Start with what is perhaps the single most important feature of living standards, namely, the amount of time we live to enjoy those standards. Life expectancy has risen. Life expectancy today is three percent longer than in 2000, five percent longer than in 1990, eight percent longer than in 1980, 12 percent longer than in 1970, and 13 percent longer than in 1960.
In light of this happy trend it’s no surprise that the percentage of the US population who are age 100 and older is today (2020) 78 percent larger than in 2000, twice as large as in 1990, 4.2 times larger than in 1980, 6.3 times larger than in 1970, and 8.3 times larger than in 1960.
Because life expectancy rises when wealth increases, Americans’ rising living standards are not only themselves a component of wealth, they also reflect Americans’ rising wealth.
…..
Today, the average floor size of a new single-family home is 2,408 square feet. The floor size of this home is 6.3 percent larger than that of a new single-family home in 2000 (the year before China joined the World Trade Organization). It’s 16 percent larger than in 1990 (four years before the North American Free Trade Agreement was launched), 38 percent larger than in 1980 (five years after America last ran an annual trade surplus), 61 percent larger than in 1970, and 90 percent larger than in 1960.
This positive trend is even more impressive when accounting for the fall in the number of people who live in the average American household. Today, each resident of that household has 11 percent more square feet of living space than did a resident of an average new single-family home in 2000, 22 percent more space than in 1990, 53 percent more space than in 1980, 102 percent more space than in 1970, and 149 percent more space than in 1960.
I’m unable to find reliable data on the cubic footage of the average American home, and of how this measure has changed over time. (If you know of a source of such data, please share that source with me.) I’m willing to bet (literally!) that the average US home today not only has more square footage than it did in the past — say, in 1975 — but also more cubic footage.
President Trump has issued at least three executive orders aimed at stopping racial discrimination, including affirmative action and disparate-impact analysis. The orders fulfill the constitutional requirement of equal protection of the laws, forbidding government from treating people differently based on race. They also reinforce Chief Justice John Roberts’s observation that “the way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”
One simple way that the Trump administration can promote these objectives is by revising the Office of Management and Budget’s Statistical Policy Directive 15, which specifies the kind of data on race and ethnicity government agencies must collect. The current directive is unconstitutional, discriminatory and scientifically unsound.
If OMB revised the directive to prohibit the collection of racial data, it would make it more difficult for regulators and attorneys to devise schemes for government to discriminate by race. Such a protection of Americans’ liberty would be even more robust and enduring if enacted by Congress rather than the executive branch. But in the meantime, a revised directive could halt this unconstitutional race accounting.
The directive has been flawed ever since the OMB developed it in 1977, but the Biden administration last year revised it to expand racial and ethnic classifications, creating more unconstitutional racial bases for government reward and punishment. It created a Middle Eastern or North African race, or MENA; respondents were previously classified as white.
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The Census Bureau is using the Biden administration’s flawed methodology to collect racial data for parts of the Current Population Survey and has plans to implement it fully in the American Community Survey in 2027 and in the 2030 decennial census. The Trump administration should stop this discriminatory madness before it’s too late.
Susan Dudley reflects on three new books and their authors’ thoughts on creative destruction. A slice:
Economic freedom and market forces not only incentivize innovation but allow failure, while governments often perpetuate failure by protecting incumbents. And, as Schumpeter showed us, failure is a necessary part of the innovation process.
When House Speaker Mike Johnson lashed out at last weekend’s “No Kings” rallies soon to arrive on Washington’s National Mall, he reached for an old conservative refrain: “They hate capitalism. They hate our free enterprise system.”
I am sure he’s correct about some of the protesters. But the message rings hollow coming from a party leader that stands by as President Donald Trump does precisely what Johnson rightly decries: substituting political control for market choice and ruling by executive order.
Indeed, what began as a populist revolt against so-called elites has become a program of state ownership, price fixing and top-down industrial control.
Protectionist policies — tariffs on Chinese furniture, subsidies for domestic chipmakers, “Buy American” mandates — are building a “fortress economy” that traps sluggish growth and higher prices inside. According to the Tax Foundation, Trump’s tariffs would reduce US GDP by 0.8 percent over the next decade, translating to an average tax increase of $1,300 per US household in 2025. These estimates are understated, as they don’t account for the shrinking choices consumers face and the higher prices for substitute goods.
Trump’s latest round of tariffs on furniture alone will raise prices for millions of households, as his previous import restrictions have already done. In fact, US furniture companies, the supposed beneficiaries of these tariffs, opposed Trump’s plan, arguing that these “tariffs cannot reopen factories that no longer exist, bring back thousands of workers who retired or moved on to other industries, nor reverse the interests and inclinations of today’s younger workers, who are attracted to higher-paying trades.”
Biden’s policies, despite their “green” rhetoric, mirrored this approach, raising input costs and slowing productivity growth without reviving manufacturing or clean energy. In his new book, Crushing Capitalism, Norbert Michel argues that populist agendas are depressing the brakes on decades of unprecedented US economic growth. He explains that the narrative of too much “liberalism” hollowing out the middle class is not only wrong, but dangerous.
It remains genuinely astonishing that someone as obsessed with tariffs as President Donald Trump can also be so maddeningly ignorant about how they actually work.
Case in point: On Thursday morning, the president simultaneously took credit for raising beef prices (with tariffs, naturally) while also demanding lower beef prices for consumers. This reflects an ongoing tension within the Trump administration’s trade policies, as Trump is currently seeking additional beef imports from Argentina to offset the higher prices caused by his tariffs on beef from other countries.
Romina Boccia and Tyler Turman want to “end Obamacare’s welfare for the wealthy COVID credits.”
… is from page 18 of Stephen Macedo’s 1986 monograph, The New Right v. the Constitution; by “New Right” Macedo means those many American conservatives – such as the late Robert Bork – who, being rightly appalled by the unprincipled activist jurisprudence of especially the Warren Court, overreacted by insisting that judges should read the U.S. Constitution narrowly as a document that gives the political branches enormous powers over a vast range of issues – powers the exercise of which, these conservative jurists insist, ought to be found by judges to be violations of the Constitution only under the rarest of circumstances:
For the people who drafted and ratified the Constitution, legitimate government depended not only on the document’s origin in popular consent, but also on its conformity with certain principles of justice and “unalienable Rights,” which were held to be “natural” or of higher moral standing than the will of any majority.
DBx: Yes. If the intent of America’s founders is to be understood as well as is humanly possible, the political philosophy that motivated their decision to declare their independence from Great Britain cannot be ignored. And that political philosophy emphatically rejected both raw majoritarianism and king-like powers exercised by the executive branch.
I just realized that I never shared in full the complete text of Phil Gramm’s and my September 12, 2023, Wall Street Journal piece, titled “Trump’s Trade War Was a Loser.” You can read the full text beneath the fold.
Here’s a note to a new correspondent.
Mr. B__:
Thanks for sending along Dani Rodrik’s new paper “What the Mercantilists Got Right.”
As usual, Rodrik writes engagingly. But I’m afraid I don’t share your positive assessment of his attempt to find merit in mercantilism.
He immediately gets off on the wrong foot by arguing that the lesson of the “I, Pencil” story, as told by Milton Friedman, is today moot, or at least seriously incomplete, given that most pencils are now made in China, and that Beijing (according to Rodrik) uses subsidies, currency manipulation, and other interventions to increase pencil production in China. Forget that Rodrik never bothers to wonder which particular industries in China are necessarily being made smaller than otherwise given this state-engineered expansion of the Chinese pencil industry. Instead, recognize that Rodrik misses the essential point of “I, Pencil.”
This point is that the production of that seemingly simple product requires the use of vastly more knowledge than can be had by any one person or committee of persons. Beijing might well have arranged for China to become the world’s leading final assembler of pencils, but it did not eliminate the necessary roles played by specialists from around the globe each to perform his or her individually tiny share of the work required to produce pencils.
Person A had to design the chainsaw for felling the cedar tree – person B to help drill for the petroleum that’s refined into fuel for the cargo ships that bring to China the rubber and pumice for the pencils’ erasers – persons C and D to pilot those ships – persons E and F to design and produce the software used to navigate those ships – person G to write the insurance contract making the operation of those ships economically feasible – person H to help make the dyes that turn paint yellow – person I to engineer, and person J to manufacture, the glue that’s in the pencil – person K to help make the electrical wiring that transmits power to the pencil factory – person L to know where to find graphite for the “lead” – persons J, … X, Y, Z….
The number of such persons is surely in the hundreds of millions. Each must be motivated to produce what he or she produces and to be guided to produce in ways that are coordinated with the many other persons whose efforts contribute to the production of pencils. This coordination is done overwhelmingly by prices and other market signals.
Even if – as is highly unlikely – every function for producing Chinese-made pencils is performed in China, the process for this production is not, and cannot have been, consciously designed and directed by government officials. That process requires market signals. And to the extent that Beijing overrides market signals with conscious diktats, you can be certain that the Chinese are producing pencils wastefully, at inordinately high costs, thereby making their economy less productive and the Chinese people less prosperous.
Rodrik errs on several other fronts, but his failure to grasp the essential point of “I, Pencil” is a sufficiently telling symptom of his misunderstanding of market processes and trade.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
Economists at the St. Louis Federal Reserve report this unsurprising fact: (HT Jon Murphy)
While headline PCE inflation has increased only modestly in recent months, the categories of goods most exposed to international trade tell a different story. In the U.S., prices for durable goods—such as vehicles, electronics and furniture—have increased noticeably. These price movements align with the timing of tariff hikes earlier this year.
For more on tariff-induced price increases see this tweet by Scott Lincicome.
Many New England farms were among the economic, cultural and emotional casualties of the dynamism unleashed by the Erie Canal’s contribution to globalization. Americans were, however, as [Daniel Walker] Howe says, “a mobile and venturesome people, empowered by literacy and technological proficiency,” welcoming dynamism.
Headlines announced the arrival of Long Island oysters in Batavia, a town in western New York. By 1850, the price of a wall clock had plunged from $60 dollars to $3. Howe: Largely because of lower transportation costs, “changes from the rustic to the commercial that had taken centuries to unfold in Western civilization were telescoped into a generation in western New York state.”
By lessening the commercial and political isolation of prairie farmers, the canal helped to populate the prairies by connecting them with Eastern markets. And by linking Americans living west of the Appalachian mountains to the Hudson River, it created New York City as a financial center. One day in 1824, Howe writes, there were 324 ships in New York harbor. One day in 1836, there were 1,241. Through the city’s port, America exported grain and revolution.
John Cochrane writes about Thomas Sowell’s great 1980 book, Knowledge and Decisions. Two slices:
Prices convey information, including what we now call “private information,” like who can more easily get along without orange juice for a while or what plot of land is best suited for growing oranges. Prices are the wires that connect the processors of the economy. Prices are the pheromones that socially organize our ant colony. Prices are signals, wrapped in incentives. Prices are efficient, sufficient statistics for decisions, giving just enough information. You don’t need to know whether there was a freeze in orange country, or a train derailment, or a new fad raising others’ demand. You just look at the price, and your own self-interest, and you act with the socially efficient response.
So wrote Friedrich Hayek (1945) in his celebrated essay “The Use of Knowledge in Society.” I read this essay, as many economists do, in graduate school in the early 1980s. I thought it was wonderful. Hayek undoes a grand conceit: Introductory economics courses teach the “first welfare theorem:” that the market, if absolutely perfect, can just achieve the same result as a benevolent planner. The classes quickly move on to describe how hypothetical planners can solve myriad market “imperfections.” But planners can never have or process the necessary information. The theorem should be rewritten: Planners can never hope to achieve what markets do.
But I also noticed that despite the then 40 year passage of time, few others seemed to have followed up on this spectacular insight. Hayek seemed to stand alone. Every other paper we read spawned thousands of followers. Where were Hayek’s followers? (They were there, of course. But unlike Hayek, “Austrians” never made it to the academic mainstream that gets assigned in graduate schools.)
Then I found the just-published Knowledge and Decisions, Tom Sowell’s economic masterpiece. (I read several other eye-opening Sowell books at the same time, especially his works on race, and culture. But it is not my task to share that experience today.) This was a world-view-changing experience, a few crucial steps down the yellow-brick road that made me the classical liberal with many adjectives that I am today.
Sowell encyclopedically expands on Hayek. But he also drew on many others.
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Mainstream economics ignored Hayek for 45 years until Sowell produced his masterpiece. That it has largely ignored Sowell for another 45 years means that the ground is ripe for another masterpiece.
J.D. Tuccille sensibly pleads for the end of Obamacare subsidies. A slice:
The federal government’s not-really-a-shutdown lingers on, largely driven by Democrats’ insistence on extending pandemic-era subsidies that conceal the real cost of health coverage under the Affordable Care Act (ACA)—better known as Obamacare. It’s not enough that the spending bill under consideration is already bloated with unaffordable goodies that Republicans and Democrats alike support. Democrats have to show themselves battling the Trump administration and see advantage in doing so while fighting to preserve the main legislative accomplishment (bad policy though the ACA is) on which they’ve staked their reputations for over a decade. This is no way to handle spending, let alone to improve health care.
PERC’s Shawn Regan explains that “the Clean Air Act is making our air dirtier.”
… is from page 133 of Norbert Michel’s excellent 2025 book, Crushing Capitalism: How Populist Policies are Threatening the American Dream; it’s the conclusion of his data-rich book:
Economic freedom is the sturdiest ladder out of poverty. Extensive government involvement in the market, whether under the name of industrial policy or central planning, destroys the ladder.
Here’s a letter to the Wall Street Journal.
Editor:
John Cochrane is always worth reading, and his “Trump’s Monetary Policy Desires Aren’t Crazy” (Oct. 22) is no exception. But as even Homer sometimes nods, so, too, does Mr. Cochrane at the end of his essay.
He’s correct that “countries that run perpetual trade deficits to finance consumption, borrowing abroad to do so, eventually must pay back the debt. Saving and investing rather than borrowing and consuming is good for an economy as it is for a family.” But he’s mistaken that “the central problem in our case – and in much of history –is the bounty was consumed rather than invested.”
The U.S. has run consecutive annual trade deficits for the past 50 years. If Americans used the bulk of this inward flow of foreign capital to finance consumption, our real net worth would have fallen. Yet in fact it has risen. The average American household’s real net worth is today 236% higher than it was in 1975 (and 142% higher than in 1994 when NAFTA took effect, and 80% higher than in 2001 when China joined the WTO).
While some of this foreign capital did indeed unfortunately finance the wasteful consumption that results from deficit spending by government, the bulk of it clearly was used to increase the size of America’s capital stock and, hence, to raise the productivity of our economy.
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
As this report reveals, Trump thinks that he’s CEO of America, Inc., and that his job is to ensure that America, Inc., sells as much as possible to – and buys as little as possible from – China, Inc., Mexico, Inc., Canada, Inc., India, Inc., Australia, Inc., EU Inc., and on and on for all other countries. His goal is simple and easy to understand: America succeeds at trade only insofar as it is a net earner of money from trade with each individual country with which it deals. The exclusive purpose of trade, for Trump, is to bring in money; it is not to enrich domestic citizens with goods and services.
This core mercantilist fallacy, of course, was a chief target of Adam Smith.
Trump is not merely a mercantilist; he’s a cartoonish mercantilist. His economic ignorance defies at least my ability to adequately describe it.
I regret my poor talent at using the English language, for I’m frustrated at my inability to more fully reveal this Trumpian notion’s economic insanity.
A week later, during an interview with two reporters from Vox, Cass was asked whether the Trump administration was making an error by imposing a global tariff on all imports (including “shirts and screws and picture frames and bicycles.”) instead of focusing on critical items like semiconductors.
“I think a global tariff is the right way to do things,” Cass said. “It’s a very simple, broad policy that conveys a value that we see in domestic production.”
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In October, Cass wrote in The Atlantic that Trump’s global tariffs “takes the right approach to addressing globalization’s failures.” He dismissed tariff critics as unpatriotic nerds who “don’t believe that manufacturing things domestically matters.” (For a deep and thorough rebuttal of those claims, check out this response, crafted by two trade experts at the Peterson Institute for International Economics.)
Yet the evidence is now becoming overwhelming: The economists knew what they were talking about.
The manufacturing sector has dipped into a recession this year, as executives have reported higher input prices, fewer new orders, and declining employment—all of which could be attributed to the sudden tariff hikes imposed earlier this year. Meanwhile, surveys of business owners have found very little support for tariffs, while most say Trump’s trade policies are increasing uncertainty and raising costs.
The Editorial Board of the Wall Street Journal is correct:
President Trump moves so fast and announces so much that it’s hard to sort the real from the hype. Cases in point are the invest-in-America promises that foreign governments have made as part of Mr. Trump’s trade deals. They’re so large they’re unlikely to happen, and they raise serious questions about American governance and the power of the purse.
By insisting on “no enemies to the right,” the right is repeating the left’s biggest mistake. That phrase comes from the French Revolution, when the warning was pas d’ennemis à gauche—“no enemies to the left.” It was meant to establish strength through unity, but it quickly turned into an excuse to avoid self-scrutiny—a way out of confronting one’s own radicals by insisting the only real danger was on the other side.
This is how the American left has operated in recent years. Looking at all the ground the left has lost lately, it’s clear it was a huge mistake. Instead of taking on their own radicals and self-correcting, the left ignored uncomfortable questions and let its most extreme factions set the agenda.
The result was self-defeating overreach, with policies pushed into the mainstream that ordinary Americans couldn’t stomach. And so, despite all the cultural power they acquired, the left is now managing a movement in decline.
Daniel Stid’s warning should be heeded:
I am a conservative who has spent two decades working in and around liberal and progressive foundations. No one understands better than I do the blind spots and ideological zeal that plague left-leaning philanthropy. But I am equally sure of this: The Trump-Vance Administration’s efforts to intimidate and punish progressive funders will be a cure far worse than the affliction—for conservatives and the Republic alike.
Since taking office, President Donald Trump has authorized the U.S. military to strike at least six Venezuelan speedboats the administration suspected of smuggling drugs, killing dozens of people. The first one had 11 people aboard. Would you really need 11 people to smuggle drugs? Or was the number of people an indication that the boat was actually involved in human trafficking? If so, some people on that boat hadn’t yet broken any U.S. laws and didn’t deserve to get blown to kingdom come.
Then there’s the problem that national security officials told Congress during a closed briefing in September that, as the AP wrote, the boat “had turned around and was heading back to shore” and “was fired on multiple times by the U.S. military after it had changed course.” That doesn’t seem like a serious threat to the United States requiring lethal force.
Government shutdowns might look irrational, but they follow a familiar script. When political types gain more from the standoff than the solution, collisions become routine.
