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Here’s a letter to a Substack commenter.

Mr. Calamitous:

You’re unhappy with economists’ defense of so-called “price-gouging,” which is the practice of charging (and paying!) unusually high prices in the aftermath of natural disasters and wars. Specifically, you write:

Your example with overcharging for, say, water when there’s been an earthquake is not good for people, it’s cruel. There are times when charity and public service are the proper response, not markets. Markets are a tool we can use in some situations, not a magic wand. The lack of awareness of this is what makes libertarians seem aloof and a little ridiculous.

With respect, I disagree.

First of all, these high prices are not “overcharging.” They reflect the underlying material reality that supplies have suddenly been much-reduced while, simultaneously, demands have suddenly been much-increased. The substantial reduction in supply relative to demand is a reality that raises the market value of each unit of the good that is available. This market value is what it is; a government prohibition of “price gouging” prevents the market from accurately reporting to the world this economic truth. Outlawing “price gouging” is akin to outlawing meteorologists from accurately reporting on the formation and path of hurricanes.

Floridians and Louisianans might for the moment feel better being told that skies will be sunny and winds calm, but because such misinformation prevents them from taking appropriate measures, they’ll regret the lies fed to them when the storms strike.

And so it is with high prices. Prices kept artificially low ‘lie’ to consumers and to suppliers. Buyers fortunate to be near available supplies (or who have family or political connections with suppliers) will over-consume. Worse, suppliers will get neither the information nor incentive necessary to encourage them to take extra steps to bring more supplies into the devastated areas.

You write that such problems should instead be handled by “charity and public services.” Maybe. But the very fact that prices rise to levels that you find objectionable implies that charity and public services aren’t doing the job.

I’ve a question for you. Do you, whenever a natural disaster strikes somewhere in the continental U.S., always take several days off of your job, rent a flat-bed truck, fill it with the likes of propane, bottled water, plywood, and blankets, and then drive that truck to disaster areas and either donate these supplies or sell them at the prices you paid for them?

I’m guessing not.

Now, suppose someone offered to pay you, each time a natural disaster strikes, $5 million to take five days off of work in order for you to rush needed supplies to disaster areas. Would you take this job offer? I’m guessing so – which means that you, sir, are a price gouger. The only difference between you and the “price gougers” who you criticize is that the prices they charge to help relieve the suffering of disaster victims are lower than the prices you charge.

Now I don’t hold against you your inaction induced by the failure of buyers to meet the exorbitant prices you charge. Most people – including me – don’t do much to help rush supplies to disaster victims. But you should stop criticizing the actions of those suppliers who you and others unjustly tar as “price gougers.”

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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My intrepid Mercatus Center colleague, Veronique de Rugy, warns Californians to reject Gabriel Zucman’s – and other ‘progressives” – demand for a wealth tax. A slice:

I’ve written plenty about why wealth taxes are economically destructive, administratively nightmarish, and unlikely to achieve anything close to what their advocates promise. But Zucman’s prescription is wrong for a more fundamental reason, as his (and my) native country shows: Raising taxes to fuel ever-larger demands for government spending is a recipe for disaster.

National Review‘s Andrew Stuttaford rightly describes the wealth tax endorsed by Gabriel Zucman as “morally reprehensible” and “economically destructive.” A slice:

Unsurprisingly, Zucman is unhappy about an analysis of the tax’s likely effect by Hoover Institution economists Joshua Rauh and Benjamin Jaros. Proposition 40’s proponents claim that the tax will raise $100 billion. Rauh and Jaros argue that, far from raising that sum, such a tax would end up costing the state tens of billions of dollars. To put it simply (and before considering other negative consequences), that is because the tax would drive billionaires (and the taxes they pay) out of the state. According to the Wall Street Journal, it is already doing so:

Seven billionaires with $539.9 billion in wealth moved out of California between the initiative’s filing last autumn and the date at which residency would be determined for purposes of assessing the tax (Jan. 1, 2026), according to public reports. That means nearly 30% of Prop. 40’s estimated $1.9 trillion potential tax base has already disappeared.

This has not stopped Zucman from claiming that California’s billionaires will stay put. Included in a series of tweets he has written attacking the Hoover duo’s paper was this:

Why would billionaires permanently leave California in response to a one-time tax owed if they lived there on January 1, 2026? It would only make sense for them to leave if the tax becomes annual.

That’s (a bit) like saying that people who have already been burgled have no reason to lock the door to their homes.

Here are Arnold Kling’s thoughts on today’s rioting in France.

Also writing wisely about the rioting in France – and the cluelessness of some alleged “economists,” notably Thomas Piketty about this rioting – is Jonah Goldberg. A slice:

The most obvious answer to France’s problems is economic growth — much easier said than done, of course. The reason that’s so hard for France isn’t because the government is “unresponsive” to the people and their concerns, it’s because it’s too responsive. For decades, the French have demanded the economic policies that got them into this mess, and the government appeased them.

GMU alums Phil Magness and Dave Hebert expose the weakness of arguments for industrial policy.

This extended period of protectionist infancy suggests that the argument needs a new name. We propose the “Peter Pan industry argument” for companies that never grow up because tariffs make sure they never have to.

The question tariff advocates rarely ask is: Why do some American producers have higher costs than foreign rivals even in the face of lower-cost foreign competition? The answer comes down to specific rules and choices within particular firms and industries. Tariffs, and protectionism in general, address none of these. No industry illustrates this like steel, but it is far from the only one.

Scott Lincicome, sharing news from to an Axios report, tweets:

toldja: “the [manufacturing] recovery is being powered by industries at the forefront of the AI and energy boom while the traditional factory sector gets left behind”

The growing mfg industries are ALSO among the least tariff-protected.

The Washington Post‘s Editorial Board makes the case for letting “private capital determine how many data centers America needs.” A slice:

But the political movement to slow down or block the growth of data centers could have adverse consequences for the entire economy. By some estimates, AI-related goods accounted for as much as three-quarters of all global trade growth in the first quarter of 2026 and upward of a third of U.S. economic growth.

Financial risk does not diminish the structural utility of technological advances. Many railroads failed, but the track remained. Ditto for companies in the 1990s that laid fiber-optic cable, which continues to generate value.

If CoreWeave has borrowed too much, creditors and shareholders will bear the consequences. If Microsoft or Meta wants another gigawatt of electricity, they should pay the cost of producing and transmitting it. But neither investors nor consumers benefit when zoning boards, permitting regimes and utility bottlenecks prevent otherwise economically viable projects from being built.

David Henderson recounts a tale told by his late professor, George Hilton.

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… is from page 129 of my late, great teacher Fritz Machlup’s May 1960 Review of Economics and Statistics paper, “Another View of Cost-Push and Demand-Pull Inflation“:

It is clear that an inflation of effective demand is a necessary condition not only for a demand-pull inflation of consumer prices but also for a cost-push inflation. Without an expansion of demand the cost boost would result in less production and less employment, not in a continuing rise of the level of consumer prices.

DBx: Yes.

There are several reliable litmus tests for revealing people who, despite pronouncing on economics, do not understand the first thing about how economies actually work. One of these tests is centered on the concept of “cost-push inflation” – which is the belief that inflation can be, and sometimes is, caused by “greed” or by market power. Anyone who ‘explains’ inflation in this way is a poor economist.

…..

Pictured here is Fritz Machlup (1902-1983).

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I just discovered this insightful piece, from August 2025, by National Review‘s John Puri – a piece in which Mr. Puri identifies a deep contradiction in the positions taken by NatCons and other ‘postliberals’ on trade and foreign policy. Two slices:

It has always struck me as odd that the most thoughtful advocates of protectionism within the conservative movement also tend to be the fiercest advocates of non-interventionism. Patrick Buchanan famously embodied this synthesis for a while, and much of the New Right embodies it today, but the pairing of these ideas dates back to pre-Cold War conservatives like Robert Taft and the America Firsters.

On the face of it, protectionism and non-interventionism share a common foundational belief: America should have less to do with the world that surrounds it. But there is an inherent tension between the two.

The most intelligent protectionists do not see trade as inherently bad. Instead, they argue that the impersonal market forces that drive international trade patterns lack any regard for geopolitics. A policy of targeted protectionism via tariffs and other import restrictions, proponents argue, is needed to make the international distribution of trade and production better fit with America’s strategic interests. Critical industries can be brought home or shifted to allied nations, rather than left in the hands of adversaries. Bilateral economic relationships can be favorably rebalanced. Blocs can be formed to isolate bad actors. In short, the United States can utilize tariffs to make a dangerous world more hospitable.

This confidence in America’s ability to unilaterally rearrange the global economic order to its benefit is strange, then, coming from people who have no confidence in America’s ability to unilaterally rearrange the global security order to its benefit. Which is what foreign interventionism aims to do, relying upon a similarly blunt tool — military force — as protectionists have in tariffs.

Muscular interventionism, even when practiced by self-described conservatives, is born of a progressive ambition to remake the world. Woodrow Wilson believed that America could make the world “safe for democracy” by becoming its moral guide, turning autocratic countries into democratic ones. In the 21st century, interventionists have sought to reform the Middle East from the bottom up. It was not enough for the United States to contain, deter, and defeat its immediate enemies. “For as long as whole regions of the world simmer in resentment and tyranny,” George W. Bush proclaimed in his second inaugural address, “violence will gather, and multiply in destructive power, and cross the most defended borders, and raise a mortal threat.” Therefore, to guard itself truly, America would have to “seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world.”

The non-interventionists told the interventionists then: You are not nearly adept enough to get this right. No one is. The world, made up of hundreds of nations — each with its own relationships, internal factions, political dynamics, and distinct characteristics — is far too complex to rearrange without mucking things up. Wilson’s comprehensive effort to make the world “safe for democracy” from his perch at Versailles failed in epic fashion. The arrogant map drawers were to be humbled by the vicious revisions of Hitler’s Germany, Mussolini’s Italy, and imperial Japan.

…..

The alternative to both protectionism and interventionism is an approach more in line with a conservative sensibility. It is to preserve the global security and economic orders that already exist, which, however imperfect, benefit America immensely. That means dealing with immediate threats to the security order as they materialize, such as fending off territorial aggression in Eastern Europe — or addressing acute economic vulnerabilities, as with rare earth minerals. It does not require a wholesale reconfiguration of the balance of power to preempt all conceivable hazards.

The post-WWII international orders are “rules-based,” in that they are undergirded by broadly applicable rules, not managed from above. Within those boundaries, innumerable diffuse decisions are made by countless sovereign actors.

This is how spontaneous order — or the “ordered liberty” that conservatives cherish — is achieved, and the free trading system that America helped build is a prime example. We should not try to fiddle with it, misguidedly assuming that we could arrange it better.

This letter in the Wall Street Journal by the Cato Institute’s Colin Grabow is great:

In her column “Alaska Considers Economic Suicide” (Potomac Watch, Oct. 16), Kimberley A. Strassel faults Democratic candidate Mary Peltola’s economic record but doesn’t discuss a policy position that disproportionately harms Alaska: Ms. Peltola’s support for the Jones Act. Addressing Alaska’s Legislature in February 2024, Ms. Peltola acknowledged that the law, which restricts domestic water transport to U.S.-built and flagged vessels, “creates extra challenges” for the state, yet said she backs it “because I support union workers.” Evidently, she weighs those union workers’ interests above Alaskans’ costs.

Unfortunately, Sen. Dan Sullivan, the alternative, is no better on this particular policy. In 2019 he joined five other senators at the White House to urge President Trump not to issue a Jones Act waiver for domestic liquefied natural gas shipments.

My intrepid Mercatus Center colleague, Veronique de Rugy, has some issues with United Airlines’s CEO Scott Kirby’s ignorant, arrogant pronouncements about economic policy. A slice:

Now United’s CEO, Scott Kirby, is in the news saying things I don’t like either. When the New York Times asked him this past weekend about the public’s falling trust in CEOs, he didn’t talk about running a better airline. He said instead that society is threatened by wealth inequality. He wants a national wealth tax, because a state version “won’t work” when “people will just move.” Because such soaking the rich apparently isn’t enough, Kirby also wants inheritance taxes “close to 100 percent at some level.”

In a recent post, [Gary] Leff gives some perspective on Kirby:

“I’ve compared Kirby to Captain Renault in Casablanca before. Under Biden, United leaned into diversity programs and pronouns, climate commitments, affirmative action and vaccine mandates. Under Trump, Kirby became a defender of the President’s tariff strategy and intentions. Now, speaking to the Times, he’s offering wealth redistribution. As Renault offered to Germany’s Major Strasser, ‘I have no conviction, if that’s what you mean. I blow with the wind, and the prevailing wind happens to be from Vichy.’”

Over at Fiscal Reality Check, Stanford’s Joshua Rauh offers several theories he had heard for why a man who sells a product built on charging more for a better seat would say such things. The one that stuck out to me is that Kirby may be pandering to the kind of government he expects to fund United’s next bailout. Once your business model includes a government rescue, keeping the rescuers happy becomes part of your job.

Also critical of Scott Kirby’s proclamations about matters other than those having to do with running an airline is the Editorial Board of the Wall Street Journal. A slice:

Mr. Kirby defended his company’s use of price differentiation in an interview this week with the New York Times. “The way to give everyone what they want is to charge for the services and products that those customers want,” he said. Fair enough.

Even if the extra charges are annoying, they effectively result in relatively more affluent and less price-sensitive customers subsidizing travel for everyone else. Without the add-ons, base fares would be higher. Some people simply wouldn’t be able to afford to take their family on vacation. The CEO seems to understand that letting markets determine prices is the best way to maximize public welfare.

But then he took a regrettable flight of left-wing fancy. Asked whether he has a responsibility for dispelling public distrust in CEOs, he replied: “Wealth inequality has become a danger to our society, and we need to address that.” By we, he means government.

He added: “We should have a national wealth tax—it won’t work by state because people will just move. And I think we should have inheritance taxes that get close to 100% at some level. I would pay them.” Well, no he wouldn’t. Inheritance taxes are levied on inheritors, so his kids or other heirs would pay the bill.

Or they might not, since death and inheritance taxes encourage tax avoidance. The same is true of wealth taxes. Washington state this year reversed its increase in its top marginal estate tax rate to 35% from 20% for this reason. United has its headquarters in Chicago, but Mr. Kirby lives in Texas, which has no state income tax. Does he pay income tax in Illinois?

There’s also nothing to stop Mr. Kirby from bequeathing his fortune, or donating his $32.3 million in compensation last year, to the feds. Even better, how about offering more leg room in all rows and eliminating middle seats as a gesture to the hoi polloi? We suspect he’d say that none of these suggestions would reduce inequality or the national debt. But the same goes for a wealth tax, which punishes successful entrepreneurs.

This isn’t Mr. Kirby’s first ride on the left-wing jet stream. During Woke 1.0, Mr. Kirby declared that two things “where we want to lead and make a difference” are “diversity and inclusion, and climate change.” Customer service apparently takes a back seat to reducing CO2 emissions.

George Will writes about “the cascading absurdities of a downward-spiraling presidency.” A slice:

Trump, however, is thinking about something more important to him than Europe’s largest war since the one that Munich presaged. He is after votes for Republicans, so he wants to shred another law, the one against buying energy from Russia.

He wants to buy diesel, which he weirdly thinks will arrive in time to lower the prices that have furious farmers blaming the Iran war for making it excruciating to fuel their combines. And long-haul truckers are incandescent about $1,000 fill-ups.

Iowa Republican Sen. Chuck Grassley, 93, who has seen much but not learned enough in his 51 years on Capitol Hill, wants Trump to ban diesel exports. He approvingly cites President Richard M. Nixon’s 1973 ban of soybean exports. Herewith another tutorial about the Law of Unintended Consequences, which is: The unintended consequences of 10-thumbed government interventions in social complexities are often larger than, and contrary to, the intended ones.

The Financial Times’s Gillian Tett says Nixon’s measure did briefly suppress domestic soybean prices. But (per a University of Illinois scholar’s report) it also infuriated some U.S. customers. In 1974, Japan began investing heavily in Brazil’s soybean potential. By 2015, Brazil exported more soybeans than did U.S. farmers. In 2025, Brazilian soybean sales were almost double U.S. sales.

Dean Ball tweets: (HT Scott Lincicome)

American chattering classes love to hate our country’s financial services sector, but mark my words: the depth and versatility of U.S. capital markets will be our mightiest weapon in the singularity. Anti-finance sentiment, still fashionable on both left and right, is low IQ.

GMU Econ alum Daniel Smith is correct: Today, “the road to serfdom runs through both parties.”

Casey Mulligan explains that “you pay when your state taxes hospitals.” A slice:

Medicaid’s financing gimmicks have raised costs for Americans with private health insurance. A new Department of Health and Human Services study estimates that between 2003 and 2019 state provider taxes, which at adoption ran up to 3.5% of hospitals’ net patient revenue, raised premiums for employer-sponsored single coverage by 1.5% to 1.7%.

Provider taxes are supposed to finance the nonfederal share of Medicaid payments. States obtain federal matching funds based on those proceeds, then return money to providers through supplemental payments. Hospitals can receive more than they paid in taxes, while states draw additional money from Washington. Little wonder that hospitals sometimes lobby to be taxed.

A common defense of this system is that additional Medicaid money enables hospitals to charge privately insured patients less. But medicine isn’t an accounting exercise with a set revenue requirement. It’s a service supplied by people who respond to compensation. Nurses, physicians and resources don’t become more abundant merely because Washington contributes more dollars.

An HHS report released in August quantified how medical markets respond to taxes, prices and payment incentives. A hospital tax raises the cost of serving an additional commercially insured patient, while higher Medicaid payments increase the return on resources used for Medicaid services, making them more expensive for other purchasers. Together, these forces drive a 1.4% change in non-Medicaid provider prices for each percentage-point change in the provider tax rate.

In our new study, my colleagues and I examined private-employer survey data and compared states that adopted hospital taxes with those that didn’t. Our estimated 1.5% to 1.7% increase in single-coverage premiums accounts for national trends and differences in state unemployment.

Reason‘s Billy Binion ponders Trump’s obsession with renaming things.

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… is from page 2 of my former teacher – and newly elected president of the Mont Pelerin Society – Randy Holcombe’s superb 1985 book, An Economic Analysis of Democracy:

Democracy in America, originally established as a means to limit the power of government, has evolved into an end in itself. Rather than being viewed as a tool for safeguarding the rights of its citizens, democracy has become a mechanism for furthering the will of the majority.

DBx: Yes, unfortunately.

Too many people believe that, as long as there are regular and fair elections, the rights of individuals in electoral minorities cannot be violated. This belief is not one that was held by America’s founders. Even more importantly, this belief is one that does not take rights seriously.

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I don’t think that Julius Krein realizes just how thoroughly he was bested by Phil Magness in this debate.

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Here’s a letter to a long-time correspondent.

Mr. Estes:

Thanks for your email in response to my blog post this morning on tariffs.

You’re skeptical of my claim that commerce among people with different national residences differs in no economically relevant way from commerce among people with different eye colors. You write that you “cannot imagine what the group ‘hazel-eyed people’ might be thought to do to hurt blue and brown-eyed people economically.”

Your point is fair, so let me use a different example – namely, trade among Americans of different ages. As a group, Americans between the ages of 35 and 64 are generally net savers, while younger Americans save much less and retired Americans typically draw more heavily on previously accumulated savings. Yet members of each age group freely trade with members of all other age groups. Indeed, insofar as younger and older Americans spend more than they currently earn, financing the difference with savings accumulated by middle-aged Americans, the former can be said to run “trade deficits” with the latter, who run corresponding “trade surpluses.”

But obviously, these differences in saving and spending patterns are not evidence that one age group economically exploits another. Yet the same logic that prompts Pres. Trump and other protectionists to impose tariffs on imports because America consistently runs international trade deficits should – were this logic economically sound – prompt these protectionists to endorse protective tariffs on goods and services offered for sale by middle-aged Americans to younger and older Americans.

Of course, not even Mr. Trump would favor such tariffs. But he could not consistently defend protective tariffs on trade between Americans and foreigners while rejecting similar tariffs on trade between Americans of different ages.

Sincerely,
Don

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Here’s a letter to a new correspondent.

Mr. Burr:

Thanks for your email. You write:

I am not an economist.  It seems intuitive that tariffs would raise taxes.  Simply stated, tariffs limit competition.  Limited competition leads to higher prices.  However, the real world is complicated.  Is there ever a situation that you could foresee where you could support a tariff?

Yes. Tariffs might sometimes be appropriate for military purposes (although recognize that it’s far too tempting and easy to abuse this ‘national security’ exception to the case for free trade). But apart from a well-justified and crafted national-security tariff, I cannot imagine supporting any other tariffs.

As a source of revenue, tariffs are poor. See this explanation by Brian Albrecht.

As a source of economic ‘protection’ – which, overwhelmingly, is the chief reason tariffs are imposed and tolerated – tariffs are voodoo. While clever sophomores and pedantic professors, along with industry lobbyists, tirelessly tell tales of how, under just the right circumstances, restricting Americans’ access to goods and services from abroad will result in Americans having greater access to goods and services at home, these tales are nearly all internally contradictory, and absolutely all are empirically empty.

You are, of course, correct that the real world is complicated. But as Richard Epstein makes clear, the best rules for dealing with complex realities are typically simple ones. The complexity of the real world no more justifies giving government the power to superintend how we spend our incomes peacefully on goods that happen to be offered for sale by people holding foreign passports than it justifies giving government the power to superintend how we spend our incomes peacefully on goods that happen to be offered for sale by fellow citizens who have hazel eyes or are left-handed – even though it would be child’s play for an economist to construct a theory showing that, under just the right circumstances, we would be generally enriched if government restricted our freedom to trade with hazel-eyed or left-handed fellow citizens.

Indeed, the complexity of the economy is a reason to avoid tariffs. You show me a protectionist, and I’ll show you someone who ignores reality’s complexities. That someone naively believes that government officials can and will easily identify just which industries are ‘the industries of the future’ and just which jobs are best to protect and which are acceptable to destroy. The typical protectionist simple-mindedly sees only the most obvious effects of tariffs – protecting particular existing domestic industries and jobs – while overlooking follow-on effects, including the destruction of other domestic industries and jobs. The protectionist mindset ignores reality’s complexities, while that of the free trader appreciates these complexities and takes them fully into account.

Legitimate national-security concerns aside, the case for protectionism is rooted in the superstition that commerce that crosses political borders differs categorically from commerce that remains internal to political borders. Reality’s complexities do nothing to render this superstition anything other than the absurdity that it is.

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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Ilya Somin, a GMU colleague over in the Scalia School of Law, explains that Trump’s Section 338 tariffs punitive taxes on Americans’ purchases of imports “are illegal for multiple different reasons.” A slice:

I have previously written about why Trump’s Section 338 tariffs are harmful and illegal. See my recent Montreal Economic Institute paper on this topic, and earlier pieces here, here, and here. To briefly summarize, the tariffs on Canada are illegal because 1) Section 338 has been superseded by later legislation, 2) even if Section 338 is still operative, Trump’s tariffs do not meet its requirements because the Canadian actions they supposedly respond to do not “discriminate” against US goods, as the law requires, 3) Trump’s tariffs do not “offset” the Canadian actions (as Section 338 also requires), but go far beyond that, 4) the administration’s interpretation of Section 338 runs afoul of the “major questions” doctrine, and 5) if Section 338 is operative and does authorize the Trump actions, it would violate the constitutional nondelegation doctrine (which restricts delegation of legislative power to the executive).

Also writing about Trump’s latest illegal punitive taxes on Americans’ purchases of imports is Jacob Sullum.

Jordan McGillis reports evidence that ordinary Americans are unhappy about Trump’s punitive taxes – a.k.a. tariffs – on their purchases of imports. A slice:

Most damningly, blue-collar workers—tariffs’ notional beneficiaries—have soured. Last year they favored Mr. Trump’s tariffs by a margin of 3 percentage points. They have swung 25 points toward the Democrats. Fifty-eight percent of blue-collar workers oppose Mr. Trump’s tariffs, while only 36% support them. Only 20% of blue-collar workers say tariffs have helped their jobs specifically, compared with 38% who say tariffs have hurt their jobs.

A majority of workers in our survey say tariffs have harmed access to the goods and services Americans need. When asked last August which party had the better approach to trade, workers preferred Republicans by 5 percentage points. Now they favor Democrats by 12.

Michael Strain offers his evidence that Trump has failed to address voters’ concerns about inflation.

Scott Lincicome reminds us that, back in March of this year, Trump chief trade-voodoo doctor – Peter Navarro – wrote in the Wall Street Journal that the war in Iran will lower energy prices.

“Full ‘reshoring’ of tech product manufacturing would come at a cost.”

Leonidas Zelmanovitz is a fan of Samuel Gregg’s new book, The Civilization of Commerce. A slice:

I read Gregg’s contribution as a continuation of the effort to renew liberalism associated with the Walter Lippmann Colloquium of 1938 and the creation of the Mont Pelerin Society in 1947. That project challenged liberal-minded intellectuals to find arguments that could win back hearts and minds lost through war, the Depression, and the apparent exhaustion of older liberal prescriptions. Hayek’s choice to investigate the foundations of a free society was part of this undertaking. Gregg renews it by linking the market economy to Western civilization’s future, a concern already expressed in the Society’s founding statement of aims.

The contrast with the more practical approach associated with Milton Friedman in the 1960s clarifies Gregg’s choice. Policy prescriptions have their place, but the book returns to Hayek’s broader concern with the philosophical basis of freedom. Hayek and Keynes also shared a sense of what the prewar world had lost. Their disagreement over how to respond makes the question of intellectual foundations especially important: concern for civilization alone does not determine which economic institutions will preserve it.

Understood in this sense, the new liberalism was an intellectual effort to strengthen the defense of liberty. Gregg’s narrative carries that effort forward. His account of liberalism’s relative recovery from the 1980s into the early 2010s can be read against the backdrop of this sustained work. The book also helps explain why a market economy’s achievements do not settle the argument in its favor. Its defenders must continually address competing understandings of human flourishing and the institutional conditions that support it.

Ramesh Ponnuru busts myths – ones spread today chiefly by campaigning Democrats – about data centers. A slice:

It’s a hard-hitting campaign against a nonexistent menace.

The flimsy basis for these attacks is a Republican-backed federal law that contained a grand total of zero dollars in tax breaks for data centers. That 2025 law, embarrassingly titled the “One Big Beautiful Bill,” is a fair target. It recklessly cut taxes without making equal reductions in spending, and it included multiple giveaways with no real justification beyond buying votes. Instead of going after those more obvious flaws, Democrats are distorting one of the law’s best provisions.

Rather than require businesses to write off the cost of investments over many years, the law moves toward “full expensing” — that is, letting companies deduct some expenses as soon as they arise. Under either policy, businesses write off the full dollar amount of an investment. A write-off in later years, however, has lower value: Money today is worth more than money tomorrow, which is why lenders charge interest.

Faster expensing increases a company’s incentive to invest — or, more precisely, reduces an arbitrary penalty on investing. The effect on government is that tax revenues fall in the short run but mostly recover in the long run.

The attacks on these Republicans are false for at least three reasons. First, the so-called tax breaks “for data centers” aren’t for data centers. They apply to a large class of investments. Equipment purchases for data centers don’t receive any greater benefit than equipment purchases for any other investment. Nor does expensing apply to building the structures that house data centers. The provision isn’t a special favor for the industry. It has applied to many billions in data-center equipment purchases because data centers happen to be booming, not because the federal government has put a thumb on the scale for them.

Second, the estimates for the size of the alleged tax break ignore that the policy question mostly concerns when, not whether, taxes are paid. To a large degree, expensing simply moves a tax deduction forward in time rather than enlarging it. Counting the up-front revenue hit but not the later revenue boost overstates the benefit for companies and the cost to governments.

Third, the tax breaks aren’t even tax breaks. Many tax experts support full expensing because, unlike the alternative, it doesn’t penalize investment. The partial expensing policy included in the Republican law is a step toward a tax code that raises revenue while minimizing distortions to the economy. Tax breaks, on the other hand, are departures from that ideal, designed to boost some activities, or the groups that engage in them, over others.

“Farmers need free markets, not free money” – so argues the Washington Post‘s Editorial Board. A slice:

Farmers face real hardships. Diesel prices per gallon have risen about 75 percent and trade disruptions from the Iran war have boosted fertilizer prices. Pointless trade wars and tariffs have reduced foreign markets where American farmers can sell their crops and have raised prices for equipment. Ranchers have also voiced frustration at the chilling effect immigration raids have had on the meatpacking workforce.

Instead of rolling back those disruptive policies, the president is dangling money. “When the Republicans win, we will pass even more funding for our farmers,” Trump said in Kansas. This is akin to the $5,000 checks he’s promising Americans if Republicans hold the House and Senate.

Once government starts compensating industries whenever inputs become unexpectedly expensive, there is no principled stopping point. Why should a farmer’s increased diesel bill be reimbursed when a trucking company’s is not?