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Have Europeans Been Ripping Americans Off in Trade?

Here’s a letter to the Wall Street Journal.

Editor:

President Trump should read your report on World Cup fans visiting from Europe being gob-smacked by America’s enormous wealth (“European Soccer Fans Marvel at the Splendor of America’s Suburbs,” June 27). How, for example, could the president continue to believe that Europeans have been “ripping us off in trade” when these visitors – most of whom are wealthy by European standards (otherwise they couldn’t afford to visit America) – continually express astonishment at ordinary Americans’ prosperity? How could he persist in thinking that American trade with Europe has been for us a ‘losing’ proposition when he encounters passages such as this one in your report?

The average American home is about 1,800 square feet, with new single-family homes measuring well over 2,000 square feet, according to U.S. Census Bureau data. Europeans’ homes are about 1,100 square feet on average…. Such measures of wealth offer only a partial view of what it is like to live on these two continents. Europeans might earn less and own less stuff, but they also work less hours.

If we Americans have been ripped off in our trade with Europeans, why are we far wealthier than they are? If our so-called trade deficit with the E.U., as the president alleges, reveals that Europe has been “very unfair to our workers,” why are we paid more and have an unemployment rate of 4.3% while Europeans are paid less and have an unemployment rate of 6.0%?

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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Some Links

Wall Street Journal columnist Holman Jenkins – recalling a recent panic over UFOs – isn’t favorably impressed by the Trump administration’s approach to regulating AI. A slice:

Anthropic and its two closest peers, OpenAI and Alphabet, are accustomed to rolling out upgraded and more capable models every few months. For now that’s stopped. Here things stand without some coherent government leadership. The industry’s investment-heavy business approach can quickly blow up if it can’t release its products to customers.

Yann LeCun, Meta’s former chief AI scientist, is among a minority who say America’s AI leaders only hoist themselves by exaggerating both the progress and danger of their latest models. Unfortunately, government fears don’t have to be accurate or well-calibrated if they cut to the heart of government’s prestige and legitimacy. The large potential benefits to society of AI Washington might willingly throw away to avoid such risks to itself.

People have been identifying and failing to identify objects in the sky forever. This has made the UFO miasma a ready resort, since early in the last Cold War, for the U.S. government to misdirect public attention from its own miscues. So far 100% of identified objects haven’t been alien spacecraft, yet people like Steven Spielberg treat the simple fact of unidentified sightings as proof not only of alien visitation, but of government conspiracies.

Americans are especially prone to such invented suspicions when they sense that sources they should be able to trust are lying to them. This problem our politicians and press have recently amplified—lies by Donald Trump’s enemies about his Russian connections and Hunter Biden’s laptop, lies by Mr. Trump about the 2020 election, lies about Covid, about the value and shortcomings of vaccines, about Jeffrey Epstein, about President Biden’s cognitive status, about UFOs.

Even allowing that some government purposes require lying, the natural course of AI adoption ought to improve matters. Sadly, our current class of disinformation-addicted bureaucrats and politicians can also use AI to make things worse. Here it may be useful to witness the still-lacking progress in domestic drone defense. It’s not too soon for Americans to start thinking about how to elect a president who can talk sanely and confidently about how we’re going to survive this future.

Also warning against strict government regulation of AI is the Editorial Board of the Washington Post. Two slices:

Perfect security is a dangerous delusion. That’s something close to a gospel truth for cybersecurity experts, who work from the understanding that their work is never finished. This appears not to be the mindset at the highest reaches of the U.S. government, which is trying to regulate away dangers that cannot be regulated away.

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Gatekeeping advanced models only entrenches a false sense of security. Competitors to Sol and Fable trail by months, if that. Chinese open models are closing the distance seemingly every week, and Beijing probably has access to models Americans haven’t seen.

The vulnerability found in Fable, Anthropic correctly noted, already existed in rival models the government has left untouched. But the conclusion the Trump administration apparently reached — to apply the same controls to all frontier models, including GPT-5.6 — is the wrong strategy.

When more than 150 cybersecurity professionals signed an open letter demanding the controls on Anthropic be lifted, their point was not that the danger is imaginary. It’s that stripping the best tools from the good guys while adversaries race ahead anyway leaves the country less safe.

David Bier makes a compelling case to repeal all immigration legislation that attempts to strip away court review.

D.P. Curtin argues that “real literature communicates truths of human nature by showing, not telling.”

Here’s Damon Root on Edmund Burke.

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Quotation of the Day…

… is from Alexander Hamilton’s Report on Manufacturers, which was submitted to the U.S. House of Representatives on December 5th, 1791:

It is a well known fact, that there are parts of Europe, which have more Capital, than profitable domestic objects of employment. Hence, among other proofs, the large loans continually furnished to foreign states. And it is equally certain that the capital of other parts may find more profitable employment in the United States, than at home. And notwithstanding there are weighty inducements to prefer the employment of capital at home even at less profit, to an investment of it abroad, though with greater gain, yet these inducements are overruled either by a deficiency of employment or by a very material difference in profit. Both these Causes operate to produce a transfer of foreign capital to the United States. ’Tis certain, that various objects in this country hold out advantages, which are with difficulty to be equalled elsewhere; and under the increasingly favorable impressions, which are entertained of our government, the attractions will become more and More strong. These impressions will prove a rich mine of prosperity to the Country, if they are confirmed and strengthened by the progress of our affairs. And to secure this advantage, little more is now necessary, than to foster industry, and cultivate order and tranquility, at home and abroad.

It is not impossible, that there may be persons disposed to look with a jealous eye on the introduction of foreign Capital, as if it were an instrument to deprive our own citizens of the profits of our own industry: But perhaps there never could be a more unreasonable jealousy. Instead of being viewed as a rival, it ought to be Considered as a most valuable auxiliary; conducing to put in Motion a greater Quantity of productive labour, and a greater portion of useful enterprise than could exist without it. It is at least evident, that in a Country situated like the United States, with an infinite fund of resources yet to be unfolded, every farthing of foreign capital, which is laid out in internal ameliorations, and in industrious establishments of a permanent nature, is a precious acquisition.

DBx: Protectionists love to appeal to Hamilton for support of their restrictive schemes. And, indeed, much can be found in Hamilton’s writings to encourage protectionists. Hamilton rejected Adam Smith’s case for unilateral free trade, at least for countries with little industrial capacity relative to that of other countries (as was true for the U.S. in Hamilton’s day). Nevertheless, Hamilton was a far more able economic thinker than are most protectionists today – and certainly vastly better than are any Trump administration apologists for protectionism.

And in the quotation here, Hamilton reveals that he would reject the Trump administration’s hostility to trade deficits – which is hostility to the net inflow of foreign capital that Hamilton describes as “a precious acquisition.”

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Musing on Miran

Here’s a letter to the Wall Street Journal.

Editor:

Stephen Miran attempts to justify Trump’s tariffs by insisting that these levies will shift much of Americans’ tax burden onto foreigners and thus enable significant cuts in distortionary domestic taxes (“The Low-Tax Case for Tariffs,” June 27). His case, alas, is a string of howlers.

Consider, for example, his mention of the Congressional Budget Office’s estimate that Trump’s tariffs will raise $4 trillion over the next decade (and overlook the fact that this average annual amount of revenue is a paltry 5.4 percent of current U.S. government spending). Not only does the CBO’s estimate ignore the tariffs’ negative impact on economic growth, most of those tariff revenues will be paid by Americans. Mr. Miran conveniently leaves unmentioned the overwhelming amount of empirical research showing that foreigners are paying only a tiny fraction of Trump’s tariffs – by one credible estimate only four percent.

It must also be said that the greater the burden of the tariffs that is shifted to foreigners, the lesser are the price increases that Americans pay for imports and, hence, the more muted are the tariffs’ protective effects. Yet these protective effects are ones that Mr. Trump and other tariff supporters, including Mr. Miran, routinely cite as core justifications for the tariffs.

This inconsistency in his case for tariffs is itself sufficient to discredit all that Mr. Miran says on the matter.

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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Maybe the Final Days for Cafe Hayek

WordPress – the platform for Cafe Hayek – continues to change the (I’m unsure what to call them) procedures, or mechanics, for me to write and share posts at Cafe Hayek. Being poor and impatient with technology, I’m considering closing Cafe Hayek.

I’ll try Substack. I hope you’ll read there what I write. The Substack’s name is Cafe Hayek.

Because Cafe Hayek is more than 22 years old, and because it has been such an important and cherished part of my daily life for nearly one-third of my entire life, I can’t bring myself today to reach a final decision to shut it down. Perhaps I’ll keep it going in some form, but the more likely result is that within a month or two, there will be no new posts on Cafe Hayek.

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Some Links

George Will disagrees with the U.S. Supreme Court ruling in Mullin v. Doe. A slice:

Three days after Noem terminated TPS for Haitians and Syrians, she recommended “a full travel ban on every damn country that’s been flooding our nation with killers, leeches, and entitlement junkies” who “slaughter our heroes” and “suck dry our hard-earned tax dollars.” She refrained from echoing Trump’s assertion about kitten-cooking Haitians in Springfield, Ohio. This marks her as a MAGA moderate. JD Vance spread the pet-eating fiction because he said creating “stories” (his word) makes the media notice Americans’ suffering.

Surely justices are not required to ignore such rhetoric? And although thoughtful people disagree about whether, or how much, justices should consider the downstream consequences of their rulings, Kagan writes:

One of the Haitian plaintiffs, an Alzheimer’s researcher, has Type 1 diabetes, which can be easily treated in America but can be a “death sentence” in Haiti “given that country’s collapsed health-care infrastructure.” And a Syrian plaintiff will have to return with her 17-year-old daughter, who has lived here most of her life and “will have no future in Syria because she speaks little Arabic.”

Time and freshening breezes will cleanse Washington, dissipating the legacies of appointees like Noem, and of the president who chose them. The court’s mistaken ruling she provoked will be more lasting.

Meagan O’Rourke is right: Comrade Mamdani’s rent freeze will freeze many would-be renters out of housing in New York City.

Also critical of Mamdani’s rent freeze is the Editorial Board of the Washington Post. A slice:

Rent controls also lead to the deterioration of quality by removing incentives and resources for landlords to maintain their properties.

It’s the same story wherever they’re tried. When St. Paul, Minnesota, announced a 3 percent annual cap on rent increases for most apartments in 2022, home building plummeted and rents actually increased faster than they did in Minneapolis, just across the Mississippi River.

The inverse is true. When Argentine President Javier Milei abolished long-standing rent controls, average inflation-adjusted rents fell by 40 percent within a year.

In New York, the controls that already exist keep the rental market in a chokehold. Thousands of apartments sit vacant in one of the highest-demand cities in the world because it’s not economical to rent them.

Per Bylund explains that “entrepreneurship matters as much as raw invention.”

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Quotation of the Day…

is from Samuel Gregg’s brilliant July 2024 paper, “A Free, Prosperous and Secure America”:

Even if a subsidized industry appears to have developed a technology that gives State A military advantages over State B, that does not mean that the government assistance which accompanied this goal was effective or worth the cost from either an economic cost or national security perspective. One must ask whether the breakthrough might have happened regardless of subsidy or protection, and also what might have happened to those industries that did not receive help or benefits. It may well be that the industrial policy actually directed resources away from other companies that may have produced even better technology in more cost-effective ways.

DBx: So true. Yet how many people who scream “national security!” to justify protectionism ever bother to consider such possibilities? In my experience, almost none.

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Some Links

Scott Lincicome tells of Europeans visiting the U.S. for the World Cup and being awestruck by American abundance. Four slices:

As briefly mentioned in my last column, World Cup tourists’ repeated astonishment with everyday American abundance has become a viral sensation—and in a very good way. Seemingly not a day goes by without some happy foreign soccer fan raving on social media or to the press about quintessentially “American” things—free drink refills, bottomless chips and salsa, ginormous sports stadiums, fancy cars, big houses, ranch dressing, frigid air conditioning, shiny hospitals, etc.—that we consider relatively mundane features of daily life in the United States. (Buc-ee’s, Costco, and Texas Roadhouse have been particularly big hits, and for good reason.)

These viral posts have delighted American onlookers and captured endless media commentary on how the foreigners’ innocent—and often hilarious—observations have helped unite a divided U.S. and remind us locals of just how good we have it. In an era of endless grousing about the U.S. economy—reflected in various surveys of American “sentiment” and sometimes even justified—the ongoing episode has been a welcome, optimistic change of pace and a loud, folk-libertarian reminder that a nation’s capital, policies, and political class are most definitely not the same as its communities and citizens.

The scenes have also raised several noteworthy economic policy points—some good, some ominous—that deserve more attention.

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For starters, the amazement of relatively wealthy foreigners—you don’t take weeks off touring America if you’re dirt poor—at relatively middle-class American environments is real-world evidence of our nation’s immense everyday wealth.

The timing couldn’t be better (and, no, I’m not talking about the A/C-less heatwave in Europe).

As The Economist just documented, earlier this year Nobel laureate Paul Krugman and several other elite economists got into a heated (and very wonky) online debate about whether Americans’ living standards really were zooming ahead of those of our European counterparts.  The main point of contention was how to measure individuals’ purchasing power in both places, with one approach showing an increasing wealth gap and the other (Krugman’s) a relatively steady one. You can see the difference in the chart below: Using a constant “purchasing power parity” adjustment shows France’s GDP per capita—a standard way to measure individual wealth—to be declining versus that of the U.S., while using a “current PPP” adjustment shows little long term change, and thus a different wealth narrative…. Hilariously enough, thousands of European World Cup tourists—along with ones from Japan and other countries, too—have performed just that test, mere days after the economists proposed it. And the result is an absolute rout for Team America.

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Admittedly, the World Cup visitor story isn’t all wine and roses, and there are—as noted—some less-optimistic policy lessons buried in here, too. For one thing, all these visitors are a stark reminder of the economic and geopolitical value of foreign tourism—and its recent, policy-driven decline here in America.

As we discussed last year, one of the more interesting and unfortunate results of Trump’s tariff wars, deportations, and related overseas antagonism (threatening to invade Greenland, calling Canada the “51st state,” etc.) has been foreigners’ independent retaliation against U.S. goods and services. And tourism—a U.S. services export—has been the trend’s most conspicuous victim. According to a May 2026 Congressional Research Service report, in fact, international visits were down in 10 of 12 months last year, with the only increases coming before Trump took office (January) and due to an abnormally late Easter (April).

This drop, in turn, hurt lots of American businesses and likely reduced U.S. economic growth last year by billions of dollars:

According to the U.S. Bureau of Economic Analysis, in 2023, travel and tourism (both domestic and international) accounted for approximately 3% of U.S. gross domestic product (GDP). According to the World Travel and Tourism Council (WTTC), a nonprofit organization that advocates for and researches global tourism, international visitor spending in the United States was approximately $176 billion in 2025, a 4.6% decrease from 2024. WTTC further noted that GDP for the travel and tourism sector increased 4.1% globally in 2025 from 2024 but grew 0.9% for the United States.

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Relatedly, all these good vibes are a nice reminder of one of the ways that trade—in this case both foreign tourism and global sports entertainment—can help encourage peace. As I documented in a 2020 paper, a wide body of research finds that heightened foreign trade can meaningfully reduce (but not eliminate) the chances of armed international conflict through several channels.

Also writing about foreign visitors’ pleasant surprise at American abundance and generosity is Peggy Noonan. Two slices:

However many [visitors] there are, we are hearing from the young ones as they fan through the country to venues down South, out West, in Texas and Utah. They are seeing an America they never imagined and have made now-famous videos about how shocked they are—in the most positive sense. They expected a dark and brooding nation; they discovered a sun-filled magnificence. It’s so big, so spacious, has such wondrous shops, the best food and absolutely wonderful people. The videos have flooded TikTok, Instagram and X, and they speak with the wonder of 18th-century explorers who discovered an unknown indigenous people on a brilliant new continent.

They couldn’t stop talking about it. Texas barbecue, ranch dressing, endless refills—in England, asking for a refill is like “asking for a second mortgage” said one video—huge portions, 24-hour gyms, Buc-ee’s, Costco, Chick-fil-A. Football stadiums, air conditioning, the sheer variety—all the hot sauces, and 50 states with different rules. Strangers smile and ask how ya doin’. Among my favorites: seeing them delight in yellow school buses, which they thought only existed in movies.

A young man in his 20s, with wonder: “I would trade my Canadian passport for American citizenship without hesitating a single second. Some states have no state income tax.” Here, he said, a young person can compete and succeed. A British woman about 20, driving through a suburb, asked to be adopted “by anyone in the USA as soon as possible.” With Britain’s housing crisis, you “have to live in a cardboard box for your first house.” She’s driving past homes here, finding their prices on websites, is staggered by the bang for the buck.

One video has a German tourist telling CNN’s Jake Tapper that back home he’d gotten “a lot of negative views about the Americans in the last five years,” but had discovered “the people are amazing, so welcoming, the culture is amazing.”

A young Englishman in his 30s: “The media portrays Americans as rude, lazy, all of the above, and it’s further from the truth. . . . The amount of hospitality and kindness . . . and pride Americans hold is truly like no other country I’ve been to.”

…..

Why have the visitors’ views mattered so much to so many of us?

First, there’s a funny thing about America: We’ve never not cared about the approval of other nations, and in this are unlike other nations.

Second, when you live inside something—a country, a way of life—you inevitably stop seeing it. Walk by the same work of art for 30 years, you won’t really “see” it each day. The young European arriving at a Dallas Costco or a California In-N-Out Burger sees a small marvel of organization, scale, of possibility. For you it’s just Tuesday. You’re used to it. They made us see it again.

“AI’s biggest impact may be making workers more valuable” – so argues Mark Jamison. A slice:

Consider the technologies that transformed the American economy during the past century. Railroads expanded markets. Telephones and then the internet accelerated and expanded communications. Electricity revolutionized production. Bar-code scanners transformed retailing. Each innovation altered the nature of work. But their most important contribution was making people more productive.

Artificial intelligence appears to be following a similar path.

Across industries, companies are using AI to handle routine tasks while enabling employees to focus on higher-value activities. Telecommunications companies are deploying AI to monitor networks, identify cybersecurity threats, and improve customer service. Utilities are using AI to inspect infrastructure, predict equipment failures, and improve safety. Transportation firms employ AI to identify maintenance needs before breakdowns occur and to reduce accidents caused by human error.

In finance, AI is increasingly becoming basic infrastructure. AI is competing with Bloomberg terminals, which once transformed how financial professionals gathered and analyzed information. AI helps workers process enormous quantities of data, identify patterns, and evaluate alternatives more quickly than ever before.

Arnold Kling agrees with Bryan Caplan’s impressions of UATX.

Reflecting on the reflecting-pool debacle, Nick Gillespie writes that Trump “is forcing his biggest supporters to choke down his incompetence and delusions like so much algae.”

Joseph Mikowitz, from Toronto, has this letter in today’s Wall Street Journal:

As a Canadian living in a democratic socialist country, I envied the true democratic nature of America. Its Founding Fathers created a unique entity, a land of human expression, freedom, creativity and individuality. Yet as America is about to celebrate its 250th anniversary, the Founders’ creation is at risk of being destroyed. Socialism and America’s independence are mutually exclusive by definition, practice and ethos. Socialism sets out to impart the governing body’s rules on society, and, consequently, nonconformists are deemed deplorable. That’s exactly what America broke away from in 1776.

My intrepid Mercatus Center colleague, Veronique de Rugy, reminds us of the inescapable destructiveness of a wealth tax. A slice:

[Gabriel] Zucman wants a coordinated global minimum tax on billionaire wealth, designed explicitly so that there’s nowhere left for the superrich to move. He admits frankly that the whole point of his international coordination plan is to defeat the mobility problem. If wealth taxes are global, the thinking goes, they finally work as intended.

Not so fast. It’s easy to count up lost tax revenue after taxpayers move away. There is also a less visible, but no less real, behavior change from people who stay home (by choice or because there’s no better option).

The effect showed up in Denmark, where decades of tax records—covering people who by and large stayed put during its wealth-tax era—show dwindling levels of wealth accumulation when more of it is taxed away. Nobody had to leave the country for the effect to show up; the incentive to save and build wealth in the first place had simply shrunk.

Inside the businesses of the wealthy, there’s an avoidance channel that requires no moving van. When a wealth-tax bill comes due, the owner of a closely held company will often pull out a larger dividend to cover it. Once that money has left the company, it doesn’t go back into payroll or business expansion.

Make no mistake, the non-wealthy will suffer from this tax too. As wealth taxes diminish saving and reinvestment, the capital stock that workers depend on for tools, equipment, and business expansion stops growing as quickly as it should. Wages rise when there’s more capital for each worker to use, so the slower buildup eventually means smaller paychecks for people who would never pay a wealth tax. This effect compounds for decades, so a modest annual drag turns into a substantial gap by the time anyone notices it in the data.

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Quotation of the Day…

… is from page 75 of Richard Epstein’s magnificent 1995 volume, Simple Rules for a Complex World:

The desire for more is one of the few features that is indispensable for human progress and advancement. The right question to ask is not why we want more. It is how are we prepared to go about getting the more that we all want.

DBx: Please, let’s have here no snooty proclamations that ‘real’ human beings don’t always prefer more to less.

The “more” is not a specific thing or phenomenon (or set of phenomena). The “more” for you, a real human being, refers to whatever it is that you value. You might value only sensual gratification, in which case you want more rather than less such gratification. You might value only time spent with your family, in which case you want more rather than less such time. You might value the unchanging look and feel of your hometown’s downtown and residential areas, in which case you want more security, rather than less security, that that unchanging look and feel will be maintained.

And, of course, that which you want more of might or might not be that which I want more of. In the former case, we might nevertheless still disagree about what are the best means of obtaining more of what we both want. In the latter case, we must somehow compromise with each other (and countless other of our fellow human beings) to decide how much more you will get of what you want more of and how much more I will get of what I want more of.
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There’s a slight yet significant imprecision in what I wrote above. So let’s be precise: It’s never accurate to say that “you might value literally only more of X, Y, or Z.” No one values anything in such a way. We instead value ‘at the margin.’ Given your situation now, you will value some additional amount of X more than you value the increments of Y and Z that you must forego in order to obtain that additional amount of X. And when you obtain that additional amount of X, the value to you of yet more X will be less than was the value you expected to obtain from that first additional amount of X. At some point, you’ll prefer more incremental units of Y and Z than more units of X – although you very likely then still would prefer more units of X if obtaining more units X were less costly.

A final point: Being mortal, you will always have some desires – wishes – demands – goals – hopes – that are not fully fulfilled. This reality is no less true for trillionaires than it is for desperately poor persons. In this earthly vale, there will always be more of something(s) that you want. Always.

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Some Links

Michael Saltsman, of the Employment Policies Institute, congratulates Oklahoma voters for wisely rejecting a proposed hike in that state’s minimum wage. A slice:

A recent survey of U.S. economics professionals, released by my organization, found nearly 3 in 4 believe a $15 minimum wage will reduce employment among young workers and increase automation. This concern doesn’t always resonate with voters who perceive an immediate benefit in a higher hourly rate for low-income workers.

Scott Lincicome and Chad Smitson write insightfully about Trump’s hostility to a trade agreement that Trump himself engineered and once praised: the USMCA (that is, the 2020 modified NAFTA agreement). A slice:

Thus, somewhat absurdly, the agreement that President Trump helped to create and is threatening to kill has become the primary way for North American supply chains to survive his tariff agenda.

The USMCA certainly has some faults, and perhaps forthcoming reviews will address some of them. Overall, however, it’s been a net benefit for American manufacturers and the US economy, and—contra Trump’s words—it’ll likely be here after he’s gone.

For a discussion of these issues (and plenty more), you can join us at Cato’s event this Thursday (6/25) or watch online at the same link.

Pierre Lemieux is correct: “Speaking precisely is useful.”

The Cato Institute’s Colin Grabow spoke out against the cronyist U.S. sugar program.

George Will describes Cuba as “a threadbare museum of Marxism.” A slice:

In March, a mob sacked a Communist Party headquarters in central Cuba. This spark of insurrection was aberrant and fleeting. Totalitarianism always has one foundational objective, which it has achieved in Cuba. The population is a dust of wary individuals, easily blown about. Their capacity for collaboration — for politics — has atrophied. A smooth democratic transition is a chimera.

Larry Ciolorito’s letter in today’s Wall Street Journal is excellent:

Barton Swaim’s plea for less government activism “Please, No More New Deals” (Unruly Republic, June 18) is reminiscent of an exchange from the movie “Lawrence of Arabia.” An officer says to Gen. Allenby, “Look, sir, we can’t just do nothing”, to which the general replies, “Why not? It’s usually best.”

The Editorial Board of the Wall Street Journal shares the finding of a new Mackinac Center report that shows – surprise! – that “corporate welfare is a bad economic bet.” A slice:

Michigan’s Democratic Gov. Gretchen Whitmer just finished a jaunt to Europe to attract business to her state, and if only she could be counted on to lure them with good policy instead of taxpayer money. A new report on business subsidies in Michigan during her tenure adds to the evidence that corporate welfare is a bad economic bet.

Gov. Whitmer has authorized nearly $7 billion in business subsidies during her two terms, says the report by James Hohman of the Mackinac Center for Public Policy. Mr. Hohman focuses on eight of the biggest projects, which put $2.7 billion of taxpayer money on the line. Some $1.8 billion has been paid out, and “none of these deals have delivered what was originally announced,” he writes.

Of 20,595 jobs promised from these deals, only 602 have been created—a mere 3%, estimates Mr. Hohman. The under-deliveries include $109 million in 2019 for Fiat Chrysler to upgrade plants and create 6,433 jobs in Warren and Detroit. Fiat Chrysler has added some jobs, says Mr. Hohman, but his evaluation of state reports suggests that’s no thanks to the state incentives, which were canceled.

Another dud: $125 million authorized in 2022 for Gotion to build an electric-vehicle battery plant employing 2,350 people that was never built. A $200 million deal in 2023 to upgrade a paper mill in Billerud was canceled. In 2024 the state touted a $250 million deal to bring semiconductor manufacturer Sandisk to Flint and create 7,400 jobs, but the company pulled out. “The result is a big empty field” and “one school demolished,” says the report.

Nick Gillespie warns against increased government regulation of AI.

Jeffery Degner recounts the sordid history and purpose of the 1936 Robinson-Patman Act.

Jonah Goldberg mulls the miasma on the Mall. A slice:

The man who vowed to “drain the swamp” of D.C.’s corrupt cronyism used figurative swampy means to deliver literal swampy ends.

Another familiar aspect of the pool fiasco: A project Trump touted as proof of his genius and expertise becomes proof of unpatriotic enemies undermining him when it flounders. Without any evidence, Trump claimed that the only reason the Reflecting Pool’s paint is peeling and algae blooming is because anti-American “vandals” sabotaged it with a “300-foot long gash.”

How vandals evaded park police, security cameras and his own National Guard deployment remains unknown. Never mind how they put a 300-foot gash in a paint job Trump described as “So very strong. You couldn’t, if you had a knife — I don’t want to give anybody ideas — if you had a knife, you can’t even cut it. So strong, so powerful.”

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