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Quotation of the Day... - Cafe Hayek
Tweet… is from David Stockman’s March 28th, 2025, essay at Doug Casey’s International Man, “David Stockman on the Fallacy of Reciprocal Tariffs“: It should be obvious by now that the Donald’s north star is “winning” and nothing else, and that he keeps score by whatever metric is handy. On trade, the scorecard is simply the […]
Some Links - Cafe Hayek
TweetMy intrepid Mercatus Center colleague, Veronique de Rugy, teams up with Jack Salmon to expose some of the countless fallacies that infect the case for Trump’s idiotic protectionism. Three slices: 70 days into the new Administration, the stock market is down about 10% since the trade war kicked off. Real GDP is forecast to come […]
Trump's Attempted Justifications for His... - Cafe Hayek
Tweet… utterly unjustifiable tariffs get more detached from reality by the day, as revealed in this new post at Truth Social (shared on Facebook by Phil Magness). Trump asserts that his tariffs will fall on illegal drugs – the same illegal trusts that, although smuggled into the U.S., will somehow mysteriously be kept out of […]
Who You Gonna Believe? People With Skin In the Game or People Without Skin In the Game? - Cafe Hayek
TweetA letter to National Review. Editor, The Corner National Review Editor: Michael Brendan Dougherty expresses his agreement with Oren Cass’s support (in Cass’s words) “of President Trump’s desire to reshape the global trading system” – a reshaping that’s allegedly necessary to ‘liberate’ the U.S. economy from forces that are undermining its long-run vitality (“Expecting Liberation […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 437 of Phil Magness’s new paper “Old Lessons for the New Protectionists,” which is a chapter in the collection Free Trade in the Twenty-First Century (edited by Max Rangeley & Daniel Hannan, 2025): Tariffs are a product of a political world inhabited by vested interests and pressure groups that cannot be […]
Some Links - Cafe Hayek
TweetThe Wall Street Journal reports on the shabby treatment given by Trump’s protectionism to Mercedes-Benz and some other foreign – “foreign” – automakers. A slice: Roughly two-thirds of the 324,500 vehicles Mercedes shipped to dealers in the U.S. last year were imported, and even the popular GLE and GLS SUVs it assembled in Tuscaloosa, Ala., […]
Bonus Quotation of the Day... - Cafe Hayek
Tweet… is this recent post at Facebook by Phil Magness: For economists, the tariff spectacle currently coming out of the White House econ team is akin to watching NASA being taken over by astrologers and repurposing the International Space Station to charge magic healing crystals with moonbeams. Share Tweet Share Email Print
Some Links - Cafe Hayek
TweetRobert Pozen explains that Trump’s tariffs will repel foreign portfolio investment in the United States and thus – among other harms – raise real interest rates. Two slices: The Trump administration says this week it will impose reciprocal tariffs on countries that have regularly run substantial trade surpluses with the U.S. But these surpluses have […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 129 of my late, great colleague Walter Williams’s 1982 book America: A Minority Viewpoint: In fact, the first thing a dictator wants to do when he comes to power is eliminate the market. Why? Because he can’t trust people to behave voluntarily the way he thinks they should behave. DBx: Indeed. […]
On What Motivates Trump's Protectionism - Cafe Hayek
TweetHere’s a letter to a student who, admirably, wants “to give our president the benefit of the doubt.” Ms. L__: Thanks for your e-mail. You’re correct that “even Adam Smith saw tariffs possibly helping people here by pressuring other countries into cutting tariffs.” You then wonder if “those opposing the president on tariffs are being […]
Trumpian Trade Incoherence - Cafe Hayek
TweetHere’s another letter to the Wall Street Journal. Editor: In the span a less than two days, the Trump administration revealed yet again its trade policy’s incoherence. On Saturday, Mr. Trump said “I couldn’t care less [if the prices of foreign cars rise due to tariffs], because if the prices on foreign cars go up, […]
The Conventional Wisdom on Deflation is Dubious - Cafe Hayek
TweetHere’s a letter to the Wall Street Journal. Editor: Your reporter Matt Grossman repeats the conventional wisdom that “deflation is bad news when it spans the whole economy” (“The Era of Cheap Stuff Was Already Ending. Now Comes the Tariff Threat.” March 30). This conventional wisdom is dubious, both theoretically and empirically. Deflation – that […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 614 of Deirdre McCloskey’s new paper “Globalization, Long May It Reign,” which is a chapter in the collection Free Trade in the Twenty-First Century (edited by Max Rangeley & Daniel Hannan, 2025): The ethical case for globalization is not simply that it enriches us all, though it does. It’s also that […]
Some Links - Cafe Hayek
TweetScott Lincicome and Tad DeHaven explain what shouldn’t – but, alas, what these days nevertheless does – need to be explained: “Trump’s automotive tariffs will hurt American consumers and producers.” Five slices: President Donald Trump’s decision this week to implement a “permanent” 25 percent tariff on imported automobiles and automotive parts represents one of his […]
Trump Is Reducing U.S. Trade Deficits - Cafe Hayek
TweetHere’s a letter to the Wall Street Journal. Editor: You report that Pres. Trump’s hike in taxes on Americans’ purchases of imports – which taxes, by the way, haven’t been this high since 1948 – is inflicting such damage on the U.S. economy that foreign investors are souring on it (“How the Reversal of the […]
Some Links - Cafe Hayek
TweetGMU Econ alum Dominic Pino – who, I boast, was a student in my Spring 2020 seminar on The Wealth of Nations – wrote the cover story for the latest edition of National Review; it’s titled “Free Trade Is How You Live Your Life.” Two slices: Every free trader has heard it: Sure, we’d all […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 30 of H. Geoffrey Brennan’s and James M. Buchanan’s 1981 monograph, Monopoly in Money and Inflation: The Case for a Constitution to Discipline Government: Money performs a function of real value. It is not merely a veil. Persons will voluntarily exchange real goods and services for money units, even if they […]
Some Links - Cafe Hayek
TweetReason‘s Eric Boehm explains what should not – but, alas, what today nevertheless does – require explanation: Not only are Trump’s tariffs taxes on Americans, these taxes are economically destructive. Three slices: If there’s one positive thing to be said about President Donald Trump’s latest tariff announcement, perhaps it is this: Few trade policy moves […]
Trump Is Poisoning the Very Heart of the Market Order - Cafe Hayek
TweetHere’s a letter to Business Standard. Editor: You report that “in a high-stakes call with top US automakers earlier this month, US President Donald Trump issued a warning: Do not raise car prices in response to his new tariffs” (“Trump warns auto industry: No car price hikes after tariff shake-up,” March 27). This warning, like […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 68 of Art Carden’s and GMU Econ alum Caleb Fuller’s forthcoming (in April 2025) book, Mere Economics (footnotes deleted; links added): Trade skeptics overlook the dispersed benefits. Some find virtue in paying more for “fair trade” coffee, goods “made in America,” and local produce, but as twentieth-century economic journalist Henry Hazlitt […]
So-Called "U.S. Trade Deficits" Are Microeconomic Phenomena - Cafe Hayek
TweetHere’s a letter to the Washington Post: Editor: Reporting on Pres. Trump’s effort to use tariffs to reduce America’s trade deficits, you quote former U.S. trade negotiator Wendy Cutler saying that “a lot of factors contribute to trade deficits. Most are macroeconomic” (“Trump barrels forward with tariffs for ‘Dirty 15’ trading partners,” March 26). Ms. […]
Trade Deficits and Budget Deficits - Cafe Hayek
TweetAfter reading my most-recent letter sent to the Washington Post, Phil Gramm called me and left a voicemail message. (When he called I was in class.) He told me, correctly, that in my letter I failed to “put the final nail in the coffin” of the case that so-called “U.S. trade deficits” are phenomena that […]
Ripping Us Off? - Cafe Hayek
TweetEarlier today, long-time Cafe Hayek patron Regan Taylor sent the following note to me. I share it with his kind permission. Trump often says that other countries are ripping us off when we trade with them. But other countries are perfectly willing to sell to me at a price I find agreeable. I have no […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 603 of Deirdre McCloskey’s new paper “Globalization, Long May It Reign,” which is a chapter in the collection Free Trade in the Twenty-First Century (edited by Max Rangeley and Daniel Hannan, 2025): Contrary to what you might have heard, however, there’s no “Chinese model” to be seen as an intriguing if […]
Some Links - Cafe Hayek
TweetMy intrepid Mercatus Center colleague, Veronique de Rugy, writes realistically about the state of the American economy. Three slices: For one thing, for all the talk of job losses and economic decline, it’s worth remembering that the unemployment rate is a very low 4.1%, and real wages (those adjusted for inflation) have been growing. If […]
Some Links - Cafe Hayek
TweetThe Wall Street Journal‘s Editorial Board reports that “Europe arms for the tariff war.” A slice: The danger is that a trade war unleashes Europe’s worst instincts. It’s not an accident that France seems to be the ringleader agitating for tougher retaliation—especially measures such as the intellectual-property provisions that would put brute force behind Paris’s […]
Quotation of the Day... - Cafe Hayek
Tweet… is from pages 241-242 of the American jurist James Coolidge Carter’s profound, yet unfortunately neglected, (posthumous) 1907 book, Law: Its Origin, Growth and Function: All crimes are violations of custom, but all violations of custom are not necessarily crimes. There are many departures from custom of which the law takes no notice, or should […]
Let's NOT Bring Back Furniture Manufacturing - Cafe Hayek
TweetHere’s a note to a long-time correspondent: D__: Thanks for your e-mail and sharing the recent report that President Trump wants to bring furniture manufacturing back to the U.S. (“Trump says new tariffs will bring furniture making back to the US; experts are skeptical”). In your view, success on this front “would indicate his tariffs […]
Quotation of the Day... - Cafe Hayek
Tweet… is from pages 52-53 of Eamonn Butler’s new paper “The Psychology of Protectionism,” which is a chapter in the collection Free Trade in the Twenty-First Century (edited by Max Rangeley and Daniel Hannan, 2025): Moreover, the imposition of protectionist controls in peacetime can also increase the possibility of war. Protectionist measures may be seen […]
More on Imports, Exports, and Ends and Means - Cafe Hayek
TweetI here try once more to explain why I disagree – uneasily, to be sure – with my dear friend David Henderson on the question of the relationship between imports and exports. (My previous post in this vein was convoluted although, I think, correct.) The passage that sparked this intellectual disagreement is this one, written […]
Some Links - Cafe Hayek
TweetJohn Phelan highlights the misunderstanding of the balance of trade that runs throughout the new book by Heritage Foundation president Kevin Roberts. A slice: China’s government might well be running a trade surplus as a matter of policy. It may even be doing so with the aim of strengthening itself relative to geopolitical rivals like […]
An Open Letter to All Reporters, Editors, Columnists, Substackers, and Bloggers - Cafe Hayek
TweetMedia Folk: You of all people should recognize the power of language. Words not only have dictionary definitions, they often convey emotions and carry meaning beyond their formal definitions. So this humble economist has a modest plea: Please stop referring to trade deficits and trade surpluses as “unbalanced trade.” I was prompted to issue this […]
Some Links - Cafe Hayek
TweetMegan McArdle is correct: “Abandoning DEI won’t fix academia’s left-leaning problem.” A slice: But conservatives who are giddy about such victories should note that this is a very limited win. After all the diversity offices are renamed and the diversity statements withdrawn, academia will remain near-monolithically left. This is a problem for conservatives on campus […]
The Free Market: "'Puffery' in Advertising" - Cafe Hayek
TweetIn my effort to collect here at Cafe Hayek as many as possible of my past writings, I now share, beneath the fold, a little piece that I wrote in 1995 titled “‘Puffery’ in Advertising.” “Puffery” in Advertising Donald J. Boudreaux The Free Market 13, no. 9 (September 1995) Want to please a lawyer? Find […]
Disagreeing With David Henderson - Cafe Hayek
TweetOn those very rare occasions when I disagree with David Henderson, I feel uneasy and worry – sincerely – about my skills as an economist. But at the risk of exposing myself as a poor economist, I here express a disagreement with David. A few days ago I shared here at Cafe Hayek this quotation […]
Bonus Quotation of the Day... - Cafe Hayek
Tweet… is from this recent post by Arnold Kling at his Substack, In My Tribe: I am inclined to believe that overly optimistic assumptions about human nature are baked in to any political philosophy that advocates the use of government to solve many social problems. Share Tweet Share Email Print
Some Links - Cafe Hayek
TweetGMU Econ alum Patrick Newman’s letter in yesterday’s Wall Street Journal is excellent: “Laws, like sausages, cease to inspire respect in proportion as we know how they are made.” John Godfrey Saxe’s quip certainly applies to the Meat Inspection Act of 1906, legislation meant to clean up Chicago’s meat-packing industry (“‘The Jungle’ Is a Cautionary […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 172 of F.A. Hayek’s 1950 essay “Economics,” written for Chambers’s Encyclopaedia, as this essay is reprinted as chapter 11 in Essays on Liberalism and the Economy (2022), which is volume 18 (expertly edited by the late Paul Lewis), of The Collected Works of F.A. Hayek (footnote deleted): There is ground for […]
Some Links - Cafe Hayek
TweetHere’s my GMU Econ colleague Larry White at his Facebook page yesterday (brackets original to Larry]): Trump’s CEA head Stephen Miran: Tariffs won’t raise prices if the Fed simultaneously tightens money to strengthen the dollar. Trump to Fed: Tariffs won’t reduce output if you simultaneously loosen money [which implies a weaker dollar]. Problem: The Fed […]
Quotation of the Day... - Cafe Hayek
Tweet… is from page 613 of Deirdre McCloskey’s new paper “Globalization, Long May It Reign,” which is a chapter in the collection Free Trade in the Twenty-First Century (edited by Max Rangeley and Daniel Hannan, 2025): Yet left and right and middle cry, “Bring back manufacturing to the U.S., and establish self-sufficiency in the making […]