President Donald Trump’s preferred monetary policy is simple. Is the economy sluggish? Cut interest rates. Is it heating up? Also cut interest rates. Now there’s a new addendum: If his handpicked Federal Reserve chair won’t play ball, hold the economy hostage.
At least, that’s what Trump threatened on Friday on Truth Social. He wrote that if the Fed doesn’t “get smart” and lower rates, he will halt trade entirely with any country that maintains a trade deficit with the United States. That would include China, Mexico, Canada, Vietnam, South Korea and dozens of others — in short, many of America’s top trade partners.
If Trump thinks elevated interest rates slow the economy, wait until he sees what cutting off trade would do.
Wilfred Reilly rightly ridicules the doomsaying of Bill Gates and other panic peddlers. A slice:
The world is not coming to an end — again.
In October 2025, Microsoft’s Bill Gates — long the worst sort of climate doomsayer — published a lengthy memo explaining that, while global climate change is real, “it will not lead to humanity’s demise.” According to Gates, the “doomsday view of climate change” that says it “will decimate civilization . . . is wrong. . . . People will be able to live and thrive in most places on Earth for the foreseeable future.”
The desktop baron argues for reevaluating temperature targets, writing that strict focus on near-term temperature and emissions goals is an imperfect measure of progress. Most important, he now advocates a policy shift toward maximizing “human welfare” and human flourishing — shifting much of the absurdly inflated climate budget toward projects fighting disease, famine, and poverty itself. In summary, the climate problem exists, but the cutting-edge view today is that it is fairly minor in comparison with other issues and can best be combated by human initiative.
Gates’s memo had a familiar ring to it. As I note in my upcoming Broadside/HarperCollins book Confidently Wrong, one of the defining features of upper-middle-class life during the past 50–60 years has been scientists, activists, and public intellectuals making the most horrifying kind of doomsday predictions — which invariably fail to come true. Remember the Club of Rome and the Limits to Growth report?
Back in 1972, a group of top academics used then-advanced regression analysis to argue that the planet at some poin must run out of key resources. Quite specific dates were provided for this global near-apocalypse. And then not one of the predictions came true. As the American Enterprise Institute’s Mark Perry noted 40 years later, in his teasingly titled “Time Has Not Been Kind to the Limits to Growth,” the report “got it so wrong because its authors overlooked the greatest resource of all: our own resourcefulness.”
Because of the so-called Green Revolution in agriculture and horticulture, humanity’s food supplies have not collapsed. In fact, Perry reports, “malnourishment has dropped by more than half,” from well over 30 percent of the world population to about 15 percent. “Nor are we choking on pollution,” as electric, hybrid, and even hydrogen vehicles have replaced many of the high-dollar gas hogs of the past. In fact, the annual risk of pollution-caused death has shrunk from one in 500 to one in many thousands since 1900. Perhaps unsurprisingly, given their think tank’s focus, the AEI boys argue that the real solution to environmental problems is innovation, driven by “economic growth.”
Democratic socialism is a terrible ideology. If implemented, its agenda would cause grave harm and imperil democracy itself. And in seeking massive state control of the economy, today’s socialists ironically have much in common with the MAGA nationalists they claim to oppose.
Both promote government control over the economy, and both paths undermine liberty, prosperity and democracy. Socialists do not control the Democratic Party in the way MAGA largely dominates the Republicans. But their influence is growing.
My GMU Econ colleague Vincent Geloso tells “what critics keep getting wrong about capitalism.” A slice:
There is nothing wrong with criticising capitalism, Friedrich Hayek, Milton Friedman or classical liberalism. The problem is that much of the discussion does not pass even a modest ideological Turing test. An ideological Turing test asks whether one can state an opposing position so accurately that its proponents would recognise the argument as their own before one proceeds to criticise it. Here, too often, they would not.
This points to a common reflex in debates over ‘capitalism’ and ‘neoliberalism’. The vocabulary is often not used to define but rather rationalise already-held ideological priors. The characteristics one dislikes are incorporated into the definition of the system, after which those same characteristics are rediscovered as criticisms of it. The conclusion has, in part, been smuggled into the premises. But these end up being recycled over and over as one scholar states it before another regurgitates it back as fact and so forth.
Trump is right to support data centers, but his tariffs work in the opposite direction.
Certainly, trade liberalization should not be regarded as ushering in the type of perpetual peace envisaged by Kant. Nonetheless, we ought to resist the temptation to imagine that, in a world in which states remain the essential building-block of international relations, economic nationalist policies are more likely to help realize national security objectives.
Most notable economic, technological or intellectual achievements involve multiple factors – beginning with a desire to succeed in the particular endeavor, without which all the ability and opportunity mean nothing, just as desire and the opportunity mean nothing without the ability. What this implies, among other things, is that an individual, a people, or a nation may have some, many or most of the prerequisites for a given achievement without having any real success in producing that achievement. And yet that individual, that people or that nation may suddenly burst upon the scene with spectacular success when whatever the missing factor or factors are finally get added to the mix.
The past few decades have been an era of globalization. Most countries have moved to reduce trade barriers and take advantage of growing world trade. How have they done so? One way a country can reduce its tariff and non-tariff barriers is simply to act unilaterally. A unilateral tariff reduction occurs when a government decides to reduce its import duties on its own, independently of other countries. In recent years, many developing countries have chosen this path. When China, India, Vietnam, and other Asian countries opened up to world markets, they did so based on domestic political changes in favor of economic reforms, including a more open trade policy.
A capital inflow occurs because foreign investors can get a higher real interest rate here than at home. If the reason the interest rate is high is, as sometimes asserted, that Americans have become increasingly impatient, unwilling to give up present utility for future utility, then it is a symptom of a change that will ultimately make us poorer – we are living on future income and some day the bill will come due. If the reason is that American firms have lots of good investment opportunities, and are therefore happy to offer higher rates than Japanese firms, the bill will still come due, but we will have the returns from those investments to pay it with.
