URLs du Jour


  • Kevin D. Williamson (in an NRPLUS article, I don't know what that means) writes on Marco Rubio & “Common-Good Capitalism”: Government Hubris Will Backfire. Long, with interesting insights into the nature of successful businesses, but …

    Good government — including a steady, stable, predictable policy environment — multiplies the value of labor, just as training and capital do. That is why investment capital around the world for years has flowed largely to well-governed countries, most of them liberal democracies, with the largest recipients of foreign direct investment being the United States and the European Union. (China, the important exception to that rule, is not well-governed; it is governed brutally but predictably, an ugly but useful reminder that stability has economic value, too.) There are many places that businesses could go in search of low wages and a loose regulatory environment, but you aren’t driving a car made in Haiti or using a computer built in Burundi. Investors aren’t putting a lot of money into factories in Yemen or Afghanistan.

    And that is what is so irritating about Senator Rubio’s new push for “industrial policy.” Is the U.S. government really performing its core duties so well, so ably, so competently that we need to add to them with additional duties that demand a kind of competence it does not have and cannot acquire?

    The truth is something closer to the opposite: The U.S. government is in many cases a force for instability and non-confidence in our national economic life. Peter Navarro’s position as Trump’s China hand is as ridiculously implausible as Hunter Biden’s role on the board of Burisma, but there he is, whispering into the president’s ear. Senator Rubio is no less implausible in his belief that he has eagle eyes to detect subtle national interests in complex economic affairs of which he has no substantial first-hand knowledge. His problem isn’t stupidity — it’s hubris.

    A perennial theme, and one we'll no doubt return to again and again.

  • Huawei has been on Your Federal Government's shit list for a number of years, starting (as near as I can tell) under Obama. For a contrarian take, take a look at John Tamny at AIER, who claims The FCC’s Treatment of Huawei Is a Tremendous Embarrassment.

    Up front, these actions meant to neuter Huawei are nakedly protectionist, and speak to how far Republicans have slid as the party of “limited government.” It’s truly sad to witness.

    Republicans excuse their embarrassing behavior by claiming that “China” is “communist,” and Huawei has close ties to the communist regime. It’s a reminder that modern Republicans are either ignorant to history, willfully blind to simple economics, or both. Simply put, to visit China is to see it’s “communist” in name only. Anyone with even the slimmest memory of the 20th century knows that communism is defined by relentless misery, starvation, murder, and other horrid things. The latter doesn’t much describe modern China. It’s an economically vibrant country that’s thick with American businesses.

    Tamny considers the "national security" argument against Huawei to be a lot of scarifying, in cronyistic service to American corporations that don't like its competition. I'm not totally convinced, but it doesn't sound totally implausible.

  • Scott Sumner asks the musical question: Compared to what?. Specifically, looking at this recent chart from Our World in Data:

    Pasting Scott's comments in full:

    Notice that prior to 1980, the number of affluent people was growing rapidly, but the number of poor people was also increasing. After 1980, the number of affluent people rose even more rapidly, while poverty began declining. I was in grad school in 1980, and I don’t recall very many people expecting such a dramatic turnaround in the number of poor people. Many experts were predicting a global catastrophe, due to rapid population growth in poor countries.

    So what changed in 1980? The most likely explanation for the plunge in global poverty is the neoliberal revolution, which began around 1980. Poverty fell especially rapidly in countries that adopted market reforms, such as Chile, Bangladesh, India and China. Ironically, the media is now full of stories claiming that neoliberalism has failed. My response is simple—compared to what?

    Neoliberalism didn't fail; we failed it.

  • Hey, good news, Brits! Looks like Brexit will happen, and it can't happen too soon. Matt Ridley notes: The EU’s absurd risk aversion stifles new ideas.

    Last month, at the WTO meeting in Geneva, India joined a list of countries including Canada, Australia, Argentina, Brazil and Malaysia that have lodged formal complaints against the EU over barriers to agricultural imports. Not only does the EU raise hefty tariffs against crops such as rice and oranges to protect subsidised European farmers; it also uses health and safety rules to block imports. The irony is that these are often dressed up as precautionary measures against health and environmental threats, when in fact they are sometimes preventing Europeans from gaining health and environmental benefits.

    The WTO complaints accuse the EU of “unnecessarily and inappropriately” restricting trade through regulatory barriers on pesticide residues that violate international scientific standards and the “principle of evidence”. Worse, they say, “it appears that the EU is unilaterally attempting to impose its own domestic regulatory approach on to its trading partners”, disproportionately harming farmers in the developing nations whose livelihoods depend on agriculture.

    The problem is that the EU, unlike the rest of the world, bases its regulations on “hazard”, the possibility that a chemical could conceivably cause, say, cancer, even if only at impossibly high doses. WTO rules by contrast require a full “risk” analysis that takes into account likely exposure. Coffee, apples, pears, lettuce, bread and many other common foods that are part of a healthy diet contain entirely natural molecules that at high enough doses would be carcinogenic. Alcohol, for instance, is a known carcinogen at very high doses, though perfectly safe in moderation. The absurdity of the EU approach can be seen in the fact that if wine were sprayed on vineyards as a pesticide, it would have to be banned under a hazard-based approach.

    I imagine the EU regs claimed to be based on "science".

  • Want to get depressed? Nick Gillespie at Reason notes that Even in Impeachment-Crazed D.C., It’s Always a Good Time To Borrow and Spend!

    The House of Representatives, controlled by the Democrats, just passed a "progressive" defense spending bill that totals $738 billion, or "$120 billion more than what President Obama left us with," in the words of Rep. Ro Khanna (D–Calif.). Is America under $120 billion more military threats since January 2017? Of course not, but why live in reality when make-believe is so much more fun? The bill is considered progressive only because it includes "paid parental leave for federal workers," a long-sought goal of liberal Democrats and, not unimportantly, President Trump, who is urging "don't delay this anymore! I will sign this historic defense legislation immediately!" Next week, the Republican-controlled Senate is expected to pass similar legislation that includes the family leave plan along with money to establish Trump's new Space Force and "the largest pay increase for uniformed service members in 10 years."

    [… damning table elided …]

    So, despite impeachment proceedings and other disagreements, Congress and the president are pulling in the same direction and digging deep into the pockets and couch cushions of current and future taxpayers. Such bipartisanship doesn't come cheap, of course. The deficit for fiscal 2019, which ended in September, was $984 billion. Total outlays clocked in at $4.447 trillion, with revenues reaching $3.462 trillion, both record amounts. For the first two months of fiscal 2020, deficits came in at $342 billion, a 12 percent increase over the same period in a previous year despite revenues climbing by 3 percent. Like GM before it was bailed out, America is losing money despite bringing in more cash than ever before.

    "Sorry, kids. I tried." "OK, Boomer."