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… is from page 277 of Historical Impromptus, a 2020 collection of some of Deirdre McCloskey’s work on economic history; this quotation, specifically, is from McCloskey’s March 10th, 1991, review, in the Chicago Tribune Book World, of Robert Reich’s The Work of Nations:

We do not really know what the balance of trade is, nor does it matter.

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The Editorial Board of the Wall Street Journal is having none of Gavin Newsom’s and other progressives’ predictable but specious attempts to blame the L.A. wildfires on carbon emissions. A slice:

Look out for “hydroclimate whiplash” coming to a media website near you. That’s the term the climate left is suddenly using to explain the Los Angeles wildfires, or to put it more baldly, to change the subject from the failure of the state and local government to contain the fires that often accompany Santa Ana winds.

The theory is that climate change caused two especially wet winters in California in 2023 and 2024. This led to lush vegetation growth. Perhaps you recall the ebullient stories about the blooming desert and wildflower explosion. But in recent months, the theory goes, climate change has also caused a dry spell that has turned that vegetation into tinder for fires. Ergo, “hydroclimate whiplash.”

So climate change explains wet and dry seasons, which follows the progressive line that climate change is responsible for every natural disaster except for perhaps earthquakes. In today’s climate orthodoxy, bad weather is always man-made.

This ignores that California’s climate has long been variable with dry years following wet ones. The nearby chart from the California Office of Environmental Health Hazard Assessment shows precipitation in the state going back 130 or so years. There are wet and dry spells. The last couple of decades have had more dry years, but then so did the 1910s and 1920s when carbon emissions were far less than they are today.

The climate is changing, and human activity affects the climate. But variable rain and snowfall patterns in California are to be expected. Fires will occur as a result. Rather than blame the climate for wildfires, the obligation of public officials should be to prepare for them and, when they inevitably occur, mitigate the damage.

It’s on that score that Gov. Gavin Newsom, the Legislature in Sacramento, and the mayors of Los Angeles have failed. And, judging by the budget Mr. Newsom introduced on Friday, the Governor wants to keep on failing. His proposal skimps on wildfire prevention while boosting spending on Medicaid, green energy and payoffs to the teachers’ unions.

Phil Magness makes clear that Karl Marx was never an important economist. Three slices:

To [English professor Alex] Moskowitz, Marx is an epochal figure in the development of economic theory, and thus, it is “necessary” to understand the discipline’s history. To almost any competent historian of economic thought, however, Marx was never more than a peripheral figure in the economics profession.

One need not take my word for this assessment. The famous progressive economist John Maynard Keynes concurred. In 1925, Keynes visited the Soviet Union as part of a delegation of distinguished academics from the United Kingdom. He met with leading Marxist thinkers, including Leon Trotsky, who expressed hope that Keynes would steer Britain in a socialist direction. Keynes recorded a very different assessment of the Marxist economists he encountered upon his return to Cambridge. The Soviet economists, he wrote, had set up Marx’s Das Kapital as their “bible, above and beyond criticism.” To Keynes, however, Marx’s magnum opus was nothing more than “an obsolete economic textbook which I know to be not only scientifically erroneous but without interest or application for the modern world.”

…..

In fact, most economist contemporaries of Marx did not even notice Das Kapital at the time of its publication or for many years later. When marginalist economist Philip Wicksteed happened upon it in 1884, he composed a withering “Jevonian” critique of Marx on account of its faulty theory of value. Additional problems in Marx’s system became apparent by the decade’s end, especially as it struggled to find a solution to the so-called “transformation problem.” Under Marx’s system, labor is operationalized as both an input of production and a priced good. This creates a mathematical circularity in practice, and Marx’s attempts to solve it in the posthumously published notes that became Volumes 2 and 3 of Das Kapital were generally regarded as unsatisfactory.

…..

Within the field of economics, Marx remains a non-entity for the simple reason that his theories have not withstood the scrutiny of other practitioners in the discipline. They not only failed the test of time—they never took hold among economists in the first place due to deficiencies in Marx’s system at its outset. When an English professor such as Moskovitz ventures far afield of his research competencies and declares that Marx was a preeminent figure in the history of economics, he only reveals his ideological biases while adding nothing of substance to the discipline he purports to critique.

William Carney’s excellent letter in the Wall Street Journal reveals that that which is “unseen” can sometimes easily be seen along side that which is seen:

Thomas Sowell and others state that the federal government owns 25% of the nation’s land (“The World’s Biggest Landlord Is Washington,” op-ed, Dec. 26). According to the Public Land Law Review Commission’s report in 1970, it owned one-third. So, there has been some progress.

In a letter to the editor (Jan. 7), Thomas Straka notes that much public land is “scrub desert” that would be difficult to sell. I pointed out in a 1998 book chapter that much of the poor quality is the result of the Interior Department’s multiple-use policy, which allows multiple ranchers to overgraze the land. Driving in the West, I could always identify whether the land’s ownership was private or public: One side of the fence was green and the other was wasteland. And it continues.

GMU Econ alum Dominic Pino warns that Trump’s proposed tariffs will inflict damage on the U.S. market for energy. Three slices:

Donald Trump’s promises of tariffs against Canada and Mexico would be harmful to the U.S. economy, upending numerous cross-border business relationships. Tariffs would violate the terms of the United States–Mexico–Canada Agreement (USMCA) that Trump’s first administration negotiated and that Trump said was “the most important trade deal we’ve ever made by far.” And, unlike at any point in the past, they would affect U.S. energy markets.

Tariffs on our North American allies, if they truly will be on all products as Trump has promised, would affect about 70 percent of U.S. crude oil imports. Danielle Smith, the premier of Alberta (Canada’s top oil-producing province), met with Trump and said she is not expecting any exemptions for the 25 percent tax on Canadian imports.

…..

Unlike in the past, when many U.S. energy imports came from the Middle East, the No. 1 source of imported crude oil today is Canada. By far. Almost 60 percent of U.S. crude oil imports in 2023 came from our northern neighbor.

Almost 70 percent of that Canadian oil goes to the Midwest, where it is processed in world-class refineries that employ thousands of Americans. The oil from the tar sands of Alberta is very difficult to refine because of its chemical makeup, and many U.S. refineries in the Midwest are specially built to handle it. Refining is one of America’s key energy strengths, and the sector is integrated with the global marketplace for oil and petroleum products. Refined products are shipped from the Midwest to the Gulf Coast for export.

…..

Aside from violating the USMCA, which Trump claims was one of his biggest accomplishments, 25 percent tariffs on all goods from Mexico and Canada would blow up years of progress toward an integrated North American energy market and invite retaliation by the No. 1 buyer of U.S. energy exports. It would not be a good start for an administration prioritizing U.S. energy production and security.

Pierre Lemieux ponders business people and international trade.

Michael Chapman is no fan of minimum-wage legislation. And nor is Eric Boehm.

Emma Camp reports that “41 percent of Chicago teachers were chronically absent last year.”

My intrepid Mercatus Center colleague, Veronique de Rugy, talks with the Cato Institute’s Michael Cannon about getting government out of health care.

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… is from page 411 of the 2016 second edition of Thomas Sowell’s excellent volume Wealth, Poverty and Politics (original emphases):

[E]ven if every American man, woman and child had equal individual incomes, that would still leave substantial inequalities in household incomes, because households that are in the top 20 percent of income recipients today contain millions more people than households in the bottom 20 percent. These larger households would remain in higher income brackets if incomes were made equal among all individuals. If we restrict income inequality to adult, there would be even more inequality between households, since households consisting of a single mother with multiple children would not have nearly as much income – either total income or income per person – as households consisting of two parents and two children, even if welfare paid the single mother as much as other adults received from working.

DBx: Yes. And it follows that if government or god somehow managed to bring about equality of incomes among households, rather than among individuals, inequality of individual income might rise if the differences between the numbers of persons in different households are sufficiently large.

Most professors, pundits, preachers, and politicians who pound their fists self-righteously in opposition to “inequality” never pause to think about inescapable realities such as these. And these. Emoting and displaying one’s imagined moral superiority are oh so much easier and enjoyable than thinking.

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For a variety of reasons, I want to post this graph here. It is constructed by me from the St. Louis Fed’s FRED Data from two different FRED files: total number of manufacturing workers in the U.S.  (“MANEMP“) and total number of nonfarm workers in the U.S. (PAYEMS). I divided the former by the latter.

The resulting graph shows – from 1939 through 2024 – the percentage of nonfarm workers in America employed in jobs classified as “manufacturing.” This percentage peaked in 1943 (at just shy of 38%) and is today (2024) at a low of 8.2%. (The latest monthly figure – December 2024 – has this rate down to 8.1%. Also, the highest monthly figure is for November 1943, at 38.8%.)

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Wall Street Journal columnist Allysia Finley writes that “Gavin Newsom promised to ‘Trump-proof’ the Golden State. If only he’d fireproofed it instead.” Here’s more:

Start with its environmental obsessions. The Los Angeles Department of Water and Power in 2019 sought to widen a fire-access road and replace old wooden utility poles in the Topanga Canyon abutting the Palisades with steel ones to make power lines fire- and wind-resistant. In the process, crews removed an estimated 182 Braunton’s milkvetch plants, an endangered species.

The utility halted the project as state officials investigated the plant destruction. More than a year later, the California Coastal Commission issued a cease-and-desist order, fined the utility $2 million, and required “mitigation” for the project’s impact on the species. This involved replacing “nonnative” vegetation with plants native to the state. You have to chuckle at the contradiction: California’s progressives want to expel foreign flora and fauna but provide a sanctuary for illegal immigrants.

…..

Wealthy liberals have long been shielded from the consequences of their government’s blunders. State regulators until recently even suppressed insurance rates for high-priced homes by barring insurers from fully pricing in wildfire risk and reinsurance costs.

Like King Canute, who tried to command the tides, Insurance Commissioner Ricardo Lara on Thursday prohibited insurers from dropping homeowners in areas affected by the fires. People who lose their homes deserve sympathy. But if insurers aren’t allowed to limit their liabilities or adjust premiums based on risk, they will instead raise rates on everyone.

Democrats think they can wave away economic reality, much as they do when they pretend there are no costs to raising the minimum wage or taxes. Will the fires prompt Mr. Newsom and company to rethink their delusions? Forget it, it’s La La Land.

Peter Earle and Tom Savidge warn of the harmful consequences destined to arise as a result of the recent hike that state’s minimum wage.

Arnold Kling wisely counsels that we mind our economic metaphors. Two slices:

I believe that the supply-and-demand metaphor is useful. It guides a student toward thinking of prices as reflecting overall systemic forces, rather than treating prices as dictated by all-powerful businesses.

It also is important to understand that supply and demand curves intersect. I wish that we did not call the intersection point “equilibrium,” because that suggests stability. The metaphor I would use instead is “market-clearing price,” meaning the price at which there is neither a shortage nor a surplus. The student should understand why we expect shortages and surpluses to be only temporary, unless the government imposes price controls.

I like the metaphor of “roundabout production.” It can describe a production process in which you arrive at final output by first building tools to produce that output, which is how Austrian economics thinks of capital equipment. But it can also describe the process of obtaining output through trade, as in David Friedman’s classic description of Americans “growing automobiles” by growing wheat, loading the wheat onto ships for Japan, and having the ships come back carrying automobiles.

…..

Another metaphor that disturbs me is what I call the GDP factory. You think of the entire economy as producing a single good. When “aggregate demand” falls off, the factory/economy lays off workers. Spending creates jobs, and jobs create spending. Newspaper stories about the economy are forever describing it in such terms. Worse, and, sad to say, this metaphor is hardly limited to non-economists. Much of mainstream macroeconomics uses this metaphor.

I prefer to think of job creation as businesses discovering new patterns of sustainable specialization and trade. They are sustainable because everyone involved earns a profit. When something happens that makes a business unprofitable, the pattern gets broken and workers get laid off.

In fact, non-economists are not the only ones stuck in misleading metaphors. In my opinion, there are many metaphors used by economists that lead to more confusion that insight.

One such metaphor is the metaphor of perfect markets. A perfect market requires a simple good with very many sellers competing on a level playing field. There is a “fundamental welfare theorem” which says that perfect markets foster efficiency according to a criterion known as Pareto Optimality.

But in practice, the metaphor of perfect markets almost never applies. Almost every real-world market “fails” in that it violates at least one condition required for perfection.

Because “market failure” is everywhere, many economists argue for government intervention in a variety of markets. This I regard as an intellectual swindle. Just because the market will not produce the perfect outcome does not mean that government intervention will do so.

Interventionists accuse free-market economists of believing that markets are perfect. But in fact, free-market advocates look at markets and government intervention as processes. We see the market process as doing a better job of providing continuous improvement than the government intervention process.

My Mercatus Center colleagues Liya Palagashvili and Revana Sharfuddin report the results of their new research on government interventions into the labor market. Two slices:

Freelancing, platform-mediated “gig” work, and other forms of self-employment are at an all-time high in the United States. Over a third of America’s workforce engaged in some type of independent work in 2023. While independent work continues to play a larger and unprecedented role in the economy, efforts have sprung up in recent years to regulate it.

Most notably, stricter worker classification laws, such as the ABC test, have emerged as the key response to tackle potential cases of misclassification (e.g., when a worker is functionally an employee but legally classified as an independent contractor). An ABC test limits the circumstances under which a worker can legally work as an independent contractor. Supporters of ABC test laws argue that those laws can address misclassification and induce employers to reclassify independent contractors as employees to comply with the law, thereby increasing the share of workers who are employees.

…..

Our findings show that the ABC test does not lead to more workers becoming W-2 employees. Instead, an ABC test caused significant declines in employment: traditional (W2) employment fell by 4.73%, self-employment fell by 6.43%, and overall employment fell by 4.79%. Occupations with high shares of independent contractors experienced the largest reductions in W-2 employment.

These results suggest that ABC tests are not altering the worker composition, with more workers becoming traditional W-2 employees as intended, but they are reducing employment for both W-2 employees and self-employed workers.

On this matter, Trump is correct: Wind power is not an economically viable source of energy.

Here’s the abstract of a new paper by Leonardo D’Amico, Edward Glaeser, Joseph Gyourko, William Kerr, and Giacomo A. M. Ponzetto:

We document a Kuznets curve for construction productivity in 20th-century America. Homes built per construction worker remained stagnant between 1900 and 1940, boomed after World War II, and then plummeted after 1970. The productivity boom from 1940 to 1970 shows that nothing makes technological progress inherently impossible in construction. What stopped it? We present a model in which local land-use controls limit the size of building projects. This constraint reduces the equilibrium size of construction companies, reducing both scale economies and incentives to invest in innovation. Our model shows that, in a competitive industry, such inefficient reductions in firm size and technology investment are a distinctive consequence of restrictive project regulation, while classic regulatory barriers to entry increase firm size. The model is consistent with an extensive series of key facts about the nature of the construction sector. The post-1970 productivity decline coincides with increases in our best proxies for land-use regulation. The size of development projects is small today and has declined over time. The size of construction firms is also quite small, especially relative to other goods-producing firms, and smaller builders are less productive. Areas with stricter land use regulation have particularly small and unproductive construction establishments. Patenting activity in construction stagnated and diverged from other sectors. A back-of-the-envelope calculation indicates that, if half of the observed link between establishment size and productivity is causal, America’s residential construction firms would be approximately 60 percent more productive if their size distribution matched that of manufacturing.

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… is from page 60 of the print-edition version, in the January/February 2025 issue of Reason, of Johan Norberg’s superb essay (forthcoming on-line) “The Real Threat Is An Isolated China” (link added):

Trump has often complained that China is the biggest beneficiary of the iPhone, just because the devices are often assembled there. But when researchers Kenneth L. Kraemer, Greg Linden, and Jason Dedrick dissembled and iPhone 7 in 2018, they found that almost all of its value was captured by Western producers of parts, including hundreds of thousands of American researchers, designers, programmers, salespeople, marketers, retailers, and warehouse workers. China just got 1.3 percent of the price paid for an iPhone, and that offshoring made it possible to move U.S. labor to the more value-added parts of the supply chain.

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In the Spring of 2023 I had the honor of delivering, at the Richmond Fed, the annual Sandridge Lecture to the Virginia Association of Economists. The text of that lecture – the title of which is “The Role of the Economic Scholar in Highly Politicized Society” – is available here. And pasted below are two slices from it.

I learned in ECON 101 – or, ECON 252 as Principles of Microeconomics was numbered at my undergraduate institution, Nicholls State University – that reality is vastly more complex than it appears to our untutored gaze or romantic imagination. I learned also the related fact that unintended consequences are commonplace. I learned that, as Thomas Sowell says, reality isn’t optional; it’s mandatory – and also, again as Thomas Sowell puts it, there are no ‘solutions,’ only trade-offs – that market signals guide us to act as if we have far more information than we really do or can possibly ever hope to possess.

Emphasizing these principles of economics today is especially important because today we do indeed live in a highly politicized society. In such a society, the pursuit of the personal dominates respect for principles. If some flesh-and-blood persons can be seen who would benefit – or even simply thought to benefit – from some course of action, politics demands pursuit of that course of action. No more justification is necessary than that these visible beneficiaries will enjoy anticipated gains.

Indeed, I think that a good definition of “a politicized society” is “a society that elevates attention to that which is seen – to that which grabs our senses and stirs our concerns at the moment – in disregard of principles. Insofar as society is politicized, principles and rules are cast aside if sticking to these is perceived as slowing or otherwise compromising our efforts to deal with the problems and concerns du jour.

Principles and rules protect and nurture that which is unseen; politics embraces only that which is seen. One consequence is that as society becomes more politicized – as society focuses ever-more intently on addressing today’s visible problems (and “problems”) with whatever means it can muster – that society serves its citizens’ long-run interests more poorly. It abandons the wisdom of principles for the wiles and wilds of pragmatism. A politicized society is in dire need of being reminded of the importance of principles.

…..

Among the most articulate and active champions on the right for industrial policy is Oren Cass, an advisor to Mitt Romney’s 2012 presidential campaign and founder of American Compass. The name of Mr. Cass’s organization is revealing: He believes that the market’s manner of allocating resources for investment purposes is – his term – a “drunk donkey.” It meanders aimlessly if stubbornly. Industrial policy is a means of giving the market proper direction – a means of sobering the donkey up, bridling the beast, and then riding it into the economic promised land under the guidance of a map drawn up by Oren Cass.

But Mr. Cass’s belief – and hubris – is easily exposed as error by a good student of ECON 101. The market does not meander aimlessly or stubbornly. Indeed, it doesn’t meander at all. This lesson is central to ECON 101. The market is steered by market signals – by prices, interest rates, asset values, and profits and loses – signals that reflect information gathered and transmitted from around the globe by individuals spending and investing their own money. This lesson is central to ECON 101.

It follows that, in markets, firms profit when they please consumers at and go bankrupt when they don’t. Amazon and Apple didn’t, in the past few decades, spring up aimlessly; and become successful companies by pure chance. Sears and A&P didn’t, a century ago, become successful companies by chance. Nor is Sears’s and A&P’s recent demise the result of chance. And when, as is inevitable in a market economy, Amazon and Apple eventually close up shop, that won’t be by chance.

Competitive markets are the only real source of detailed information we have for discovering what consumers want and how best to meet these wants. Conveniently, competitive markets also supply to market participants appropriate incentives to heed market signals.

I needn’t tell you that these signals are never perfect, but everyday experience tells us that they nevertheless work remarkably well, at least by any reasonable criterion.

Charlie Goetz – one of many great Virginia economists – once said that the ultimate economist’s question is: Compared to what? Getting in the habit of asking this question is another lesson learned in a well-taught ECON 101 course.

And so when I hear people, Oren Cass and many others, accuse the market of ‘not working,’ I ask: Compared to what? Compared to what we can imagine being achieved by God? Yes indeed; by this standard the real-world market works miserably; it’s a dumpster fire of failures.

Compared to perfectly competitive general equilibrium of the sort that looks so pretty in advanced textbooks and papers written by masters of ECON 999? Yes indeed; by this standard, too, the real-world market works poorly; it’s chock-full of errors, irrationality, and other imperfections.

But – and here’s another lesson from ECON 101 – unrealistic standards such as these are inappropriate. An appropriate standard of comparison is the real world without capitalist markets. Does any person seriously deny that those of us in capitalist economies today enjoy a material standard of living immeasurably higher than was the material standard of living of our pre-capitalist ancestors, nearly all of whom slept on dirt floors in huts with thatched rooves and no indoor plumbing? Does any person seriously deny that those of us in capitalist economies today enjoy a material standard of living far higher than was that of ordinary people in communist and socialist countries of just a few decades ago?

When I look around, I’m continually astonished at the marvels of our modern world. Supermarket shelves continue to be stocked full with goods from around the world, all affordable. Paris and New York – and Richmond – continue to be fed. Daily. We can talk in real time with people literally on the other side of the globe by pulling out from our pockets our little slabs called ‘smartphones.’ And if we’re struck with the fancy to send to those to whom we are talking pictures of what we’re eating or of our new puppy, we do that, too. It takes a matter of seconds. We drive automobiles, we fly through the air, we have Lasik surgery and antibiotics, and we live in air-conditioned homes with wi-fi and Netflix and Alexa. And all of these marvels are so routine that we don’t even think about them. This regularity is itself a marvel! I say that by any reasonable standard markets work splendidly.

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Here’s a letter to a long-time “unsympathetic but friendly” Café patron.

Ms. C__:

Thanks for sending Michael Pettis’s recent X-thread on trade. I’m afraid, however, that I don’t share your high opinion of his string of tweets. It’s a march of missteps. I haven’t the time to detail them all, so I’ll address just one of his foundational fallacies.

He’s wrong to write that in a world in which governments use neither subsidies nor protectionist interventions “countries [would] export goods in which they have a comparative production advantage in order to pay for the import of goods in which they don’t. Trade, in that world, is broadly balanced, and international capital mostly funds trade finance and direct investment in developing countries with high investment needs.”

Nonsense.

There’s absolutely no reason to believe that in a world with no subsidies or protectionism no country would run persistent trade (or current-account) deficits, and that little or no capital would be invested (and re-invested) abroad in long-term projects in advanced economies. Insofar as markets are free, capital grows in size and flows to where expected returns are highest – which generally is in advanced economies. As long as economies differ in the expected returns they offer to investors, economies that offer the highest returns will consistently receive disproportionately large amounts of both short-term and long-term investment.

Investors do not allocate their funds according to countries’ “investment needs”; investors allocate their funds according expected returns.

Because human ingenuity in free markets is practically unlimited, investment returns in advanced economies are not, contrary to Pettis’s sophomoric assumption, destined to be lower than in “developing” countries. The very reason an economy such as that of the U.S. is advanced is that it treats capital with respect and welcomes entrepreneurship and creative destruction. Investors love such countries. The very reason “developing” countries are not developed is that they do not treat capital with sufficient respect, and they resist entrepreneurship and creative destruction. Investors hate such countries.

The persistent annual trade deficits that America has run ever since the collapse of Bretton Woods and its policy of capital controls reflect – also contrary to Pettis’s assumptions – neither excessive American consumption nor ‘excessive’ foreign savings being forced (as he put it in his 2020 book with Matthew Klein) on us allegedly unfortunate Americans. Instead, they reflect the enormous attractiveness of the American economy to global investors. As long as, and insofar as, we keep our markets reasonably free and continue to embrace market-tested creative destruction, we will continue to attract lots of foreign capital. This state of affairs is perfectly natural, sustainable, and – best of all – wonderful.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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Scott Lincicome shares his big questions for 2025. A slice:

We now know that this is basically what happened in 2024: China’s longstanding economic headwinds—demographics, productivity, debt, social/political control, etc.—combined with continued weakness in local property markets, depressed consumer sentiment, policy-driven industrial overcapacity, investor doubt, and heightened trade tensions to keep China’s economy in the doldrums. (Hooray, central planning!)

GMU Econ alum Dominic Pino reports that “price controls have made California wildfire recovery harder.” Two slices:

Another California policy decision will make recovery efforts from these fires more difficult than they otherwise would be: price controls on insurance.

Insurance price is supposed to be correlated with risk. Higher risk, higher price. Living in an area prone to wildfires is a risk for property insurance. Rather than allowing market prices to take account of that risk, California has heavily regulated the insurance industry for decades.

…..

After decades of strict price controls, the average price of insurance in California is well below the market rate. California’s rate suppression, the difference between the fair actuarial rate and the rate allowed by regulators, is 29 percent for homeowners insurance, the highest of any state. As economist Brian Albrecht put it, California “forces the biggest gap between rates and risk in the nation.”

“Oh, those greedy insurance companies are made of money, they can eat the losses,” some might think. The ICLE paper shows that from 1991 to 2016, California homeowners insurers made total cumulative profits of $10.2 billion. But in 2017 and 2018, they lost a total of $20 billion from wildfires. If an entire industry can lose twice as much money in two years as it made in total the 25 years prior, that’s not going to be sustainable.

If – as is practically inevitable – the irresponsibility of California’s government will result in U.S. taxpayers footing much of the bill for the damage caused by the Los Angeles wildfires, Arnold Kling’s proposal for conditions on such federal aid makes great good sense.

Four Independent Institute scholars discuss the L.A. wildfires.

Kevin Corcoran reports on Diana Mutz’s interesting findings about the general public’s attitudes toward international commerce. A slice:

Far and away, the most common objection to international trade is the belief that it costs American jobs. But here’s a result that surprised her (and me!). She also looked at how American’s felt about foreign direct investment (FDI), where foreign companies invest in the United States, building their factories here and hiring Americans to work in those factories. What Mutz discovered was that voters opposed to trade because they believed it caused Americans to lose their jobs were also opposed to FDI, even when they believed it would create jobs for Americans.

Wall Street Journal columnist Holman Jenkins is appropriately critical of the abuse of antitrust to harm consumers. A slice:

In Disney, Fox and Warner, retrograde players were nevertheless trying to get ahead of the curve by repackaging their sports-heavy traditional channels—ESPN, TBS, Fox and Fox Sports, etc.—into a skinny bundle to be sold over the internet to sports fans who no longer are interested in being cable subscribers.

Enter U.S. District Judge Margaret M. Garnett. She issued a preliminary ruling last year in favor of online competitor Fubo and invented a new market category that Disney, Fox and Warner could be accused of “monopolizing.”

Antitrust survives on such market-definition sleight-of-hand. In every possible way, though, the category she invented is meaningless to consumers. She specified “nationally” broadcast games though sports fans mostly care about their local teams and don’t care who else is watching “nationally.” She cited traditional TV apparatus never mind that almost any game a customer craves to watch is available “nationally” now via an online provider.

Bob Graboyes offers new portraits of America’s presidents.