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The Wall Street Journal‘s Collin Levy decries the autocratic-like spread of the image of Trump. A slice:

This sort of leader-worship is common among autocrats. In Cuba, Vietnam and China, images of Fidel Castro, Ho Chi Minh and Mao Zedong have long been present in government buildings, schools and private businesses. (Not to mention T-shirts and key chains for despot tourist kitsch.) In North Korea, citizens are expected to hang pictures of Kim Jong Un in their homes.

Sober observers of our democracy note that these mundane flights of Mr. Trump’s ego don’t rise to the level of consequential decisions on policy or foreign affairs. But they are assaults on the country’s character as a republic born from distrust of monarchical grandiosity.

Billy Binion explains that “Trump’s proposed $250 bill is everything the founders despised.” A slice:

America’s 250th is a celebration of the Founding, an experiment defined, at its core, by a rejection of monarchs and leader worship. It is why George Washington opposed the U.S. Mint putting his face on coinage—that sort of adulation was incompatible with what he was trying to build. He was not alone. As the plan was debated by the U.S. House, one early representative cautioned against “imitating the flattery and almost idolatrous practice of Monarchies with respect to the honor paid to their Kings, by impressing their images and names on their coins.” Lawmakers settled on the emblem of liberty instead.

It is hard to know if Washington et al. would be disappointed that U.S. currency has since evolved to feature past leaders who made significant contributions. But the law’s constraint—that they no longer be living—is in keeping with the reservations the first president expressed about indulgent reverence for the top office, and whoever is in it at any given time. America was leaving that nonsense behind. A $250 bill dedicated to the current president is the exact sort of egomaniacal vanity project the Founders detested.

Noah Rothman is right: “Only the Cuban revolution’s true believers can still contend with a straight face that the island’s problems have been imposed on them by the United States.” A slice:

Yes, Trump’s sanctions and blockade tactics have throttled the island’s economy, Cuban economist Mauricio de Miranda Parrondo conceded in a New York Times op-ed. “But Cuba’s economy was already on the brink of collapse,” he added. “What is happening in Cuba today is essentially the result of decades of structural economic failure under a rigid political system that has consistently resisted any reform.” And that resistance is buckling.

Ossified revolutionary slogans might sustain the Cuban regime’s comfortable apologists in the West, but they are packaged and retailed to a foreign audience.

Adam Millsap makes the case that the real revolutionaries are the defenders of classical liberalism.

Pay attention to Timothy Taylor.

J.D. Tuccille calls for a renewal of federalism.

Hardwood Federation tweets: (HT Scott Lincicome)

Tariffs have rippled through the US economy, trickling down to home renovation and decreased numbers of home ownership.

Lumber demand is down because of tariffs.

The Editorial Board of the Washington Post opines on Beijing giving the Chinese people at least some of what is rightfully theirs: more freedom to trade with people in Africa. A slice:

China recently implemented a “zero-tariff” policy for 53 countries in Africa. As Chinese and African citizens increasingly reap the mutual benefits of trade, America is losing out by heading in the opposite direction.

China imports mostly raw materials and resources from Africa — crude oil, copper, cobalt, agricultural products and unprocessed minerals. Removing import taxes mean that Chinese consumers will benefit from lower prices and Chinese companies will pay less for inputs into their own manufacturing.

Tax-free imports to China won’t alone help the continent move up the value chain, but they provide African nations with much-needed hard currency. The young continent also benefits from imports of higher value manufactured goods that improve lives.

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… is from page 7 of Richard Salsman’s paper, “Alexander Hamilton As Economist: A Proper Verdict,” which is a chapter in the hot-off-the-press book Unsung Heroes of the Market: The 24 Underrated Economists You Need to Know – a volume edited by Robert Whaples, Christopher Coyne, Gregory Robson, and Diana Thomas:

He [Hamilton] knew that a capital surplus (net inflow), mirroring a merchandise deficit, was akin to an international vote of confidence in the United States.

DBx: Hamilton was correct. Private investors do not knowingly invest in declining industries or economies. They invest in industries and economics with promise.

This truth that was understood by Hamilton is no less real and relevant today than it was in the late 18th century. Yet President Trump and countless other protectionists – left, center, and right – incessantly repeat the myth that U.S. trade deficits are a signal that the U.S. is “losing” at trade, either because of our own incompetence or inadequate savings, or because of perfidious foreigners taking advantage of Americans.

I repeat: No economic concept is responsible for more confusion and lousy policy than the so-called “balance of trade.”

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I’m serving as guest editor for a forthcoming issue of the Journal of New Finance. Here’s the call for papers.

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We invite you to submit proposals for original papers to be published in a special issue of the Journal of New Finance. Each accepted paper will be awarded an honorarium of $600, and the authors are expected to participate in an online workshop on the papers.

The subtitle of this special issue – which indicates its focus – is “Tariffs, Capital Allocation, and Global Fragmentation.” Over the past ten or so years, the multilateral rules-based global trading system that reigned from the end of WWII until the early 21st century has come under severe attack. Why is economic nationalism now ascendant? What sorts of protectionism and industrial policies are playing out? What are the likely economic and political consequences of this fragmentation of global trade and finance? Is it desirable to reverse this fragmentation and, if so, what are plausible means of doing so?

If you have ideas for original research into this timely issue, please submit by July 1st an abstract of 500 to 600 words.

* Extended abstract submission deadline: July 1st
* Notification of abstract acceptance: July 15th
* Full paper submission deadline: October 15th
* Expected publication date: January 2027

Proposal can be submitted to me at [email protected]

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Here’s a letter to the Wall Street Journal – a letter pointing out only some of the flaws in Greg Ip’s latest column.

Editor:

A new report showing that real hourly wages have risen by 3% since 2019 while profits have risen by 50% has Greg Ip worried “about the political stability of an economy in which ever more output flows toward shareholders instead of employees” (“The Record Divide Between Corporate Profits and Worker Pay,” May 29).

Mr. Ip misses two important realities that should calm his fears.

First, more than half of American workers already own corporate shares through their retirement plans. Thus, a large portion of the “ever more output flows toward shareholders” are flows also toward employees rather than, as Mr. Ip writes, “instead of employees.”

Second, nothing stops workers from more directly profiting from the boom in equity values. Buying corporate shares is today easier than ever; it can be done inexpensively with a smartphone. And because shares can be purchased in small lots, almost every American worker can, even apart from his or her retirement plan, afford to join the ranks of capitalist investors. If and to the extent that workers don’t take advantage of this opportunity, that result reflects workers’ free choice rather than a problem with the economy.

It’s intellectually fashionable to portray workers in free markets as haplessly pitted against capitalists in a zero-sum struggle for wealth. Yet for the reasons given above – and well as because capitalists’ earn wealth only by producing goods and services that improve the living standards of the masses – this portrayal is false.

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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David Henderson knows an absurd economic argument when he sees one.

My Mercatus Center colleague Jack Salmon is justly critical of Jasper Boll’s, Emmanuel Saez’s, and Gabriel Zucman’s attempted justification for increasing the taxation of billionaires.

The Editorial Board of the Washington Post rightly criticizes Elizabeth Warren’s predictable impulse to have government intervene in the economy. A slice:

Warren hasn’t arrived at her position because she thinks AI will be beneficial to workers, however. Instead, she thinks it “could further rig our economy,” driving up unemployment and the price of electricity.

“Americans are hanging on by their fingernails in an economy that funnels wealth to the ultra-rich and leaves crumbs for working people,” Warren writes.

Never mind that the latest survey of financial well-being from the Federal Reserve found that 73 percent of Americans say they’re doing fine. And some 81 percent of workers who use generative AI say it saves time.

Warren has never been one to let the data inhibit her demagoguery. The primary opportunity Warren sees in AI is not enhancing productivity or helping cure diseases. She sees it as a revenue piñata for politicians to whack.

Also from the Washington Post‘s Editorial Board is this just criticism of labor unions continuing to do what labor unions have long been in the habit of doing: Seeking monopoly privileges for their members at the expense of consumers and non-unionized workers. Two slices:

Autonomous vehicles have the potential to revolutionize the transportation industry and make U.S. roads safer. Yet unions are doing everything they can to keep them off the road.

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This is rent-seeking, plain and simple. These unions represent an established industry looking to use state governments’ control of public roads to cut off competition.

David Neumark finds that minimum-wage legislation isn’t closing racial gaps.

Darin Bartram warns of the regrettable precedent being set by Trump’s “anti-weaponization” fund. Two slices:

There are plenty of reasons to be wary of President Trump’s so-called Anti-Weaponization Fund, which will compensate claimants who say federal law-enforcement or regulatory agencies targeted them for political reasons. These include the cost, nearly $2 billion in public funds, and the wrongful actions of many of the prospective recipients, including rioters who assaulted police officers on Jan. 6, 2021.

Here’s another reason: It will set a precedent that a future president could use to bypass Congress and the courts to implement wide-reaching policies without congressional support—including race-based reparations.

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Remedying perceived harm to Mr. Trump’s supporters stemming from the Russia-collusion investigations or the events following Jan. 6 could seamlessly morph into a future president’s deciding to implement an even broader remedial program—providing reparations to black Americans for slavery and “systemic racism.” The Trump fund would give legitimacy to administrative compensation for a politically defined class of government victims—even if neither Congress nor any court has authorized such compensation.

Justice should be administered impartially and shouldn’t be weaponized against political rivals. That happened with Mr. Obama’s Russia-collusion investigation, which continued through Mr. Trump’s first term. It continued through the Biden administration. But the Anti-Weaponization Fund is the wrong remedy, and one that risks making the government even more lawless.

Erik Lidström explores “our stone age brain in Adam Smith’s Great Society.”

Norbert Michel and Jai Kedia describe the Federal Reserve’s post-2008 powers as “a fiscal time bomb.”

Clark Packard identifies yet another of Trump’s trade ‘policies’ that is likely driven, not by any principle – in particular, here, to reduce U.S. reliance on critical imports from China – but, rather, by self-dealing. A slice:

China’s rare-earth chokehold poses genuine strategic and economic problems—one serious enough to briefly shutter American auto plants and rattle defense procurement officials when Beijing moved to restrict exports in 2025. A supply chain concentrated in the hands of a single foreign country willing to use it as a lever in trade disputes demands a serious and credible policy response. What the Vulcan situation describes is the opposite and implies a larger inherent flaw with industrial policy: A $670 million government commitment, including the largest Pentagon loan of its kind, pushed through in weeks at the direction of a White House official with a personal relationship to the president’s son, whose venture fund had taken a stake in the recipient company three months earlier.

Whether or not the sequence of events proves anything unlawful, or mere coincidence, it is exactly the kind of arrangement that erodes public confidence and raises a straightforward question that has so far gone unanswered: If the administration is serious about reducing American dependence on Chinese rare-earth supply chains, why does its industrial policy find a way to personally benefit the president’s family? Perhaps it’s a coincidence, but the public has a right to know more.

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… is from page 60 of the hot-off-the-press book by my GMU Econ colleague Christopher Coyne and his frequent co-author, GMU Econ alum Abigail Hall, Austrian Economics: An Introduction:

Private markets contain mechanisms to guide economic actors. Property rights over the means of production incentivize owners to use resources efficiently because they reap the rewards for doing so and bear the costs of failing to do so. Prices emerge through market exchange and inform producers and consumers of the trade-offs they face in the purchase of inputs for production (producers) and in the price they pay for purchasing final outputs (consumers). Finally, profit and loss accounting informs producers about whether their decisions align with the underlying preferences of consumers.

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The Editorial Board of the Wall Street Journal, although finding much with which to agree in Pope Leo’s new encyclical on AI, is dismayed at the Pope’s naive faith in the state. A slice:

Technology invariably requires workers to adapt, often with considerable disruption to the status quo. But it also eases their yoke over the long haul. Throughout history the diffusion of technology has democratized information and improved living standards, especially for the poor. The internet and social media have enabled people living under repressive regimes to share information, which is why Iran’s regime has cut them off for weeks.

“Every introduction of automation and AI should be accompanied by verifiable measures to protect the employment, retraining and participation of workers,” Pope Leo writes. He calls for regulation of algorithms that “influence credit distribution, personnel selection or access to services and opportunities” and “measures to ensure equity: taxation, social protection and industrial policies.”

Amen, nods AOC. While AI isn’t without risk, government control is likely to result in an even greater concentration of power. Regulation tends to protect incumbents and retard competition. Repressive regimes can also use AI to suppress dissent, as China’s Communist Party uses AI to surveil and censor its people.

Most fanciful is the pope’s claim that the mandarins at the United Nations should be entrusted with overseeing AI. He says they “are essential instruments for promoting a civilization of love, for they can foster dialogue among nations and promote the peaceful resolution of conflicts.” This is truly the triumph of hope over experience.

There’s no doubt that as AI develops it will need an ethical rudder, and the pope’s contributions are worth listening to. But his faith in a beneficent state is misplaced.

Also troubled by many of Pope Leo’s expressed views on AI is Wall Street Journal columnist Barton Swaim. Two slices:

So large and discursive is the document that one assumes the pope intended it for the well-informed few, the sorts of people who write books and articles and make policy decisions about the encyclical’s main subject: artificial intelligence.

Its inscrutability to ordinary people is part of what robs the document of whatever power it may have had at a third the length. The more fundamental problem is that so many of the pope’s pronouncements seem aimed to please jet-set transnationals.

Few such power brokers and tech-industry elites will disagree with Leo’s assertion that “every introduction of automation and AI should be accompanied by verifiable measures to protect the employment, retraining and participation of workers” or that schools have a duty to train students to use AI tools “responsibly, critically and creatively, rather than passively succumbing to their influence.” The pope’s contention that “the use of force, violence and weapons reflects a relational poverty that always has disastrous consequences for civilian populations” won’t provoke any objections from the global glitterati.

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Plainly Pope Leo has genuine concern for the ill uses to which artificial intelligence may be put. But nobody yet understands the moral import of AI technologies, and the pope’s foray into the subject doesn’t impress. Calls for governments to “regulate” AI are about as coherent, and as dangerous, as those to regulate “misinformation”: nebulous terms in both cases. He might reflect—not that he wants the counsel of a hardened Prot—on the rapturous praise his essay received from the usual precincts. As another priest once put it, “Woe unto you when all men shall speak well of you, for so did their fathers to the false prophets.”

GMU Econ alum Ryan Young, writing at National Review, offers three arguments against tariffs. A slice:

The incentive problem is that, even if policy-makers were able to design a wise tariff policy, it would never make it through the political process intact. Tariffs are made by the government we have, not the government we wish we had. Tariffs also provide policy-makers with tools to reward friends and punish enemies.

In the last year, Trump has raised tariffs for reasons ranging from a television commercial that aired during baseball’s World Series to irritation with the Swiss president’s tone during a phone call.

More generally, politicians’ incentives are to look good so they can win reelection. Good policy is a lesser priority.

The Editorial Board of the Washington Post describes Zohran Mamdani’s housing policy as “less a plan than a raid.” A slice:

The mayor also vowed to “take aggressive legal action” against landlords who chronically fail to maintain their buildings to his standards. That could result in government seeking to “transfer ownership to responsible stewards” of his choosing.

In practice, that means expanding use of the city’s 7A program, which allows the Department of Housing Preservation and Development to pursue legal action against owners whose rental units have fallen into disrepair. No doubt there are some irresponsible landlords, but they aren’t the primary driver of New York’s housing crisis.

The truth is that a century of improper state interventions in the rental market are the leading culprit for why so many apartments have deteriorated.

The pattern is always the same. Rent controls are introduced. Landlords pull properties from the market, reducing housing supply. The quality of the remaining housing declines because there is little incentive — and even less money — to renovate or improve units.

While we’re on the subject of elites who have little respect for property rights, Trump says that Americans “hate our country” if these Americans seek refunds of the taxes – a.k.a. tariffs – they were unlawfully compelled to pay.

My intrepid Mercatus Center colleague, Veronique de Rugy, warns of the economic damage that will be unleashed by California’s billionaire wealth tax. A slice:

Start with the Billionaire Tax Act. The gap between what it promises and what it would deliver is stark. Joshua Rauh of Stanford University has run the numbers with his Hoover Institution colleagues, and the results cast doubt on the prospect of any revenue gain whatsoever.

Proponents claim the tax would raise $100 billion. Rauh’s team found that billionaires have already been voting with their feet: Larry Ellison left California in 2020, and six others, including Google cofounders Larry Page and Sergey Brin, departed between the proposal’s announcement and Dec. 31, 2025—the day before the liability would take effect.

Corey DeAngelis makes the case that “school choice can make America healthy again.”

Rich Lowry is correct: “Data centers aren’t the enemy.” A slice:

The evidence doesn’t show much effect on the price of electricity, though. Rates are high in states with misbegotten policies that make electricity more expensive, while rates are lower and increasing more slowly in the states that have the most data centers. That’s because a state like Texas, with a large concentration of data centers, has a policy of energy abundance that easily absorbs more demand.

The water concern, too, is overblown. All sorts of other activities use much more water. The Substacker Andy Masley points out that if the amount of water used by data centers triples by 2030, they still would require only 8 percent of the water it takes to maintain the nation’s golf courses.

According to scare-mongering headlines, AI data centers are practically sucking Texas dry. Yet Masley notes that they have added an infinitesimal 0.005 percent to the Lone Star State’s water demands.

Then there’s the complaint that data centers are unsightly. People post beautiful natural vistas on social media, commenting that data centers don’t belong there. This makes it seem as if data centers are going to be located in the middle of, say, Zion National Park, rather than on sites that would otherwise host warehouses or other industrial-type projects.

“Social Security’s funding problems are worse than expected.”

David Bahnsen exposes Elizabeth Warren’s appalling ignorance of private equity.

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… is from page 200 of Deirdre McCloskey’s excellent forthcoming – in November – book, Equality of Permission:

Life, liberty, and the pursuit of happiness has three terms, not one, and only the last has to do with income – though no Founding Father, and certainly not the Virginians, nor for that matter any political economist at the time, predicted the enormous fruit in economic growth from primary liberalism. Life and liberty reject supervising human masters.

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The Cato Institute’s Marian Tupy eloquently defends the wealth earned by Jeff Bezos and other successful entrepreneurs. Two slices:

Modern debates about wealth start in the wrong place. They begin with the fortune. They should begin with customers and their time. Mr. Bezos is worth roughly $275 billion. That number offends many people because they assume wealth must have been taken from someone else. But Amazon didn’t become valuable by force. It became valuable because hundreds of millions of people chose to use it.

Consumers weren’t forced to buy books, batteries, diapers, cables, razors, tools, groceries or printer ink from Amazon. They did so because Amazon saved them time, money, effort or uncertainty. Sellers weren’t forced to use Amazon’s marketplace. They did so because it gave them access to demand. Firms weren’t forced to use Amazon Web Services. They did so because renting computing power was cheaper than building and maintaining their own information-technology infrastructure. That is capitalism: People get rich by creating something others value enough to buy.

The Bezos fortune looks large because it is visible. The value Amazon created is harder to see because it is dispersed. A mother who doesn’t drive to a store to buy diapers doesn’t appear in an economic headline. A small business that reorders supplies in two minutes doesn’t make the evening news. A rural customer who gains access to goods once available only in cities doesn’t receive a subsidy check with Amazon’s logo on it. Yet each transaction saves time, and time is limited.

Consider the arithmetic. Suppose an hour of labor is worth about $64, roughly the average gross domestic product per hour worked in the countries in which Amazon operates. If Mr. Bezos’ fortune corresponded to the total value that Amazon created, his $275 billion would represent about 4.3 billion hours of saved time. Divided among Amazon’s more than 300 million active customers, the saving comes to about 14 hours per customer over Amazon’s life. That’s nothing. Many customers save that in a month.

But entrepreneurs don’t capture all the value they create. The Nobel Prize-winning economist William Nordhaus estimated that innovators keep only a small share of the social value—roughly 2%—produced by their innovations. Under that assumption, Mr. Bezos’ $275 billion fortune implies that Amazon created about $13.8 trillion in total value for society.

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None of this means Amazon is perfect. No large company is. Amazon can make errors. But that doesn’t cancel the basic fact: Amazon created enormous consumer surplus.

The moral case for Mr. Bezos’ wealth doesn’t require blind admiration of his business acumen. It requires arithmetic. If Amazon saves each customer 22 hours a year, Mr. Bezos’s fortune passes the Nordhaus test. If it saves more than that, society receives far more than he keeps.

It is easy to resent the billionaire. It is easy to ignore the saved hours. But the hours matter because time is limited. It is our most precious resource. Count the time saved, and Mr. Bezos’ fortune becomes less mysterious and much more defensible.

My Mercatus Center colleague Jack Salmon busts the myth – one that’s especially prominent on the progressive left – that America’s middle class was built by high taxes. A slice:

Taxes on the rich were notably higher in the past than they are today, but the government was also a lot less involved in transferring funds to transport, education, and health care among other income support and transfer programs. Perhaps most importantly, American families today enjoy substantially higher living standards than families did during the era of confiscatory marginal tax rates.

Even if, contrary to fact, trade deficits necessarily need to be ‘fixed,’ tariffs are a poor tool for doing so. (HT Scott Lincicome)

GMU Econ alum Dominic Pino talks with James Hohmann and Jason Willick about “why data centers don’t deserve so much hate.”

National Review‘s Charles Cooke is having none of the progressive left’s ‘reasons’ for ‘reforming’ the U.S. Supreme Court. A slice:

Last week, Representative Jamie Raskin explained earnestly in Congress that the Supreme Court must be expanded to 13 justices because “there are 13 federal circuits in America, and traditionally, the Supreme Court has been made up of the number of justices equal to the number of circuits, and we got 13 circuits, but we only have nine justices, so that means that under the best of circumstances, for entire federal regions, four federal circuits will be left out completely.” Which sounds like a problem that ought to be fixed pronto until one recognizes that Raskin’s heartwarming concern for the “four federal circuits” that are “left out completely” is wholly subordinate to his desire to pack the Supreme Court with his friends. If, tomorrow, President Trump were to announce that he, too, is deeply concerned about the four orphaned federal circuits and that, to right this terrible wrong, he intends to add four justices to the existing nine, I daresay that we would not count Representative Raskin among the eager “ayes” in the House.

Later in his diatribe, Raskin was more candid about his motivations. “The Supreme Court,” he lamented, “has been a profoundly conservative, reactionary institution for the vast majority of our history.” Alas, this isn’t quite true. But it damn well ought to be, oughtn’t it? The act of writing down a set of laws is, in and of itself, a conservative act. Constitutions, like the statutes that exist under them, are bodies of law that remain operative until such time as they are formally changed. Courts are merely the institutions that have been charged with enforcing those laws. A “progressive court” is thus a preposterous oxymoron — especially, as in Raskin’s case, when the thing that one hopes to “progress” away from is the integrity of written law itself.

Howard Husock reveals the high costs of artificially low rents.

My intrepid Mercatus Center colleague, Veronique de Rugy, talks with Matt Mayer about waste, fraud, and abuse.

John Stossel is correct: “250 years later, Benjamin Franklin’s warning is still relevant.”