” Mr. Bhidé’s “functional reasonableness” admires the application of reasonable (as opposed to optimal) processes for reaching practical answers with “relative confidence.” Mr. Bhidé teaches us not to expect the most interesting problems to be resolved by precise calculations or optimization algorithms.

What is especially appealing about this formulation is that it is not a one-size-fits-all view of managing uncertainty. It implies that different degrees of uncertainty should give rise to enterprises that differ in size, governance structure, funding sources and decision-making processes. Uncertainty is a guiding light for understanding what is essentially different about firms along these dimensions.

Mr. Bhidé believes that theories of firm structure and organization based on degrees of uncertainty deliver predictions that are different from, and more powerful than, those that flow from models of contracting costs and control rights. Firms operating at the high-uncertainty end of the spectrum don’t simply pioneer new products or services or rely on new patents. Their central commonality is operating in “unsettled markets.” Such enterprises can often trace their higher growth and profitability to an ability to adapt to changes, and not to any preparatory research about opportunities. This insight does more than illuminate the shortcomings of microeconomics. It allows us to see why and how enterprises structure themselves to foster imaginative learning and justification, and how they are able to communicate this learning and justification to prospective funding sources.

Mark Lasswell understandably ridicules the officious and counterproductive diktats that restrict the flow of water through Americans’ faucets. A slice:

Intrepid researchers at the University of Surrey had placed sensors in 290 showers around campus, recording data for 39 weeks from 86,421 individual shower sessions. “Water consumption,” the study found, sensationally, “was reduced by up to 56% with high water pressure.”

The researchers, seeming puzzled by the results, recommended more study. But they also offered a theory along these lines: When a showerhead delivers a good, fizzing spray, people pop in and briskly get their business done, unlike when faced with a drizzle that prompts them to wonder if the Head & Shoulders will ever be adequately washed off their head and shoulders.

One researcher, perhaps trying to reassure eco-warriors distressed by the news, noted: “The best of all worlds is high pressure, low flow.” This is true, just as in the cake realm the best of all worlds is having it and eating it too. The showering ideal might be achievable in controlled laboratory conditions, but we all know what happens in the tiled wild.

GMU Econ alum Dominic Pino reports that “shareholder value is back at BP.”

Jimmy Alfonso Licon reveals some of “what Greta and the pope don’t grasp about degrowth.”

Matthew Lau defends Milton Friedman’s ideal of freedom. A slice:

Of course, faced with more than one choice, people often choose badly. Friedman’s view was that he has every right to persuade someone who is choosing badly to change his mind, “but if I can’t persuade him, do I have the right to force him?” His answer is, “No.”

And here we might imagine Friedman’s follow-up point: If the problem with being free to choose among more than one Netflix movie and more than one type of cereal is that people might choose randomly or badly, what is the alternative? To have the government decide what movies we watch and what cereal we eat? Or some activist somewhere?

Mark Antonio Wright is not amused by progressives self-righteously bleating their anguish over Jeff Bezos’s announcement that the opinion pages of a newspaper that he owns – the Washington Post – will from here on in support and defend “two pillars: personal liberties and free markets.” A slice:

There’s only one explanation for all the caterwauling.

Progressive journalists must believe that, despite the fact that Jeff Bezos owns the Washington Post, paid $250 million of his own money for it in 2013, has lost tens of millions of dollars operating the place over the years, and pays every last employee’s salary, he doesn’t get to actually decide what happens in the company he owns.

The employees get to decide that, apparently. It’s the closed-guild system of journalism. Nothing more.

Charles Cooke is spot-on in his description of progressives’ sense of entitlement to other people’s money and deference. A slice:

This is also how progressives see the federal bureaucracy, public schools, public universities, and more — not as entities that exist to fulfill a specific goal and should be judged by how well they achieve it, but as distant check-writing institutions that have been placed into the hands of the American Left by divine design and must never be touched or questioned by those who are paying the bills.

My intrepid Mercatus Center colleague, Veronique de Rugy, talks with Samuel Gregg and Richard Reinsch about the future of free markets in America.

David Henderson applauds Russ Roberts’s recent EconTalk episode with my GMU Econ and Mercatus Center colleague Pete Boettke.

Our society is fabulously wealthy.

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… is from page 120 of the 1969 Arlington House edition of Ludwig von Mises’s 1944 Yale University Press book, Omnipotent Government: The Rise of the Total State and Total War (available free-of-charge on-line here):

Nothing could be more mistaken than the now fashionable attempt to apply the methods and concepts of the natural sciences to the solution of social problems.

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Benn Steil writes – correctly, in Barron’s – that “Trump wants the dollar to be mighty but weak. It makes no sense.” (HT Steven Kaufman). Two slices:

President Donald Trump’s views on the role and level of the U.S. dollar recall a famous claim by the novelist F. Scott Fitzgerald. “The test of a first-rate intelligence,” Fitzgerald wrote, “is the ability to hold two opposed ideas in the mind at the same time and still retain the ability to function.” Assuming the president’s policy hyperactivity is evidence of functioning, we are witnessing a first-rate intelligence in action.

Either that or a devastating disproof of Fitzgerald’s claim.

Both Trump and Vice President JD Vance have, for some years, been outspoken in support of a weaker dollar. They believe that depreciation will cut the U.S. trade deficit and help U.S. manufacturers and exporters. But they have also contradicted themselves, and each other, repeatedly on matters that have a strong and enduring impact on the level of the dollar.

First and foremost among these contradictions is their view on the dollar’s role as the dominant central-bank reserve currency and its outsize use in international trade. On Jan. 30, the president thundered a threat at the “seemingly hostile” countries that make up the BRICS group—Brazil, Russia, India, China, and South Africa. “They will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar,” Trump warned. But if they do, they “will face 100% Tariffs.”

The irony is rich and multilayered. First, the BRICS nations are seeking alternatives to the dollar specifically to escape proliferating unilateral U.S. financial sanctions, yet the president is threatening more such—in the form of 100% import tariffs—if they proceed. Second, the dollar’s dominant role in reserves and trade is a major factor keeping its value higher than it would be if other currencies played or shared that role. Third, Vance in 2023 referred to the dollar’s “reserve currency status” as “a massive tax on American producers.” It fueled, the then-senator said, “our mass consumption of mostly useless imports, on the one hand, and our hollowed-out industrial base on the other.”

The two men cannot both be right. And indeed Trump himself, notwithstanding his famed claim to be a “very stable genius,” is ensnared in a logical knot. Either the dollar must remain “mighty” and dominant, or it must shed this albatross and fall to a level more favorable to U.S. exports. To demand that the dollar do both is as illogical as to demand that tariffs raise import revenue while at the same time stopping imports.

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To return to Fitzgerald, the president’s supporters frequently laud his seeming inconsistency as a brilliant negotiating tactic designed to achieve some higher Hegelian synthesis. Perhaps “prosperity for our time” is therefore just around the corner. But my money is on a tariff-driven stronger dollar together with higher costs, retaliatory tariffs, and a withering of the multilateral trading system—which is, unfortunately, the worst possible combination for U.S. business.

Parker Hudson adds his voice to those warning of the destructiveness of Trump’s protectionism.

The Editorial Board of the Wall Street Journal explains that “Trump’s tariffs will punish Michigan.” A slice:

Mr. Trump says tariffs will force auto makers to make more cars in the U.S. Not likely, and that would take time in any case. Domestic demand for some vehicle models—especially sedans—isn’t sufficient to justify the cost of building new U.S. factories. Auto makers will have to absorb the tariff, increase prices on cars, or stop selling some models because they are too expensive.

U.S. auto workers will pay, too, if auto sales drop as a result of higher prices. Note that new U.S. vehicle sales last year were about 1.2 million lower than in 2019, largely because inflation and higher interest rates have made cars less affordable. One result is that U.S. plants produced 340,000 fewer cars last year than in 2019.

There are about 17,000 fewer U.S. workers employed in motor vehicles and parts than there were six years ago. Average weekly hours worked in the industry have fallen. The President can’t blame imports, which have fallen even more than U.S. car production.

Jim Dorn applauds this reality: “DeepSeek is a private/​nonstate research firm run by a self-made billionaire who favors the spread of knowledge bodes well for China’s future.” And he laments this one:

The process of scientific discovery and innovation, however, cannot itself turn China into an open society where individuals are free to choose and express their ideas without the threat of political reprisal. As long as China’s leaders maintain the CCP’s monopoly on power and suppress freedom of thought, improvements in AI will be hampered by the state, as will the emergence of a harmonious society.

Eric Boehm reports on a new lawsuit the plaintiffs of which claim that the cronyist Jones Act is unconstitutional.

The Wall Street Journal‘s Editorial Board understandably is shedding no tears for the myopic and arrogant Elizabeth Warren. A slice:

The Massachusetts Democrat devised the CFPB after the 2008-09 financial panic to be independent of political control and normal constitutional checks and balances. Because the bureau obtains its funding on demand from the Federal Reserve, Congress can’t use its power of the purse as a form of oversight.

Democrats in Congress are suddenly fuming that they can’t stop the Trump Administration’s plans to overhaul the bureau. “Congress built [the CFPB], and no one other than Congress—not Donald Trump, not Elon Musk, no one—can fire the financial cops,” Ms. Warren said this month in a protest at CFPB headquarters.

Well, no, by her own design Congress can’t force the bureau to spend money, including on employee salaries. She also says no other agency will protect consumers, but plenty of other regulators can do the same job better.

My Mercatus Center colleague Alden Abbott, writing at Forbes, explains that “Recent antitrust law developments in the United States and abroad have tended to undermine, rather than promote, competitiveness.”

Jacob Sullum makes clear that “the FTC has no business trying to make sure social media are ‘fair’.”

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… is from page 142 of Johan Norberg’s superb 2023 book, The Capitalist Manifesto:

[A]ttempts to save people from the consequences of their folly is to fill the world with fools.

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The Editorial Board of the Wall Street Journal is rightly appalled by the Trump administration’s coddling up, at the U.N., to Putin. A slice:

The United Nations is no great moral arbiter of anything, but at least the United States has tried over the years to have that group of nations recognize the truth about bad actors. That wasn’t the case Monday, as the U.S. voted with Russia against a General Assembly resolution calling out Russia for its invasion of Ukraine three years ago.

What a regrettable moment. The resolution, sponsored by Ukraine and European nations, wasn’t even all that strong. It merely noted “with concern that the full-scale invasion of Ukraine by the Russian Federation” has had “devastating and long-lasting consequences” and called for “an early cessation of hostilities.”

Apparently even this was too much of a rebuke to Vladimir Putin for President Trump to tolerate as he seeks to negotiate an end to the Ukraine war. The U.S. had supported these resolutions since the war began but is now voting with the world’s rogues rather than with its allies. The U.S. tried to pressure Ukraine to withdraw its resolution in favor of an American draft that didn’t cite Russia as the aggressor in the war. Kyiv understandably refused.

Ilya Somin accurately describes Trump’s support of Russia as “shameful.” A slice:

Today is the third anniversary of the beginning of Russia’s full-blown assault on Ukraine, on February 24, 2022. Sadly, over the last few weeks, the Trump Administration has moved towards abandoning Ukraine to its brutal enemy. Trump has essentially adopted the Kremlin line on the war – blaming Ukraine for Russia’s aggression, and made a series of concessions to Vladimir Putin (foreclosing Ukrainian membership in NATO, letting Russia keep the territory it occupied, etc.), without demanding anything from Russia in return. The Administration has been trying to make a deal under which the US will have rights to much of Ukraine’s mineral resources. But they aren’t offering any security guarantees or continuation of military aid in return. On top of that, as part of a broader assault on legal immigration,  Trump has suspended the highly successful Uniting for Ukraine program, under which Americans are able to sponsor Ukrainian refugees to live and work in the US.

Scott Sumner writes wisely about U.S. policy toward China and Russia. A slice:

Here’s a question I have for all of the people that have argued we need sanctions on China due to its ambivalence on the Ukraine War issue.  What sort of sanctions do you favor being put on the US, now that our government is far more supportive of Russia’s policy than China ever was?  Should the EU, Canada and Japan put even stricter sanctions on the US than on China?

China’s poor human rights record is also cited by cold warriors.  But China’s single worst human rights violation–it’s decision to put roughly a million Uyghurs into concentration camps–was endorsed by Donald Trump during his first term in office. Once again, it’s difficult to see the argument for putting sanctions on a country because of concern over human rights, when the country considering sanctions endorsed those policies.

Jacob Sullum explains that Trump’s “portrayal of journalism he does not like as consumer fraud is legally frivolous and blatantly unconstitutional.” A slice:

“Fake News is an UNPARDONABLE SIN!” President Donald Trump declares in a Truth Social rant inspired by the cancellation of Joy Reid’s MSNBC show. “This whole corrupt operation is nothing more than an illegal arm of the Democrat Party. They should be forced to pay vast sums of money for the damage they’ve done to our Country.”

Trump’s claim that journalism he does not like is “illegal” and constitutes a tort justifying massive civil damages should be familiar by now. He has made such claims not only in social media posts but also in actual lawsuits against news organizations. As the Foundation for Individual Rights and Expression (FIRE) explains in a motion filed last Friday, these chilling attempts to convert Trump’s complaints about press coverage into causes of action are legally baseless and blatantly unconstitutional.

Deirdre McCloskey reveals the heart of true liberalism. (HT Arnold Kling) A slice:

What is this “liberalism” enunciated by the forefathers and foremothers—Tom Paine and Mary Wollstonecraft, Frédéric Bastiat and Alexis de Tocqueville, Ramon Aron and Rose Wilder Lane? Briefly, it is equality of permission. Parts of such an equality are human dignity, in cosmopolitan fashion ,and equality of standing to speak, in pluralistic fashion. But more generally it is an equality for all responsible adults to endeavor.

It is not the equalities of outcome or of opportunity, which of course are properly accorded to children in a loving family. Outcome and opportunity as political ideals, to be contrasted with an adult and responsible permission, became popular—though never achieved—in the middle of the 19th century. Socialism and “New” Liberalism arrived well after equality of permission had begun the liberal revolution and its resulting Great Enrichment. In 1846 the true liberal Thoreau began “Resistance to Civil Government” by declaring “I heartily accept the motto,—’That government is best which governs least,’ and I should like to see it acted upon more rapidly and systematically.” By contrast, the New Liberalism of the 1880s, still with us, summons the government to attempt to assure the equalities of outcome and opportunity, as children are assured in a loving family. The state has largely mostly in the attempt at such material equalities. But it has succeeded spectacularly in making us more and more into children, then serfs. The residue of the new liberty of permission made us rich in matter and soul, from Scotland and Tuscany to Hebei and Maharashtra. And the enrichment from equality of permission, ironically, achieved indirectly a substantial degree of equality of material outcome and opportunity.

Barry Brownstein argues that the government makes vaccines less safe than these would otherwise be.

John O. McGinnis and Leo Soh make clear what ought not – but, alas, today does – need to be made clear: bureaucrat regulators must be reined in. Two slices:

America prides itself on being a land where individuals and businesses can plan their futures. Control over the design of your life is essential to liberty, and the nation prospers when people know that their enterprises and investments will be immune from arbitrary enforcement. However, in a world of wide-ranging regulations—covering everything from cryptocurrency markets to healthcare to environmental standards—the promise of legal predictability often goes unfulfilled. Many agencies, instead of clearly stating the rules in advance, prefer to announce them during an enforcement action. This approach, known as “regulation by enforcement,” stifles innovation, chokes off economic growth, and undermines the rule of law.

Regulation by enforcement has become a flashpoint. Last month, Judge Stephano Bibas of the Third Circuit Court of Appeals noted: “Nearly a century ago, Congress created the SEC to serve as a watchdog for securities markets, including by developing rules. The SEC insists that its old rules apply to the novel crypto market but refuses to spell out how.”

…..

We prosper when entrepreneurs can engage in a dynamic marketplace governed by sensible, consistent rules. Yet we need regulations to prevent companies from wrongly imposing costs and dangers on our citizens. One overlooked but important mechanism permits bold enterprise and necessary regulation to flourish together. That mechanism lies in the original understanding of the APA, in a provision enacted by Congress to afford private actors the ability to force answers from agencies. Mandating the broader use of declaratory orders would not only implement faithfully Congress’s directive but would also restore confidence and creativity in our commercial republic.

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… is from page 35 of my late, great colleague Gordon Tullock’s 2000 paper (with Gordon Brady), “People Are People,” as this essay is reprinted in volume 4 (The Economics of Politics) of Tullock’s Selected Works (Charles K. Rowley, ed., 2005):

The politician in a democratic society is a man who makes a living winning elections.

DBx: Yes.

The politician in a democratic society is not someone who has specialized knowledge and skills at doing any of the tasks that he or she typically promises voters that he or she will carry out – tasks such as divining how resources can be better allocated or how to bring about here on earth something closer to nirvana.

With relatively few exceptions, the politician in any society – not only in a democratic society – is an officious busybody. He or she is someone who mistakes his or her good intentions and unconstrained imaginings – and lust for power – as a moral charge fused to a miraculous ability to boss other people around for their own good.

In short, the politician is someone not to be trusted with the power that he or she seeks.