≡ Menu

Some Links

Scott Lincicome explains some of the many problems that infect Trump’s proposal for so-called “reciprocal tariffs.” Two slices:

Among the now-regular Trump tariff announcements is his plan for eventual “reciprocal tariffs”—a concept championed by the president and his loyal trade adviser Peter Navarro that would, if enacted, set U.S. tariffs on goods from foreign counties at levels approximating the countries’ tariff and nontariff discrimination against American exports of the same products. The idea, repeatedly teased by Trump and officially announced last week, has a certain seductive simplicity: Isn’t it only fair that “we” charge “them” what “they” charge “us,” and that if “they” want duty-free access to “our” market, then “we” should have the same in “theirs”?

Alas, you will be shocked to learn that it is not actually that simple, and that—in the real world—“reciprocal tariffs” would be a catastrophically bad idea for all sorts of reasons, most of which have nothing to do with one’s stance on tariffs, free(ish) trade, or U.S. trade agreements.

Those other concerns have been covered at length—here at Capitolism and elsewhere by trade experts of all stripes—so instead we’ll focus today on the mainly practical reasons why the Trump/Navarro plan for reciprocal tariffs makes little sense.

(And that’s being kind.)

…..

Then there are domestic government policies with highly uncertain and indirect trade effects. Economists will tell you, for example, that value-added taxes are—contra the Trump team—trade neutral in theory, but whether a nation’s VAT system affects imports and exports in practice can  depend on the tax’s structure and whether, for example, local currency adjusts fully and quickly. Labor, environmental, intellectual property, and other domestic policies also can have indirect trade effects, even though they’re non-discriminatory on their face. Heck, even the metric system can be a nontariff barrier. Mimicking the CVD process for 150-plus countries, thousands of products, and thousands of government programs—not just tariffs and subsidies!—is simply impossible. So, either the Trump team will fake it, or they’ll give up.

Let’s hope it’s the latter.

My intrepid Mercatus Center colleague, Veronique de Rugy, talks with the Tax Foundation’s Erica York about the true costs of tariffs.

Ramesh Ponnuru isn’t optimistic about DOGE’s chances of significantly cutting the federal government down closer to appropriate size. Here’s his conclusion:

DOGE is the kind of initiative that both political parties have opposite incentives to hype: The Republicans say it will revolutionize government, the Democrats that it will destroy it. Musk has generated enough news and controversy to provide the illusion of long-term impact. But the conventional wisdom of just a few weeks ago — that DOGE will not substantially alter the trajectory of the federal government — remains likely to prove true. Before we conclude that Musk will curtail government in a way no one else has, let’s wait to see the receipts.

And see also this follow-up by Ponnuru.

Veronique de Rugy is not favorably impressed with the GOP’s budget plans. A slice:

It’s not as if there isn’t lots to cut—there is, especially considering the unhinged government expansions of the last four years—but it remains politically tough. As the Manhattan Institute’s Jessica Riedl notes, achieving the assumed level of cuts in the plan would require Congress to deliver the lowest discretionary spending share of GDP since the 1930s while simultaneously increasing defense and border security spending. Why would we expect Congress to have the stomach for that?

Many Republicans are putting their faith in Elon Musk’s cost cutting, but it’s not enough. Much of what needs to happen requires Congress, which apparently prefers to once again kick the can down the road.

The blueprint makes other questionable assumptions. I doubt we’ll find $2.6 trillion in extra revenue from a highly improbable 2.8 percent annual GDP growth rate, considering the approximately 1.8 percent growth baseline.

In this podcast with Reason, Randy Barnett discusses the legality of DOGE’s efforts as well as of some other of Trump’s measures.

John Sailer describes one of the many ways that institutions  of “higher learning” recruit unscholarly “activists” into ostensibly scholarly positions.

{ 0 comments }

Quotation of the Day…

… is from page 335 of the “Random Thoughts” section of Thomas Sowell’s 2010 book, Dismantling America:

Many colleges claim that they develop “leaders.” All too often, that means turning out graduates who cannot feel fulfilled unless they are telling other people what to do. There are already too many people like that, and they are a menace to everyone else’s freedom.

{ 0 comments }

Some Links

George Will hopes that the U.S. Supreme Court will agree to hear a case that will allow it to overturn the egregious 2005 Kelo ruling. Two slices:

In Kelo, the court further diluted the concept of “public use,” making it mean “public benefit.” The court upheld (5-4) the New London (Connecticut) Development Corp.’s condemnation of a not-at-all-blighted blue-collar neighborhood so some unknown bigger taxpayer might benefit. After the condemnation, the Pfizer pharmaceutical corporation proposed, for a while, building a research facility where feral cats now roam.

Justice Sandra Day O’Connor, dissenting with William H. Rehnquist, Clarence Thomas and Antonin Scalia, presciently warned that the consequences of the decision “will not be random.” Affluent, articulate, well-lawyered factions would prey upon vulnerable, less sophisticated people.

…..

The Kelo decision that diluted property rights was denounced by Vermont Sen. Bernie Sanders, a self-described socialist. It was, however, celebrated by — speaking of the predictable — a developer who, like others of his ilk, sees moneymaking opportunities in collaborations with rapacious governments empowered to expropriate the property of less isolated, not-well-connected individuals. Said Donald Trump of Kelo: “I happen to agree with it 100 percent.”

Kevin Gentry talks about the U.S. economy with Phil Gramm.

Writing in the Los Angeles Times, my intrepid Mercatus Center colleague, Veronique de Rugy, argues for cuts in taxes and government spending. Two slices:

It’s a common, politically fueled mistake to talk about cutting taxes without also talking about our fiscal situation. We’re $37 trillion in debt — going on $59 trillion in a decade — and after years of alarming growth, the annual spending deficit is roughly $2 trillion. We also must grapple with the looming entitlement crisis, and interest payments on government debt are the fastest-growing budget item. Times are changing, making fiscal responsibility more crucial than ever.

…..

A new Hoover Institution study reveals that businesses are more responsive to corporate tax changes than previously thought. Analyzing the 2017 cuts, Kevin Hassett (the National Economic Council’s new director), Jon Hartley and Josh Rauh found that a one-percentage-point reduction in the cost of capital can boost investment rates by up to 2.4%, surpassing earlier estimates.

Congress should hence prioritize making full expensing of capital investment permanent. It could also extend it to investments in structures.

Similarly, the cuts to individuals’ tax rates should be made permanent. This provision encourages work, savings and investments, especially for high earners, fostering a more dynamic and resilient economy. Recent research by Rauh and Ryan Shyu on California tax increases shows how much more sensitive high-income filers are to rate changes than most research generally assumes. The economists looked at taxpayers’ responses after Proposition 30 increased marginal tax rates by up to three percentage points for high-income households. An extra 0.8% of these taxpayers left the state as a result, and those who stayed reduced taxable income, eroding up to 61% of expected revenue within two years. This sensitivity to high tax rates and our progressive federal tax code mean that letting individual tax cuts expire will have a bigger impact than projected, and extending them will have a smaller deficit impact than most fear.

GMU Econ alum Dominic Pino reports that Trump’s nominee for Labor secretary “supports Biden’s union pension bailouts.”

Eric Boehm explains that “Social Security’s insolvency is driven by benefits for the living, not fraud by the dead.”

Phil Magness writes sensibly at his Facebook page:

Jonah Goldberg is more hawkish than I am. But he has pinpointed the problem with the Trump-aligned faction of the “Realist” foreign policy scene, and especially JD Vance.

We are not getting principled “restraint” from this crowd, as they endlessly promised us for the past 4 years. We are getting make-it-up-as-you-go rationalizations for all sorts of foreign policy belligerence, expansionist territorial agendas, incoherent tariff crusades, selective dictator-coddling, and self-serving exceptions to the “peace” they previously touted.

None of this is surprising if you’ve followed Vance’s political career or, more importantly, the many “foreign policy expert” courtiers who have groveled their way into Trump’s orbit as a way of pursuing their pet interventionist projects.

Also writing sensibly at his Facebook page is Mark Pennington:

It may well be that there is nothing either Europe or the US can do to secure victory for Ukraine. What is sickening about the Trumpian approach to this though is the evident admiration that the US administration has for Putin and some of his methods. I agreed with most of what JD Vance said last week about the lack of commitment to freedom in Europe, and the UK specifically. The problem is, you cannot take this message seriously from an administration that admires bullies. The sad truth is that freedom is under threat from the censorious leftists who govern many European states – even if they are not actually ‘in government’ – and from this new generation of ‘conservatives’ in the US – and perhaps in the years to come in Britain too – who are a total embarrassment to Ronald Reagan and Mrs. T. It isn’t the 1930s, but it’s grim nonetheless.

George Will warns of the west’s active coddling of the Russian monster Putin. A slice:

Last week in Munich, a city closer to Ukraine than Washington is to Atlanta, Vice President JD Vance told Europeans that the principal security threat they face is insufficient free speech, exemplified particularly by the refusal of other German political parties to govern in coalition with Alternative for Germany, a fascist-adjacent party sympathetic to Ukraine’s would-be executioner, Vladimir Putin.

Vance spoke two days after President Donald Trump’s 90-minute phone conversation with Putin. The day of that call, Defense Secretary Pete Hegseth declared it “unrealistic” to hope for peace negotiations through which Ukraine regains pre-2014 territories (before Russia’s seizure of Crimea) or gains NATO membership. Perhaps those two outcomes are unattainable. But Kaja Kallas, Estonia’s former prime minister and the European Union’s foreign policy chief, tartly questioned the realism of giving the Russians “everything that they want even before the negotiations have been started.”

{ 0 comments }

Quotation of the Day…

is from page 124 of Johan Norberg’s excellent 2023 book, The Capitalist Manifesto:

Sven Norfeldt, one of Sweden’s most successful entrepreneurs, once described the market to me as a minefield. Over there, on the other side, there is new knowledge, capacities, products and services that could enrich the whole of society. But our path there is blocked by a minefield of uncertainty, technological dead-ends, unpredictable consumers, shifting business cycles, interest rate changes, capricious policies and plain bad luck. We have no idea where the mines are located. The only way to find a way to the other side is to get as many people as possible to venture out. This increases the chance that someone will find a safe path that we can all follow.

DBx: It’s rather like the New Yorker inviting anyone who wishes to submit captions in its cartoon-caption contest.

{ 0 comments }

The Spectacular Economic Ignorance of Peter Navarro

Here’s a letter to the New York Times.

Editor:

Encountering, in David Leonhardt’s report, a summary of Peter Navarro’s attempted justifications of Trump’s tariffs makes the head spin (“A Disagreement on Tariffs,” February 18). Navarro’s arguments are so illogical, self-contradictory, and economically ignorant that they’d be merely laughable were he not an advisor to the President of the United States.

For example, Mr. Leonhardt writes that “Navarro argues that the U.S. is such an important market that foreign companies will cut their prices and accept lower profits rather than pass along the cost of tariffs to consumers. He also predicts that suppliers, such as those that sell parts to automakers, will relocate to the U.S.”

Where to begin? Tariffs that don’t cause American buyers to pay higher prices protect no jobs in import-competing industries. Therefore, if the goal of trade policy is to stop foreigners’ alleged ‘stealing’ of American jobs – and if Navarro is correct that U.S. tariffs are completely absorbed by foreign suppliers – then the tariffs about which Navarro boasts are utterly ineffective at promoting that goal.

It gets worse. Navarro has long complained that foreign suppliers charge “unfairly low prices” – that foreigners ‘dump’ too many goods into the American market. Yet now he tells us that Trump’s tariffs are an ingenius tool for pushing the prices charged by foreign suppliers even lower. If – contrary to fact, but consistent with Navarro’s long-time position – “unfairly low prices” of imports hurt Americans, why is Navarro bragging that Trump is muscling foreign suppliers to cut their prices even further?

Finally, Navarro – like his boss – incessantly warns of U.S. trade deficits. Yet now he crows that Trump’s tariffs will incite foreign suppliers to set up shop in the U.S., seemingly ignorant of the fact that all such moves by foreign suppliers increase the U.S. trade deficit.

In 2017 Ryan Bourne described “the spectacular economic ignorance of Peter Navarro.” In 2025 that ignorance, if anything, has grown even more spectacular.

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

{ 0 comments }

Some Links

Thomas Friedman – no doctrinaire free trader – warns wisely against Trump’s incoherent tariff ‘policy.’ Four slices:

The scariest thing about what President Trump is doing with his tariffs-for-all strategy, I believe, is that he has no clue what he is doing — or how the world economy operates, for that matter. He’s just making it all up as he goes along — and we are all along for the ride.

…..

Trump is threatening to impose tariffs on rivals and allies alike, without any satisfactory explanation of why one is being tariffed and the other not, and regardless of how such tariffs might hurt U.S. industry and consumers. It’s a total mess. As the Ford Motor chief executive Jim Farley courageously (compared to other chief executives) pointed out, “Let’s be real honest: Long term, a 25 percent tariff across the Mexico and Canada borders would blow a hole in the U.S. industry that we’ve never seen.”

…..

There is no single country or company on earth that has all the knowledge or parts or manufacturing prowess or raw materials that go into that device in your pocket called an iPhone. Apple says it assembles its iPhone and computers and watches with the help of “thousands of businesses and millions of people in more than 50 countries and regions” who contribute “their skills, talents and efforts to help build, deliver, repair and recycle our products.”

We are talking about a massive network ecosystem that is needed to make that phone so cool, so smart and so cheap. And that is Beinhocker’s point: The big difference between the era we are in now, as opposed to the one Trump thinks he’s living in, is that today it’s no longer “the economy, stupid.” That was the Bill Clinton era. Today, “it’s the ecosystems, stupid.”

…..

Instead, there is a global web of commercial, manufacturing, services and trading “ecosystems,” explains [Eric] Beinhocker. “There is an automobile ecosystem. There’s an A.I. ecosystem. There’s a smartphone ecosystem. There’s a drug development ecosystem. There is the chip-making ecosystem.” And the people, parts and knowledge that make up those ecosystems all move back and forth across many economies.

Scott Sumner is correct: “A VAT is not a tariff.” A slice:

The sky is not green, it’s blue. And a value added tax is not a tariff.  President Trump once suggested that ‘tariff’ is the most beautiful word in the dictionary, hence you might expect him to know what a tariff actually is.

You can argue that the president should have a lot of power in order to “get things done.”  You can argue that a president cannot be expected to understand basic economic principles.  But you cannot argue both points at once.

In my view, tariff is one of our ugliest words, associated with ignorance, xenophobia, statism and nationalism.

The Wall Street Journal‘s James Taranto ponders the mainstream media’s tenuous relationship with free speech. A slice:

On “Face the Nation” Sunday, the network’s Margaret Brennan quizzed Secretary of State Marco Rubio about Vice President JD Vance’s speech in Munich faulting Europe for political censorship. When Mr. Rubio rebuffed her complaint about “irritating our allies,” she invoked the reductio ad Hitlerum: She said Mr. Vance “was standing in a country where free speech was weaponized to conduct a genocide.”

Ms. Brennan would have benefited from a fact-checker. Weimar Germany had laws limiting speech, but their application against the Nazis failed to prevent Hitler’s January 1933 rise to power. His regime suspended civil liberties less than a month later via the Reichstag Fire Decree. Free expression was a distant memory by the time the Nazis begin killing on an industrial scale.

On its own, Ms. Brennan’s comment reflects ordinary inconsistency—she wants to censor speech she finds disagreeable or dangerous.

This latest podcast by GMU Econ alum Dominic Pino is worth a careful listen.

Also from Dominic Pino is this excellent criticism of what he describes as “one of the strongest displays in recent memory of the bipartisan impulse to pretend economics doesn’t exist.” A slice:

You could demagogue this as some sort of unfair scheme by greedy financiers against the little guy, as [Bernie] Sanders and [Josh] Hawley are doing. But it’s really just a commonsense intuition that banks, which have large sums of money and borrow all the time, are going to be a lot better at paying back loans than are individuals, who have comparatively little money and don’t borrow as often. Money isn’t free, and it needs to be priced somehow. Pricing by risk makes a lot of sense, and you’re a bigger credit risk than a bank is.

Jack Nicastro applauds the advent of economically sensible supersonic air travel.

Wall Street Journal columnist Jason Riley writes insightfully about the constitutionality of birthright citizenship. Two slices:

The Citizenship Clause of the 14th Amendment, which was ratified in 1868, states in part: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States.” The Trump administration argues that the phrase “subject to the jurisdiction thereof” excludes children born to people in the country unlawfully or temporarily. Although the Supreme Court has never addressed the issue directly, lower courts have interpreted birthright citizenship to include the children of illegal immigrants.

The court typically decides to hear a case when there are conflicting lower-court rulings on an issue, but so far there has been little if any such disagreement. Last week, U.S. District Judge Leo Sorokin became the fourth federal judge to block Mr. Trump’s order. “In a lengthy 1898 decision, the Supreme Court examined the Citizenship Clause,” he wrote, “rejecting the interpretation expressed in the [Trump executive order]. The rule and reasoning from that decision were reiterated and applied in later decisions, adopted by Congress as a matter of federal statutory law in 1940, and followed consistently by the Executive Branch for the past 100 years, at least.”

Judge Sorokin was appointed by Barack Obama, but judges appointed by Ronald Reagan, George W. Bush and Joe Biden have offered the same interpretation of the Citizenship Clause in blocking Mr. Trump’s order. The “Executive Order contradicts the text of the Fourteenth Amendment and the century-old untouched precedent that interprets it,” wrote U.S. District Judge Joseph N. Laplante, a Bush appointee, in a ruling earlier this month.

…..

Mr. Trump and his supporters see birthright citizenship as a reward for breaking the law. Yet the Citizenship Clause concerns children, not parents. The undocumented parents’ status doesn’t change after having a child in the U.S. Parents are still subject to fines, imprisonment and deportation depending on the circumstances.

The administration has said it will appeal the lower-court rulings, and the Supreme Court may yet decide to weigh in. Liberals are in a state of panic, but Mr. Trump campaigned on challenging the policy and there’s nothing wrong with seeking guidance from the judiciary. Most of Mr. Trump’s efforts to secure the border are polling well, but an NPR/Ipsos national survey published this month found that just 31% of respondents backed ending birthright citizenship. Mr. Trump’s gambit doesn’t amount to a constitutional crisis, but that doesn’t make it a wise use of his political capital.

{ 0 comments }

Quotation of the Day…

… is from page 378 of Joel Mokyr’s superb 2009 book, The Enlightened Economy: An Economic History of Britain 1700-1850:

The Hobbesian view that insisted that order can only be achieved through firm third-party enforcement may well be true for many societies, but it appears that for Britain in the century following Hobbes’ death (1679) it was becoming an increasingly less apt description of social reality. What this means is that we cannot really place the efficiency of the state at the center of the stage of institutional explanation of the British economic miracle.

{ 0 comments }

Some Links

Phil Magness, in an interview, explains some of the many problems with Trump’s protectionist ‘policies.’ A slice:

Tariffs have caused rapid market swings, which could negatively impact investors.

“In addition to the deadweight economic losses caused by higher prices, Trump’s tariff policies have already provoked retaliation from abroad against American-produced goods. The erratic nature of his implementation has also wreaked havoc on the stock market by creating uncertainty over threats that American firms will soon be facing higher prices on key inputs such as steel and aluminum, or uncertainty about supply chains with key trading partners like Canada and Mexico,” Magness said.

James Pethokoukis says a word or two about Trump’s proposed policy of “reciprocal trade.”

Here’s a Wall Street Journal report about some sensible U.S. Senators trying to dim the influence on Trump of the arch-protectionist Peter Navarro; it’s titled “Republican Senators Try to Curb Influence of Trump Tariff Hawk.” A slice:

U.S. Trade Representative nominee Jamieson Greer still doesn’t have a slot for a confirmation vote before the full Senate. Commerce Secretary nominee Howard Lutnick, who Trump has said will lead the trade agenda, is likely to be confirmed this week, but likewise hasn’t been in office for the major trade decisions so far.

In their absence, a singular figure has risen as a leader of the trade agenda: Peter Navarro, the president’s special counselor on trade and manufacturing, known for his pugnacious personality and maximalist approach to tariffs.

[DBx: Those of you who continue to think – or hope – that Trump’s trade ‘policies’ aren’t really about protectionism but are instead clever strategies to bargain for this, that, or the other concession from foreign governments, pay attention to what Navarro says and realize that Trump chooses to seek counsel from this man. Navarro is an arch-protectionist with – despite his PhD in economics – absolutely no understanding of trade. Navarro simply reinforces Trump’s life-long naive mercantilist instincts.]

Wall Street Journal columnist Allysia Finley isn’t swallowing the many assertions that government fraud and waste are inconsequential. A slice:

Remember being told that Joe Biden’s verbal slips were signs of normal aging? That rising crime was a figment of the public’s imagination, and chaos at the border was fabricated by MAGA Republicans?

Now the same tribunes of truth in the press proclaim that government fraud is a mirage—a pretext for Elon Musk’s Department of Government Efficiency to bulldoze vital programs. Mr. Musk “offered no evidence for his sweeping claims” that officials “had approved money for ‘fraudsters,’” the New York Times reported on Feb. 11

Who are you going to believe? Reporters at the New York Times or other reporters at the New York Times?

On Friday the Times reported that a Nevada woman pleaded guilty to filing more than 1,200 tax returns “to fraudulently claim Covid-19 tax credits of nearly $100 million.” She allegedly “used the money to gamble at casinos, take vacations and buy luxury cars” and purchase “designer clothing from Dolce & Gabbana, Gucci and Louis Vuitton.”

My GMU Econ colleague Pete Boettke talks with Russ Roberts about the socialist-calculation debate.

Amazon workers in North Carolina are no fools: As reported by GMU Econ alum Dominic Pino, they’ve just voted against unionization.

Wall Street Journal columnist Gerard Baker reports that “illiberalism is suffocating Europe.” A slice:

It took a certain chutzpah for Vice President JD Vance to lecture European leaders last weekend about their subversion of the old Continent’s democracy. This from a man who endorses his boss’s attempt to overturn the result of a legitimate presidential election, who lambastes restrictions on free speech in Britain but apparently can’t find anything bad to say about Vladimir Putin’s Russia, and whose administration, on the day Mr. Vance upbraided his hosts in Munich, was using the criminal justice system back home to blackmail the mayor of New York City into supporting its policies. The effect was a little like listening to Al Capone admonishing an associate for filing his tax return late.

But hypocrisy is the homage vice pays to virtue, and just because Mr. Vance smiles at his own team’s trashing of democratic institutions and norms doesn’t mean he’s wrong about the state of European liberalism. The examples he cited of oppressive elites stifling opposition to their hegemony are valid and troubling. The way the law has been used, in the U.K. especially, to intimidate and punish dissent against the prevailing cultural and political order is disturbing.

Jon Miltimore applauds the successes of Javier Milei.

Eric Boehm reports on some trends in the U.S.

Fiona Harrigan review’s Edward Alden’s and Laurie Trautman’s When the World Closed Its Doors: The COVID-19 Tragedy and the Future of Borders. A slice:

In late 2021, Charlotte Bellis, an unmarried journalist from New Zealand, found herself pregnant while working in Qatar, a country where that status carries the risk of jail time or deportation. A doctor advised her to get married or get out of the country. But New Zealand, which at that point still was taking drastic measures to limit the spread of COVID-19, allowed its citizens to come home only if they secured lottery-allocated spots in a government-run quarantine program. Bellis applied but was unsuccessful. Desperate, she turned to the Taliban.

The Islamic fundamentalist group said yes. Bellis made her way to Afghanistan, where she had worked and where her boyfriend was based. “When the Taliban offers you—a pregnant, unmarried woman—safe haven, you know your situation is messed up,” she wrote in The New Zealand Herald in January 2022.

Bellis continued to ask the New Zealand government for permission to return home, concerned about the risks of giving birth in Afghanistan, but it kept turning her down. Only after New Zealand’s largest newspaper publicized her story did the government change course.

When the World Closed Its Doors, by Council on Foreign Relations Senior Fellow Edward Alden and Border Policy Research Institute Director Laurie Trautman, is filled with stories like this, which remind readers of the absurd measures governments took to prevent the spread of COVID-19 across borders. These policies were ostensibly directed outward, targeting foreigners. But as is often the case with border controls, they inflicted damage internally too, infringing on citizens’ rights and going hand in hand with domestic restrictions.

GMU Econ alum Paul Mueller warns that “DEI grifters and grievance peddlers” are still on the scene.

{ 0 comments }

Quotation of the Day…

is from page 91 of Johan Norberg’s excellent 2023 book, The Capitalist Manifesto (footnote deleted; link added):

More jobs were lost in the Rust Belt in the northeastern United States between 1950 and 1980 … than in the decades that followed.

DBx: So, before the age of so-called “hyperglobalization” – before the alleged takeover of government by Milton Friedman and his army of “neoliberal market fundamentalists” – before mindless free-traders duped ordinary Americans into madly consuming foreign-made trinkets, trifles, and t-shirts while ignoring the future – before globalist elites cruelly imposed on ordinary Americans the freedom to trade as they choose – before America’s supposed “golden age of manufacturing” closed – there was job churn in the Rust Belt. Who’d a-thunk it?!

{ 0 comments }

Some Links

It’s unclear if Charles Mann – fresh from a wedding-rehearsal dinner in the Pacific Northwest – fully grasps the role of market forces in making modern life possible, but it’s quite clear that he astutely and properly understands that ordinary people today live lives that are materially far richer than were the lives of even the richest pooh-bahs of only a few generations ago. (HT Neera Badhwar) A slice:

Jefferson was one of the richest men in the new United States. He had a 5,000-acre plantation worked by hundreds of slaves, a splendid mansion in Virginia that he had designed himself, one of the biggest wine collections in America, and one of the greatest private libraries in the world — it became the foundation of the Library of Congress. But despite his wealth and status his home was so cold in winter that the ink in his pen sometimes froze, making it difficult for him to write to complain about the chill.

Jefferson was rich and sophisticated, but his life was closer to the lives of people in the Iron Age than it was to ours. This is true literally, in that modern forms of steel and other metal alloys hadn’t been invented. But it is most true in the staggering fact that everyone at the rehearsal dinner was born and raised in luxury unimaginable in Jefferson’s time.

The young people at my table were anxious about money: starter-job salaries, high rents, student loans. But they never worried about freezing in their home. They could go to the sink and get a glass of clean water without fear of getting sick. Most of all, they were alive. In 1800, when Jefferson was elected president, more than one out of four children died before the age of five. Today, it is a shocking tragedy if a child dies. To Jefferson, these circumstances would have represented wealth and power beyond the dreams of avarice. The young people at my table had debts, but they were the debts of kings.

Jefferson lived in a world of horse-drawn carriages, blazing fireplaces, and yellow fever. But what most separates our day from his is not our automobiles, airplanes, and high-rise apartments — it is that today vast systems provide abundant food, water, energy, and health to most people, including everyone at the rehearsal dinner. In Jefferson’s time, not even the president of the United States had what we have. But few of us are aware of that, or of what it means.

Mitch Daniels remembers the late, great P.J. O’Rourke, who died three years ago. A slice:

Politics has always involved a degree of pretension, but never like today, when “performative” has become perhaps the sector’s most-apt adjective. The puncturing of pretensions is a noble profession, and nobody could puncture one like P.J. As in, “Politicians are interested in people. Not that this is always a virtue. Fleas are interested in dogs.”

A college-age leftist turned libertarian, P.J. landed some of his best body shots on the soft underbelly of Big Government. “Giving money and power to government is like giving whiskey and car keys to teenage boys.” Or: “It is a popular delusion that the government wastes vast amounts of money through inefficiency and sloth. Enormous effort and elaborate planning are required to waste this much money.” Or: “If you think health care is expensive now, wait until you see what it costs when it’s free.”

James Meigs says that it’s “time to pull the plug on ‘environmental justice.'”

My intrepid Mercatus Center colleague, Veronique de Rugy, warns us to “beware of the tax harmonizers.”

The Wall Street Journal‘s Editorial Board offers evidence of government fraud. A slice:

No proof of fraud? How much do you want?

A Government Accountability Office report last spring estimated the “federal government could lose between $233 billion and $521 billion annually to fraud.” The federal auditor said “a government-wide approach is required to address it,” and recommended that the Treasury “leverage data-analytics capabilities” to stop questionable payments. That’s what DOGE is trying to do.

GAO earlier estimated that 11% to 15% of unemployment benefits during the pandemic were fraudulent, totalling between $100 billion and $135 billion. Some went to transnational gangs, prisoners and state-sponsored hackers. The Labor Department inspector general estimated at least $191 billion in improper pandemic unemployment payments.

Jeff Jacoby is rightly appalled by Trump’s lust for the U.S. government to grab more territory. A slice:

‘I NEVER imagined,” former NATO secretary general Anders Rasmussen wrote in a Wall Street Journal column last week, that “I would hear a US president declare his intentions to ‘expand our territory,’ as Donald Trump did in his inaugural address.”

Many things about President Trump’s inaugural address were unusual, but his unabashed call for enlarging the United States was indeed startling. (He also proclaimed, in reference to the Panama Canal, that “we’re taking it back.”) It was a jolting departure from the norm of the past century, when American presidents have often used their inaugural addresses to renounce any claim on other nations’ lands.

Upon taking the oath of office in 1949, for example, Harry Truman — contrasting America with the Soviet Union — emphasized that “we have sought no territory.” Herbert Hoover assured the world in 1929 that Americans “have no desire for territorial expansion.” Nearly a decade earlier, Warren Harding had stressed that the United States “never has sought territorial aggrandizement through force.” Even William McKinley, on whose watch the Spanish possessions of Guam, Puerto Rico, and the Philippines would be acquired by the United States, insisted in his inaugural address that Americans “want no wars of conquest” and “must avoid the temptation of territorial aggression.”

{ 0 comments }