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Or Maybe He's One of Them There 'Cosmopolitan Globalists' - Cafe Hayek
TweetHere’s a letter to the Wall Street Journal. Editor: Ben Cohen reports that CEO Ryan Petersen, whose specialty is logistics, warns that Trump’s tariffs will inflict enormous damage on America’s small businesses (“The CEO Who Says an Asteroid Is Coming to Destroy America’s Businesses,” May 3). Mr. Petersen – an honest-to-goodness businessman with on-the-ground experience […]
Some Links - Cafe Hayek
TweetScott Winship and Bryan Riley masterfully unpack several of the tendentious errors that infect Treasury secretary Scott Bessent’s recent attempt, in the Wall Street Journal, to defend that which is indefensible – namely, Trump’s trade ‘policy.’ Four slices: In a Wall Street Journal op-ed Monday, Treasury Secretary Scott Bessent claimed that “3.7 million Americans lost their […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 1 of volume 1 (“Rules and Order,” 1973) of F.A. Hayek’s brilliant trilogy, Law, Legislation, and Liberty (footnote deleted): When Montesquieu and the framers of the American Constitution articulated the conception of a limiting constitution that had grown up in England, they set a pattern which liberal constitutionalism has followed ever […]
Some Links - Cafe Hayek
TweetThe Editors of National Review wisely warn Trump that, by making Americans poorer, his protectionist ‘policies’ might well prove to be as politically damaging to the GOP as these ‘policies’ are to the American economy. A slice: Yet bizarrely, the man who for decades has been a symbol of unapologetic American excess is now defending […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 42 of the original edition of the Harvard economist Frank Taussig’s 1915 volume, Some Aspects of the Tariff Question: In creating and maintaining the comparative advantage which comes from the better application of the machine processes, the business man – the industrial leader – has become in recent times a more […]
On Joe Nocera's Mistaken Take on Trade and Economics - Cafe Hayek
TweetHere’s a letter to The Free Press Editor: Joe Nocera’s paean to “the intellectual godfathers of protectionism” is filled with so much misunderstanding that it’s difficult to know where to begin to correct his errors (May 6). Start with this claim: “Though most economists were at least dimly aware that globalization was causing factories to […]
Some Links - Cafe Hayek
TweetThe Editorial Board of the Wall Street Journal reports on “a tariff lesson at the Nucor steel mill.” Here’s the Board’s conclusion: This is how it goes with tariffs: Many industries want protection. Nobody wants to be hurt by the other guy’s protection. And then everyone hopes consumers won’t notice. Russ Roberts talks about tariffs […]
Ten Minus Two Never Equals Anything Other Than Eight - Cafe Hayek
TweetHere’s another letter to a relatively new, and quite insistent, correspondent. Mr. C__: There must be something in the air. Over the past few days I’ve encountered several people who insist, as you do in your note of this morning, that those of us who oppose Trump’s protectionism are guilty, in your words, “of only […]
GDP≡C+I+G+X-M Does... - Cafe Hayek
Tweet… not mean that an increase in imports reduces GDP. In the print edition of tomorrow’s (Wednesday’s) Wall Street Journal, Phil Gramm and I do our best to bust the myth that the “-M” part of the GDP equation means that imports reduce GDP. A slice: The BEA collects data on total consumption, investment and […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 335 of the “Random Thoughts” section of Thomas Sowell’s 2010 book, Dismantling America: Despite people who talk glibly about “earlier and simpler times,” all that makes earlier times seem simpler is our ignorance of their complexities. DBx: Yes. A similar error is made by people who talk glibly about “America’s golden […]
Some Links - Cafe Hayek
TweetPierre Lemieux again explains the economic error of leaping to the conclusion that imports reduce GDP from the fact that imports, in national-income accounting, are subtracted from gross domestic product. In a new paper, Aaron B. Flaaen, Fariha Kamal, Eunhee Lee, and Kei-Mu Yi explore “An anatomy of U.S. establishments’ trade linkages in global value […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 41 of Milton & Rose Friedman’s great 1980 book, Free To Choose: “Protection” really means exploiting the consumer. A “favorable balance of trade” really means exporting more than we import, sending abroad goods of greater total value than the goods we get from abroad. In your private household, you would surely […]
FedEx Began With Imported Aircraft - Cafe Hayek
TweetIn the Smithsonian’s National Air and Space Museum Steven F. Udvar-Hazy Center – a wonderful museum in northern Virginia near Dulles Airport – there is displayed one of the first aircraft used by FedEx. It’s pictured here, along with the plaque that accompanies it. This aircraft and more than 30 others of the same kind […]
Some Links - Cafe Hayek
TweetOn April 29th, the office of the U.S. Trade Representative boasted, in a tweet, of its efforts to use protectionist measures to shield Americans from the depredations of various explicitly mentioned foreign countries – countries that allegedly are ripping us Americans off. Scott Lincicome then shared Grok’s comparison of U.S. per-capita GDP to the per-capita […]
The Language is All Wet - Cafe Hayek
TweetHere’s a letter to the Wall Street Journal. Editor: Your headline writers describe the consequence of Americans purchasing foreign-made goods before Trump’s punitive taxes on these purchases kicks in as “a flood of imports” (“Before the Tariffs: A Flood of Imports,” May 1). Please use different language. Floods occur because humans lose control of their […]
Quotation of the Day... - Cafe Hayek
Tweet… is this comment on Facebook by Richard Fulmer: The Soviet Union sold its Marxist-Leninist policies to Russian citizens by claiming that they would unleash a flood of material wealth – leaving the western world far behind. When it became painfully obvious that socialism could not fulfill that promise, socialists changed the story. Austerity became […]
The High Costs of Trump's Punitive Taxes on American Buyers of Imports and Import-competing Products - Cafe Hayek
TweetHere’s a letter to a new correspondent: Mr. C__: Thanks for your e-mail. You ask why I “focus on tariffs without praising President Trump for the DOGE budget savings.” Two reasons: First, while I applaud efforts to cut the U.S. government down to size, I worry that Trump’s attempt to do so through unilateral executive […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 319 of Thomas Sowell’s 2002 collection, Controversial Essays: One of the most fashionable notions of our times is that social problems like poverty and oppression breed wars. Most wars, however are started by well-fed people with time on their hands to dream up half-baked ideologies or grandiose ambitions, and to nurse […]
Some Links - Cafe Hayek
TweetThe Acton Institute’s John Pinheiro has this very good letter in today’s Wall Street Journal: In response to warnings about empty store shelves (“Tariffs Shrink the Economy,” Review & Outlook, May 1), President Trump said: “Maybe children will have two dolls instead of 30 dolls, you know, and maybe the two dolls will cost a […]
Some Links - Cafe Hayek
TweetMy intrepid Mercatus Center colleague, Veronique de Rugy, decries the mix of ignorance and arrogance that is at the root of Trump’s trade ‘policy.’ Three slices: The first degrowth president of the United States, President Trump, recently defended his tariffs with this gem: “They have ships that are loaded with stuff we do not need” […]
Quotation of the Day... - Cafe Hayek
Tweet… is from this August 17th, 1970, Newsweek column by Milton Friedman: Japan does impose numerous restrictions on trade …. Those trade restrictions hurt Japan and they hurt us—by denying them and us mutually profitable trade. In Japan no less than in the U.S., concentrated producers exert a greater influence on government than widely diffused […]
On the So-called "Twin Deficits" - Cafe Hayek
TweetIn my latest column for AIER, I do my best to clear up some of the many confusions that infect discussions of the relationship between the U.S. government’s fiscal incontinence and U.S “trade deficits.” A slice: Third, foreigners today own only about 23 percent of U.S. government debt. The bulk of this debt, in other […]
The Economy Is Being Distorted by Trump's Tariffs and Not By Efforts to Minimize the Tariffs' Effects - Cafe Hayek
TweetHere’s a letter to the Wall Street Journal. Editor: Alistair MacDonald reports that “the rush to beat tariffs is distorting the economy” (April 30). Not so. The tariffs are distorting the economy. By stocking-up on imports before their prices skyrocket, Americans are creating a pre-tariff surge in imports that lessens the distortions unleashed by the […]
Some Links - Cafe Hayek
TweetEric Boehm reports on Tariff Man’s admission (however inadvertent or unaware) that his tariffs punitive taxes on Americans who buy imports and import-competing products will raise the prices ordinary Americans pay for their cost of living and make the resulting standard of living worse. Two slices: When President Donald Trump ordered the implementation of his […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 57 of Anne Krueger’s 2020 book, International Trade: What Everyone Needs to Know: It is no accident that most rich countries have more open trading policies than poorer ones: the static and dynamic benefits have significantly contributed to their high levels of productivity. Share Tweet Share Email Print
Awfully Nice of Him - Cafe Hayek
TweetHere’s a letter to the Wall Street Journal. Editor: Reporting on President Trump ‘softening’ the impact of his automotive tariffs, you quote him saying that “it’s a little bit of help. We just wanted to help them enjoy this little transition, short-term” (“Trump Softens Blow of Automotive Tariffs,” April 30). Lovely. We should all be […]
Some Links - Cafe Hayek
TweetAll this winning from tariffs: “The US stock market just recorded its worst first 100 days of any presidential term since President Gerald Ford assumed office in 1974.” The Editorial Board of the Wall Street Journal is rightly disappointed that Amazon won’t itemize on its sales site the costs of Trump’s tariffs punitive taxes on […]
Twisted Illogic - Cafe Hayek
TweetHere’s a letter to The Hill. Editor: Pres. Trump said that “China probably will eat those tariffs” (“Trump says China ‘probably will eat those tariffs’,” April 29). So the president believes that the tariffs will be ‘eaten’ by China – meaning, he believes the tariffs won’t result in higher prices in America of Chinese goods. […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 73 of Art Carden’s and GMU Econ alum Caleb Fuller’s superb new book, Mere Economics (footnote deleted; link added; original emphasis): Clearly, protectionism is alluring. Make foreign steel more expensive, and more Americans make steel. Simple. But that’s what economist Thomas Sowell calls “Stage One Thinking.” When we ask, Then what […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 6 of Diane Coyle’s 2014 book, GDP: It [GDP] is a measure designed for the twentieth-century economy of physical mass production, not for the modern economy of rapid innovation and intangible, increasingly digital services. How well the economy is doing is always going to be an important part of everyday politics, […]
The U.S. Should Avoid Tariffs AND Subsidies - Cafe Hayek
TweetHere’s a letter that I sent ten days ago to the New York Times, but which was never published there. Editor: Although rightly decrying tariffs, as well as suggesting some worthwhile policy changes, Sam Hammond’s case for industrial policy fails (“Tariffs Won’t Fix Our Trade Imbalance. This Will.” April 18). That case rests on a […]
What's Trump Afraid Of? - Cafe Hayek
TweetHere’s a letter to the Wall Street Journal. Editor: The White House is outraged that Amazon even considered, as you report, “displaying the impact of tariffs during its online checkout process” (“Amazon Rules Out Displaying Tariff Impact After White House Attack,” April 29). How surprising. President Trump’s base insists that he’s singularly forthright and fearless. […]
Some Links - Cafe Hayek
TweetThe Editorial Board of the Wall Street Journal writes – using understatement – that Trump’s calamitous tariffs crushing taxes on Americans who buy imports and import-competing products “could sink his second term.” A slice: That’s especially true on tariffs, which could sink his Presidency. Mr. Trump was elected to control inflation and raise real incomes, […]
Scott Winship on the "China Shock" - Cafe Hayek
TweetAmong the most careful, thorough, and insightful – and significant – economic analysts at work today is the American Enterprise Institute’s Scott Winship. In this new post, which is long but well worth a complete and careful read, Scott summarizes the “China Shock” research as well as all of the significant pieces of research inspired […]
Some Links - Cafe Hayek
TweetArnold Kling discusses “some trade myths that refuse to die.” Two slices: But counting workers is the wrong metric. America is outstanding at food production. But in terms of employment, our agriculture industry is even more “devastated” than manufacturing. The majority of Americans 250 years ago were in farming. Now it is only about 2 […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 78 of Art Carden’s and GMU Econ alum Caleb Fuller’s excellent new book, Mere Economics (footnote deleted, link added): If protectionist logic is sound, [Henry] George reasoned that humans have been prosecuting wars most stupidly for millennia. After all, protectionist believe that by restricting the flow of imports into their country, […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 128 of Thomas Sowell’s 2023 book, Social Justice Fallacies: But we cannot just keep surrendering more and more of our freedoms to politicians, bureaucrats and judges – who are what elected governments basically consist of – in exchange for plausible-sounding rhetoric that we do not bother to subject to the test […]
Some Links - Cafe Hayek
TweetMy GMU Econ colleague Bryan Caplan writes insightfully about trade. A slice: Suppose the U.S. Constitution mandated unilateral free trade with no exceptions. Much could go wrong. A pessimist could fairly ask all of the following: What if other countries take advantage of our unilateralism to drastically raise their tariffs? What if other countries strategically predate on […]