Genuinely great news: Jay Bhattacharya is tapped to head the National Institutes for Health.
The Editorial Board of the Wall Street Journal isn’t impressed with Trump’s attempt to use tariffs as a bludgeon. Three slices:
Well, here we go. Donald Trump is still two months from returning to the White House, but he’s already wielding tariffs as an all-purpose bludgeon to achieve his political and foreign-policy goals. Markets will have to get used to it because this is going to be Mr. Trump’s second-term method, no matter the economic and strategic ructions.
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The tariff here is in service of Trump’s campaign promise to reduce illegal migration and fentanyl smuggling. He vows to take unilateral executive action without any explicit legal rationale. Mr. Trump is threatening the countries, including two neighbors and allies, with economic harm if they don’t help him solve a domestic U.S. problem.
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There’s also the not-so-small matter that Mr. Trump’s tariffs, if imposed, would shatter the U.S.-Mexico-Canada Agreement that he negotiated and signed in his first term. The pact’s terms say it can’t be reviewed until 2026, and then the parties have another decade to negotiate new terms or abandon it.
In 2019 Mr. Trump said the USMCA would be “the best and most important trade deal ever made by the USA.” If he blows it up based on his own short-term political needs, he’ll send a message around the world that his—and America’s—treaty word can’t be trusted. U.S. trading partners and allies everywhere will get the message, and China will be courting them with promises of a more reliable export market. Using trade to punish allies is especially short-sighted if you want their help against Chinese mercantilism.
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It’s also possible that Mr. Trump views tariffs not merely as a tool for ad hoc negotiation but as a lever to remake the entire global trading system. In that case he’ll try to build high tariff walls in an attempt to force U.S. and foreign companies to build nearly everything in America. The economic and political harm from that strategy is for another day, but investors can’t rule it out and members of Congress would be wise not to give him that power.
Also unhappy with Trump’s tariff announcement is Warren Coats.
And here’s Eric Boehm on Tariff Man’s recent announcement of economically ignorant plans to violate Tariff Man’s own USMCA. A slice:
One might object to the idea that it makes any sense at all to solve the issue of undocumented border crossings with tariffs (it doesn’t), or address the flow of illegaldrugs with taxes on legally imported goods (it really doesn’t). Even so, the most striking thing about Monday’s announcement is that Trump seemingly still does not understand it will be Americans who will foot the bill for any new tariffs.
The threatened tariffs on imports from Canada and Mexico would be a $210 billion tax increase. Imposing them would mean higher prices for many fresh fruits and vegetables currently imported from Mexico, and higher prices for crude oil imported from Canada, among other things.
Andrew Stuttaford thanks Gavin Newsom for revealing just how political is industrial policy.
George Will reflects on his half-century of writing his column for the Washington Post. Two slices:
An enchanting idea of heaven is this: endless learning. For the self-selected cohort of op-ed readers, learning is treasured as fun. Columns are properly quarantined on “opinion” pages, but a columnist’s opinions will lack momentum for respect unless they are accompanied by platoons of facts that give readers the delight of discovery: “I didn’t know that.”
It has been said that a deadline is a writer’s best friend. But if writing is a chore — a painful duty — for a columnist, he or she should find another vocation. Enjoyment is infectious, and readers will only value, over time, the company of a columnist who clearly enjoys the craft of assembling sentences, paragraphs and arguments.
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Actually, however, in the unending American dialectic between legislatures and courts — between majorities and restraints thereon — the perennial subjects of Western political argument are constantly contested: the concepts of freedom, equality, consent, representation and justice. Americans are permanently enrolled in this seminar. And being a columnist is as much fun as can be had away from a ballpark.
Jeff Jacoby exposes several myths about Social Security. A slice:
1. There is no money in the Social Security trust fund. It is true that the Social Security trustees reported holding “asset reserves” of $2.8 trillion at the end of 2023. But those assets are an illusion. Social Security doesn’t own $2.8 trillion in gold bullion or shares of stock or real estate or cash. All it has are Treasury bonds — IOUs from the federal government for money that the government has already spent. Between 1983 and 2009, the Social Security system ran surpluses, collecting $2.8 trillion more in payroll taxes than it paid out in benefits. But that money wasn’t saved. It wasn’t walled off in a lockbox to fund benefits for future retirees. It was simply added to the government’s general revenues and used for other federal programs. In other words, the government lent itself the money in exchange for a promise to pay itself back — the equivalent of writing yourself a check to deposit in your checking account. The IOUs in the trust fund are merely an accounting device, nothing more.
As the Office of Management and Budget acknowledged in a candid 2000 report, Social Security’s trust fund balances “do not consist of real economic assets that can be drawn down in the future…. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures.”
Pierre Lemieux identifies the one way to defend populism from a genuinely liberal perspective.
My Mercatus Center colleagues Liya Palagashvili and Revana Sharfuddin use new data from the U.S. Bureau of Labor Statistics to take a fresh look at the independent workforce. A slice:
Independent work can be valuable as a main source of income for retired or older workers who have moved past the “9-5” routine but remain open to transitioning to part-time or short-term flexible work. A 2020 study published in the American Economic Journal: Macroeconomics found that for many older workers, labor force participation near or after normal retirement age is limited more by a lack of acceptable job opportunities or low expectations about finding them than by unwillingness to work longer. The study found that about 60 percent of nonworking older respondents said they would be willing to return to work with a flexible schedule.
