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George Will continues to warn of the dire consequences of the U.S. government’s worsening fiscal incontinence. Two slices:

This nation, tobogganing swiftly down a steep slope of fiscal irresponsibility, barely notices a blur of alarming milestones. Last week, we sped past this one: A $1.1 trillion deficit in the first six months of fiscal year 2024 that began Oct. 1 resulted in almost as many dollars spent on debt service ($429 billion) as on defense ($433 billion)

This, at the most menacing geopolitical moment since 1945, makes one hope that JPMorgan Chase CEO Jamie Dimon was radically wrong in saying recently that interest rates could reach 8 percent or more in coming years. If they do, deficits will explode even before the Social Security and Medicare trust funds are exhausted, within 10 years.

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It is counterintuitive to advocate more direct political control of the Fed amid accumulating evidence that politics is the problem. That the biggest threat to American democracy is American democracy. The fiscal incontinence propelling the nation toward an utterly predictable crisis reflects the majority’s preference: Let’s make unconsenting (because unborn) future taxpayers — debt is taxation, including the tax of inflation, deferred — pay for a significant portion of our consumption of government services. Institutional tinkering with the Fed is no substitute for mature politics.

The Editorial Board of the Wall Street Journal decries Biden’s Trumpian embrace of tariffs. A slice:

While Mr. Biden has scrapped nearly every Trump policy, he has maintained most of his predecessor’s tariffs despite their economic harm. The Detroit Free Press reported in 2019 that Ford worker profit-sharing checks would be 10% higher if not for Mr. Trump’s 25% tariffs on steel and 10% on aluminum.

An analysis by the Peterson Institute for International Economics found that each job “saved” by Mr. Trump’s steel tariffs cost consumers and businesses more than $900,000. Employment in iron and steel mills has fallen by about 3,000 since the Section 232 tariffs took effect in 2018.

Here’s Reason‘s Eric Boehm on Tariff Man Biden. A slice:

With the announcement, Biden has pulled off an impressive set of own goals. Not only does the call for higher tariffs undermine his own campaign’s attack on Trump’s plans to hike tariffs, but it also underscores Biden’s willingness to play favorites with economic policy, seemingly without regard for those who will face higher prices as a result. Remember, higher tariffs meant to protect one industry create higher costs down the supply chain. A promise to raise tariffs to protect steelworkers is a promise to raise prices for industries that use steel, and the past six years have provided a real-life experiment in how that works: the cost of Trump’s tariffs was nearly entirely paid by American consumers and downstream industries.

Indeed, if higher tariffs were the solution to anything, wouldn’t there be evidence of that by now? American steel and aluminum production has flatlined since Trump’s tariffs were imposed six years ago, and America’s biggest steelmaking company, U.S. Steel, is up for sale. Trump promised that protectionism was the path to a steelmaking renaissance, and that’s clearly not been true—but maybe it’ll work if Biden mashes the button a little harder? How does that make sense?

Also writing about Tariff Man Biden’s newly announced intention to raise tariffs on steel impose punitive fines on Americans who purchase steel are Clark Packard, Scott Lincicome, and Alfredo Carrillo Obregon. Two slices:

It is true that China subsidizes its domestic steel industry, but very little of that steel ends up in the United States due to our aggressive use of tariffs, i.e., more than five dozen trade remedies (antidumping and countervailing duties) measures, the Trump‐​Biden “national security” tariffs on most steel and aluminum imports, and the Section 301 tariffs on a wide range of Chinese imports. As Bloomberg notes, thanks to these measures China “accounted for just 600,000 metric tons of steel imports in 2023, […] out of a total US steel imports of 25.6 million tons”—or a mere 2.3 percent of all steel imported into the United States last year.

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Yet once in office, President Biden maintained (and defended in court) virtually all of the tariffs he inherited from the Trump administration. As [Erica] York noted on X (formerly Twitter), more trade war duties have been collected under the Biden administration than the Trump administration. As bad if not worse, Biden’s active defense of Trump‐​era tariffs has, as Scott Lincicome explained in a recent column, made it more likely that former President Trump will be able to impose the devastating 10 percent tariff on all imports and 60 percent tariff on all Chinese imports that he’s been promising on the campaign trail. Both are uncomfortable truths for a Biden campaign that intends to attack Trump’s tariff proposals as harming American consumers and the economy.

Erica York separates tariff fact from tariff fiction. Six slices:

A tariff is a form of tax. And like any other tax, tariffs impose economic costs that reduce our standard of living. But some talk of tariffs as though these taxes can magically raise revenue for the government while making trade fairer, citizens more prosperous, and business endeavors more productive. Do tariffs defy the laws of supply and demand and lift our standard of living?

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Recent empirical evidence, using a variety of methods, indicates near complete pass‐​through of the 2018–2019 tariffs to US consumers. Mary Amiti, Stephen J. Redding, and David Weinstein found that the full burden passed through, costing US consumers and the firms that import foreign goods an additional $3 billion per month in added tax costs and $1.4 billion in deadweight loss (or lost income).

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Exporters’ global competitiveness may be further eroded by tariff‐​induced currency changes. When the United States imposes a tariff on goods from China, for example, imports fall as does the sale of US dollars in exchange for Chinese yuan. A lower global supply of US dollars pushes up the value of the dollar, which makes US exports relatively more expensive on the world market. (To take an extreme and simple example, suppose a bushel of grain sells for $10, and a buyer in China who wishes to purchase it must exchange 10 yuan for $10. Now suppose the dollar doubles in value. The buyer would have to exchange 20 yuan for $10 to purchase the same bushel of grain, making it much more expensive. Or for the bushel of grain to stay the same price in yuan in China, the US exporter would have to cut its price in half to $5.) As a result of these dynamics, tariffs can cause exports to fall, with exporters thus bearing a portion of the tariff burden.

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Empirical research from David Furceri and others examined 151 countries from 1963 through 2014 and found that tariff increases lead to economically and statistically significant declines in domestic output and productivity, as well as increases in unemployment and inequality. Fajgelbaum and others estimated that US consumers and firms that buy imports lost $51 billion while US producers gained $9.4 billion, implying substantial redistribution from importers to the US government and protected industries.

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And perhaps worse, protectionism encourages rent seeking behavior and discourages innovation and research and development. Analyzing protectionist steel policies from the 1980s, economists Stefanie Lenway, Randall Morck, and Bernard Yeung found that steel protection boosted lobbying efforts for less innovative firms and discouraged productive firms from engaging in research and development. They concluded that protection “confers private benefits upon lobbyers’ shareholders, senior workers, and top managers … appears to reduce returns to true innovation and encourage innovative firms to exit. These dynamic costs of protection … are potentially much more serious than the distortions shown in standard trade theory diagrams.”

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As Daniel Griswold and Andreas Freytag documented in a 2023 Cato Institute paper and as Figure 6 shows, the 2018–2019 tariffs imposed by the Trump administration and since maintained by the Biden administration “had no discernible impact on the relative size of the trade deficit”; if anything, the deficit actually increased slightly versus where it was at the end of the Obama administration. Citing some of the aforementioned studies on the tariffs’ other effects, Griswold and Freytag thus conclude that “higher tariffs did exactly what the economics literature predicted they would do: impose net economic harm without changing the current account balance.”

Jacob Sullum argues that “SCOTUS missed a chance to protect peaceful protestors.”

Josh Hendrickson writes about “inflation we can feel but don’t measure.”

“More evidence that organized labor is progressivism, and progressivism is organized labor.”

Andrew Byers offers counsel worth hearing about U.S. government involvement in foreign affairs.

Jay Bhattacharya tweets:

By punishing media organizations that tell inconvenient truths, the ‘Global Disinformation Index’ is a key tool of modern propagandists. Media organizations that get a high rating are stooges of authoritarian power. #freeunherd

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… is from page 291 of GMU Econ alum Liya Palagashvili’s superb 2024 paper “Dynamic Pricing Can Benefit Consumers,” which is chapter 24 in The War on Prices: How Popular Misconceptions About Inflation, Prices, and Value Create Bad Policy (Ryan A. Bourne, ed., 2024):

A counterintuitive point here is that sharp price increases associated with high-demand periods provide a signal to improve long-term supply too. Just as surge pricing for rideshares at the end of a baseball game encourages more drivers both now and after future sporting events, the price signal from a bowling alley being full on weekends despite prices being higher may encourage new entrants to the industry or capacity expansions from the provider. This is a crucial point with regard to the “fairness” of high prices, which are often judged on a very static basis.

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In my latest column for AIER, I argue that the all-volunteer nature of the U.S. military ensures that the burden of America’s military provision falls where it belongs – on taxpayers rather than on military personnel. (Well, by not falling on soldiers and sailors this burden falls closer to where it belongs; because today’s citizens-taxpayers use deficit financing to push off onto future citizens-taxpayers much of the cost of providing government outputs and services, some people – tomorrow’s citizens-taxpayers – are indeed unjustly burdened with a large chunk of the cost of providing for the military today. But this is an issue for another time.)

A slice:

By being part of a market economy in which each person specializes in that task for which he or she enjoys a comparative advantage, and then voluntarily exchanges the fruits of his or her efforts for the countless fruits of the efforts of hundreds of millions of other individuals who are also specialized as producers, each of us exchanges burdens with each other. And in the process, we greatly lighten each other’s burdens. It’s less of a burden for me to teach economics and then to exchange some of my income with handymen (and others) to perform tasks for me than it is for me to perform for myself all of the tasks that must be performed for me if I am to enjoy my current standard of living. Ditto for Ernesto. It is easier for him – a lighter burden for him – to perform handyman tasks and then exchange the fruits of his labors for the many things that he buys for his and his family’s consumption.

A person who voluntarily enlists in the military obviously believes that that employment option is the best one for him or her. In exchange for his or her performance of military duties, that soldier or sailor is paid an amount that fully compensates that person’s time and effort spent in the military. The payment received by the soldier or sailor comes from taxpayers, who are the ultimate beneficiaries of whatever services are supplied by the military. In an all-volunteer military, the soldier or sailor no more shoulders the burden of supplying military services than Ernesto the handyman shouldered the burden of hanging my tv on my wall.

This equitable and just reality would be undone if the US government conscripted individuals into its military. All of the many individuals forced into military service against their will would, unlike today’s servicemen and servicewomen, not be fully compensated for the time and effort they would be forced to exert on behalf of taxpayers. Conscription, in short, would enable taxpayers to steal the labor of conscripts – to impose a large portion of the burden of supplying military services on conscripts.

It would clearly be unfair and unjust for me to threaten Ernesto with violence unless he supplies the service of hanging my tv at a low wage that I arbitrarily dictate. My acting in this manner would shift the burden of hanging my tv from me (where it belongs) to him (where it does not belong). For the very same reason, it would be no less unfair and unjust for me and my fellow taxpayers to threaten violence against young men and women if they refuse to supply the service of military protection at low wages that we, through our Congressional representatives, arbitrarily dictate.

Conscription ensures injustice. The all-volunteer military promotes justice.

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Although I detest everything about the NatCon ‘philosophy,’ I’m proud to be among the signers of this letter denouncing the effort to prevent NatCons from speaking in Brussels.

Writing on this illiberal effort to silence the illiberal NatCons is the thankfully liberal Stephanie Slade.

Tom Palmer makes the moral case for globalization. Four slices:

To seriously consider globalization, it’s best to avoid definitions that contain the conclusions of complex arguments. A fruitful discussion of globalization requires a nonmoralized and operational use of the term. The definition is nonmoralized if it does not signal whether we should embrace or reject the term defined and is operational if it identifies uncontested, or at least verifiable, features of the world that people of different moral traditions and ideologies can agree are features of the world. So, this essay’s definition of globalization is the relatively free movement of people, things, money, and ideas across natural or political borders. Thus, increasing globalization means reducing or eliminating state‐​enforced restrictions on voluntary exchanges or interactions across political borders that would be permitted if the private (nonstate) parties were on the same side of a border. A consequence of increasing globalization is an increasingly integrated and complex global system of production and exchange.

Some critics of globalization include in their definition the existence of certain international organizations, such as the World Trade Organization (WTO), the International Monetary Fund, the International Labour Organization, the World Bank, and the World Health Organization. While there are arguments for and against those organizations, none of the organizations are essential to globalization, and some have hindered it. Moreover, none of them are world governments, and none have enforcement powers, armies, etc. They are created by treaties among sovereign states. James Bacchus addresses many myths about the WTO.

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Restricting the liberty of people to travel or exchange information, ideas, goods, or services requires justification. The burden of proof lies with the party that would restrict the liberty of another, just as the burden of proof in a criminal case lies with the one making the charge (the prosecutor). In contrast, the immoralityof arrogating to oneself the power to restrict the choices of others is more evident: it violates the presumption of equal liberty that is foundational to free, harmonious, and prosperous societies by presuming instead that some people be required to ask permission to act from some privileged class. At the very least, such assertions require more justification than is generally offered by advocates of restrictions on trade, travel, or the exchange of goods, services, and ideas.

There is evidence that our commonly accepted norms of morality emerge from trade, which established the importance of legitimate expectations and reputations, both of which are necessary for the emergence of law and morality. Morality itself is a product of exchange, and the more trade, generally the more humane a society is.

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In a deglobalized world in which only privileged people were free to travel and trade those few privileged people would experience tremendous diversity every time they traveled from one country to another. Most people, however, would experience far less diversity. In a world in which people are free to trade and travel, though, most of us experience far more diversity than we would in a world without such freedom. Wealthy visitors to poorer countries often identify the culture of those countries with their poverty and “quaintness.” That is a mistake. Icelanders, to take an example of a small nation with a distinct culture, maintain their language and way of life not by being isolated but by trading with foreigners and using their resulting wealth to sustain publishing houses, film production, education, and much more in their own language. Economist Tyler Cowen described the forms of variety on page 15 of his book Creative Destruction: How Globalization Is Changing the World’s Cultures.

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Cultural exchange is foundational to living cultures. Pasta, for which Italian cuisine is famous, has origins in Asia, whether it was brought to Italy by Marco Polo, as folklore tells, or earlier, and the tomatoes that form the base of many Italian sauces are cultivated from plants brought from Meso‐​America by Spaniards. Food has been globalized for millennia, but somehow that has not stopped it from developing an amazing diversity of identifiable cuisines, styles, and dishes with many distinctive characteristics. The same can be said of architecture, traditions, mores, religions, and every other element of human culture.

Some local customs have dwindled or disappeared. Consider the virtual disappearance of human sacrifice and slavery, both of which had long traditions in many cultures. In that respect, all cultures have become more similar over time—and a good thing too. As a political example, if all the countries of the world were to adopt democracy and to throw off autocracies, tyrannies, colonial masters, and so on, there would be less diversity among systems of government, although a wide variety of forms (Westminster parliamentarism, federalism, presidential systems, constitutional monarchies, etc.) would remain. If genocide, ethnic cleansing, and colonialism were to be eliminated and replaced by some form of live‐​and‐​let‐​live mentality, another kind of diversity would be reduced.

GMU Econ alum Dominic Pino talks with Samuel Gregg about industrial policy.

Jim Bacchus is correct: “The globalization of ideas enriches the world.” A slice:

Facilitated by trade, the invention of critical discussion in Athens led, a century before Plato, to the conception of the new idea that became democracy. As the British classicist Peter Green wrote in The Greco‐​Persian Wars, what the feudalistic Persians despised most about the Greeks, as exemplified by the Athenians, was their “addiction to trade,” and especially, “the free exchange of opinions that went with it.” The same might be said of how trade has, in the 2,500 years since and in so many places throughout the world, promoted more openness to uncounted new ways of thinking and doing and living. In particular, this can be said about the idea of democracy.

Here’s more from the irrepressible Bruce Yandle.

GMU Econ doctoral candidate Giorgio Castiglia understands the unfortunate consequences for workers of minimum wages.

NPR does not like to be criticized…

… but Matt Taibbi is highly critical of new NPR chief Katherine Maher.

Tal Fortgang reports on progressive arrogance and illiberalism at (not shockingly) U.C.-Berkeley. A slice:

In other words, these students know that the ostensible adults in the room aren’t just with them on the issues; they encouraged the zealotry, assertion of moral superiority, and black-and-white thinking that allows students to disrespect anyone — even a dean and eminent scholar — whom they deem morally impure. It’s no wonder that these young activists, feeling no restraint and facing no consequences, behave like spoiled brats.

Who’d a-thunk it? (And here.)

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… is from page 422 of Robert Bork’s masterful 1978 book, The Antitrust Paradox:

Competition in open markets reflects the ideal of equality of opportunity, while antitrust’s longstanding and growing concern for the small and less efficient reflects a preference for equality of outcome. Outcomes are not equal in open competition, hence the pressure for more intervention by law. Nor can equality of outcome be achieved by making the slow faster, that being beyond the powers of legal compulsion, but only by holding the faster back.

DBx: In part because of the influence of Bork’s work, antitrust regulation and jurisprudence from the late 1970s until very recently took a turn for the better. It became much less hostile than it was in earlier years to successful, creative entrepreneurship and competition. Unfortunately, many people high up today in America’s antitrust bureaucracy would return antitrust to being a tool to restrain the creative and punish the successful (and, hence, reduce economic prosperity to the masses).

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Richard Epstein and John Yoo call upon the U.S. Supreme Court to stop Honolulu’s unlawful assault on oil producers. A slice:

Federal courts have limited the Biden administration’s authority to set nationwide standards regulating emissions from power plants. But some cities and states are pushing to meet stringent climate goals by other means. In October, the Hawaii Supreme Court allowed the city and county of Honolulu, along with the local water utility board, to claim that oil and gas companies failed to disclose the risks their products posed to the environment. As a result, the suit alleges, buyers overconsumed oil and gas, which caused excess emissions, which increased global temperatures, which caused sea levels to rise, which then damaged Honolulu.

The energy companies are now asking the U.S. Supreme Court to put a stop to this charade. It should, for several reasons.

Jeff Jacoby warns of the dangerous precedent Biden is setting by defying – and boastfully so – the U.S. Supreme Court. Two slices:

EVER SINCE the Supreme Court ruled last year that President Biden had no authority to unilaterally write off $430 billion in student loans, he and his aides have been crowing that they intended to do it anyway.

Within hours of the court’s decision, Biden truculently told reporters that the court was wrong. He declared he would “stop at nothing to find other ways” to get what he wanted. Soon the administration began generating fresh schemes to cancel student debt — or, more accurately, to transfer that debt to taxpayers. In February, announcing his intention to relieve an additional 153,000 borrowers of the obligation to pay back what they owe, Biden again stressed that he would not comply with the court’s mandate. “The Supreme Court blocked it, but that didn’t stop me,” he boasted on Feb. 21.

Last Monday came another White House move to wipe out student loans — this time absolving some 30 million individuals of their liabilities. Once more there was an explicit assertion of resistance to the court’s decision. “When the Supreme Court struck down the president’s boldest student debt relief plan,” Education Secretary Miguel Cardona proclaimed, “within hours we said: ‘We won’t be deterred.'”

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Either way, Biden’s open snub of the Supreme Court is pushing the rule of lawlessness to a dangerous new level. As he campaigns against Trump in this year’s election, the president keeps warning that America’s democratic values are in jeopardy. He’s right. But as his refusal to abide by an unambiguous decision of the nation’s highest court shows, his opponent isn’t the only candidate jeopardizing them.

Thomas Feddo warns of Biden’s reckless pandering to labor unions and the economically ignorant. A slice:

President Biden weighed in last month on Nippon Steel’s proposed acquisition of U.S. Steel. “It is vital,” he said in a statement, for the latter “to remain an American steel company that is domestically owned and operated.” Soon after, the United Steelworkers endorsed the president. This may be an empty election-year promise. If it isn’t, it’s a pledge to subvert the law and cripple a vital national-security tool in the process.

The only obvious way to stop the acquisition is through the Committee on Foreign Investment in the U.S., or Cfius, a nearly 50-year-old interagency panel that scrutinizes cross-border deals to determine whether they could harm national security. The two steel companies had filed for Cfius review a week before the president’s statement.

Cfius is composed of nine cabinet officials and led by the Treasury secretary. Its work is confidential, rigorous and fact-based, and its statutory remit concerns only national security. Congress mandates Cfius conduct its analysis in secret and precludes the president from dictating its decisions. Mr. Biden’s statement didn’t mention Cfius or national security, but it’s reasonable to suspect he hoped to influence the committee.

But an adverse ruling from Cfius would clearly be improper.

Speaking of Biden, these letters in today’s Wall Street Journal are spot-on. Here’s one:

Why are student loans more deserving of forgiveness than any other kind of debt? (“Biden’s Latest Lawless Debt Forgiveness,” Review & Outlook, April 9). President Biden hasn’t proposed paying off everybody’s mortgage or car loan—yet. If, after canceling student loans, he wants to buy still more votes with other people’s money, that will be an option. Don’t think he wouldn’t consider it.

Keith E. Smith
Silver Spring, Md.

Here’s my intrepid Mercatus Center colleague, Veronique de Rugy, on inflation.

The Fund for American Studies president Roger Ream reflects on NPR reporter Uri Berliner’s recent revelation of the extreme bias at NPR. A slice:

What’s troubling today is the new ideology that’s taken over newsrooms during the Trump years. Journalism is now focused more on political correctness and political point scoring than on traditional journalistic ethics like fairness, independence and truth-seeking. It enforces a rigid orthodoxy that promotes specific viewpoints while shutting out other voices that don’t stick to the approved narrative. In short, the news today tells its readers, viewers and listeners what to think.

James Pethokoukis unfailingly writes wisely about innovation.

Katarina Hall reports that “Argentine President Javier Milei and Tesla CEO Elon Musk met for the first time in Austin, Texas, where they ‘agreed on the need for free markets.'” A slice:

During their meeting the two “agreed on the need for free markets and defend the ideas of freedom,” the Argentine government said in a statement. “The President and the businessman spoke in Texas about the importance of eliminating bureaucratic obstacles that keep investors away,” it added.

Kimberlee Josephson explains how today’s business schools often undermine wealth creation.

GMU Econ alum Jayme Lemke reviews Jessamine Chan’s dystopian 2022 novel, The School for Good Mothers.

It pays to have friends in high places. (HT Todd Zywicki)

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… is from page 128 of David Schmidtz’s excellent 2023 book, Living Together (footnote deleted):

Robert Frank once reported being baffled that I would reject modest redistribution from rich to poor. Amartya Sen intervened at that moment and told Bob he needed to listen. Affluent scholars see a pie and see how they want to slice it, but Sen saw me starting in a different place – with the truism that power corrupts. Starting from that truism, what is baffling is that anyone could so cavalierly endorse concentrated power when we live in a world where concentrated power is so often used to redistribute not from rich to poor but from poor to rich. Sen went on to say that when it comes to inequality, the question is not whether we can find a statistic that gives credence to the resentment the richest scholars feel as the richest movie stars leave them behind, but which dimensions of rising inequality do poor people care about?

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Arnold Kling is understandably unimpressed with economists’ understanding of business. A slice:

Economists treat “the firm” as if it were a single, cohesive unit. In 2016, Bengt Holmstrom and Oliver Hart won a Nobel Prize for undertaking analysis of just one internal conflict—that between a manager wanting performance and a worker preferring to shirk. But in the real world, a business is a cauldron of conflicts.

John O. McGinnis reviews Ingrid Robeyns’s “case against extreme wealth.” Two slices:

Politically, she contends that the state should limit individuals to a net worth of 10 million dollars. Ethically, she claims that moral individuals should possess no more than a million dollars’ worth of assets.

Her arguments are not at all convincing, but they are clarifying. While the left’s interest in progressive taxation can be reconciled with a market society, even if it reduces economic growth, proscribing wealth would lead to a society with little or no growth. While the left’s interest in creating more equality of opportunity can be reconciled with liberalism’s priority on human autonomy, Robeyns’ contentions are deeply illiberal and depend on her own unimaginative prescriptions for human flourishing. Unfortunately, given the prevalence of the swing against the rich, friends of liberty will hear more such arguments and need to be prepared to refute them.

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Robeyns appears to think “intrinsic motivations” rather than external rewards will be enough to keep the economy humming but she provides no evidence for this. Intrinsic motivation has not permitted even small-scale socialist experiments to endure. Even the higher tax rates in Europe that are far lower than what would be necessary to eliminate the rich—depress the levels of work and innovation there compared to the United States.

Wall Street Journal columnist Mary Anastasia O’Grady writes insightfully about Brazil and Elon Musk. Two slices:

In modern liberal democracy, free speech acts as a check on absolute power. The executive has the bully pulpit, but the public’s access to contrarian points of view contributes to the vibrancy of political debate. Brazil’s constitution protects civil liberties, and free expression has been a Brazilian value since the country returned to democracy in 1985.

That is, until Lula and his Workers’ Party got caught with their hands in the cookie jar and Lula went to jail in 2017. The largest graft and bribery scandal in Western Hemisphere history exposed the criminality of the political class and its business-community friends. In 2018 Brazilians elected President Jair Bolsonaro, an outsider who promised to clean house.

Mr. Bolsonaro is a former army captain with a lowbrow style who can be crude. But that alone doesn’t explain why a good part of the country has come down with Bolsonaro Derangement Syndrome. Lula can also be vulgar.

Mr. Bolsonaro’s main transgression was his pledge to protect private property, restore law and order, and challenge identity politics. He was supported by social conservatives, libertarians, the working and middle classes, entrepreneurs and farmers, all of whom were tired of democratic socialism. Many were willing to overlook Mr. Bolsonaro’s flaws in exchange for getting rid of the Workers’ Party. The legacy media calls them “the far right.”

As president Mr. Bolsonaro was far from a champion of free markets and his language was often reckless. But his administration restored fiscal sanity, deregulated parts of the economy, and made doing business less onerous through digitization

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Brazil’s Congress has failed to pass legislation that empowers the court to ban what it subjectively brands “fake news.” But the court continues to demand that platforms block speech. On April 6 Mr. Musk rebelled, tweeting that while Twitter has “informed” accounts that it was told to block, it doesn’t “know the reasons these blocking orders have been issued.” Nor does it “know which posts are alleged to violate the law” and it’s “prohibited from saying which court or judge issued the order, or on what grounds.” Twitter is “threatened with daily fines if we fail to comply,” he said. Last week he lifted the block on some users. He also threatened to release his communication with the court, an accounting Brazilians deserve to see.

Professor Michael Way’s letter in today’s Wall Street Journal points to a real problem:

Nothing makes clearer to me the degree to which government influences and meddles with business than to learn that Intel has a “chief government affairs officer” (Letters, April 10). True capitalism may not be dead yet in the U.S., but it is on life support.

Prof. Michael H. Way
California State University, Bakersfield

Pierre Lemieux ponders incentives.

John Cochrane speaks to APEE. Two slices:

Economics is about incentives. We don’t have much to say really about transfers. Our expertise, our claim to truth that applies to everyone, is the analysis of incentives.

Politics is all about transfers. Government grabs resources from A and gives them to B, or distorts markets to benefit B. Look at any discussion of taxes. The newspapers are full of who gains or loses $100, but practically silent on incentives to work, save, invest. In many ways, managing transfers by force is the point of government.

This is all good news. In a discussion that is essentially about transfers, we can pop in, say “excuse me,” and have something genuinely different to say, rather than just jump in on the partisan scales of who gets what.

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Another weakness is that we are boring. Many politicians want a New Big Idea as a core of their propaganda racket with a new name. Make America Great Again. Bidenomics. National Conservativism. Anti-Racism. To this cage fight we bring, “Remove the Regulatory Roadblocks in Real Estate Permitting. “New” on the package is the first lesson of marketing. “Stimulus,” write everyone a check, makes great politics. But our national life is a hoarder’s nightmare. We need a patient Marie Kondo cleanup, not stimulus. First the sock drawer, then the kitchen cabinets, and maybe next month we can look inside the garage.

We should stay boring. We should not bend to the desire for power and influence, to serve as the ideological fountain for people who strive for power. That is not the way our ideas will advance. They will find us when the time is right, as Reagan found Friedman.

Our ideas also seem old, and politics demands the fresh and new. But our ideas are better because many are old and well tested. Just because force = mass times acceleration is an idea from the 1670s doesn’t make it any less applicable today. Just because Adam Smith and David Ricardo showed tariffs were dumb centuries ago doesn’t make tariffs any smarter today. Old well-tested ideas make a lot better policy. One of my greatest annoyances is economists who fly to Washington with a clever new idea for Washington to spend a few trillions of dollars; the same Washington that can’t get a the existence of a supply curve, a budget constraint, or trade balance identity (trade deficit = capital inflow) straight. Policy should get the simple tried and true right, as boring as that might be for whiz economists.

el gato malo tweets: (HT Jay Bhattacharya)

i remember in feb and march of 2020 being astonished by this lockdown idea and loudly yowling “do you have any idea what shutting down the world for 2 weeks would do to global supply chains and economic function?”

it did not even occur to me that anyone would be crazy enough to try it for months or years at the expense of small business, social fabric, and education.

it was simply such an insane idea that my mind could not compass the notion that someone would try it or that anyone would go along with it if they did.

i think a number of us suffered from a similar failure of imagination. there was a pervasive sense among us that there was just no way that the “people in charge” could be this stupid, barking mad, and hopelessly corrupt and self-absorbed or that society could be so easily panicked into a stampede of self-enforcing submission to collective delusions.

it turns out that the intersection of milgram and ash is a very dangerous place for society.

it turns out that propaganda works.

and it turns out that “the experts” are anything but.

the question that remains is “did we generate the societal antibodies to resist the next one?”

a significant part of that is resisting this historical re-write of “mistakes were made, but no one could have known.”

they could. they did. and they will again.

but alone, that does not amount to much.

you get run over.

it’s who society stands behind that decides whether or not “people knowing better” matters.

choose well.

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… is from page 205 of the original edition of Walter Lippmann’s sometimes deeply flawed but profoundly insightful and important 1937 book, The Good Society:

And so I insist that collectivism, which replaces the free market by coercive centralized authority, is reactionary in the exact sense of the word. Collectivism not only renders impossible the progressive division of labor, but requires, wherever it is attempted, a regression to a more primitive mode of production.

DBx: Yes.

Show me an advocate of full-on socialism and I’ll show you someone whose preferred policies, if implemented, would destroy modern civilization. Show me an advocate of partial socialism – for example, an advocate of industrial policy – and I’ll show you someone whose preferred policies, if implemented, would inflict great damage on modern civilization, with the amount of damage being a positive function of the extent to which the industrial policy displaces market-directed allocations of resources.