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Thomas Firey

Articles by Thomas Firey

Will Invoking the DPA Yield More Ventilators?

April 8, 2020

Last Friday, President Trump invoked the Defense Production Act (DPA) to order General Motors to produce ventilators for the coming demand shock from COVID 19, the illness caused by the coronavirus. The move follows calls by several politicians and talking heads for the president to use the DPA to increase supplies of ventilators, protective masks, test swabs, and other medical supplies.
Peter Navarro, who helps run the Trump administration’s protectionist trade policies, is now also overseeing “its wartime powers forcing private businesses into the fight against the coronavirus pandemic,” according to the Wall Street Journal. Reports the WSJ:

“Over the last several days, we ran into roadblocks with GM,” Mr. Navarro added. “We cannot afford to lose a single day,

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Trump, Behavioral Economics, and Public Choice

January 27, 2020

As President Trump’s impeachment trial plays out in the U.S. Senate, it’s striking that such a grave situation has resulted from such a trivial cause. By that I don’t mean the allegations against him are trivial, but rather that the gains he allegedly sought from Ukrainian President Volodymyr Zelensky seem meager when compared to the legal and reputational risks he and several of his adjutants appear to have taken.
A Ukrainian announcement of an investigation into dubious conspiracy theories involving the president’s political opponents was unlikely to deliver Trump much political benefit. However, the costs of pursuing that benefit are proving to be steep: history will record him as the third U.S. president to be impeached, the congressional proceedings and other

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The Trump Regulatory Record

January 17, 2020

Before Thanksgiving, a business reporter contacted me for an article he was writing on discussion points for families that wanted to talk politics around the holiday table. He asked me specifically to write up some thoughts about the Trump administration’s regulatory policies, and I did. He ended up not using them, even though I thought they were pretty provocative; in essence, I argued the Trump regulatory record was much less significant than what both the administration’s supporters and critics claim.
I thought they’d make for some good EconLog discussion, so I’m sharing them here:

As a policy analyst, I judge regulations on the question of whether they improve human welfare on net, compared to alternatives. This can lead me to applaud some regulations,

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Defending Some of Stephen Moore’s Ideas (Sort of)

December 30, 2019

Earlier this year, when the Trump administration floated Stephen Moore’s name as an appointee to the Federal Reserve Board, a one-liner came to mind: “Someone must have told him there’d be no math.” Moore is infamous for math errors.
Other reactions were less light-hearted. My Cato colleague George Selgin tweeted, “I don’t believe that [he] is qualified to serve on the Fed” and wrote an extensive criticism of one of Moore’s prominent claims about Fed policy. Bruce Bartlett tweeted that Moore “knows absolutely nothing about the Federal Reserve or monetary policy.” Harvard economics professor Greg Mankiw blogged that Moore “does not have the intellectual gravitas for this important job.”
Moore ultimately did not get a formal nomination, and rightly so: Selgin,

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Midnight Foreign Policy?

October 25, 2019

In regulatory policy analysis, there is a phenomenon known as “midnight regulation”: a departing presidential administration will rush through regulatory changes before a new administration with a different agenda takes office. Perhaps the most famous example of this was in the final weeks of Jimmy Carter’s administration, before Ronald Reagan entered the White House.
The “midnight” period is usually defined as the final three months of a presidency, basically between election day and inauguration day. But a lame-duck administration cannot simply turn on the regulatory spigot after losing on election night. The rule-making process usually takes years to complete, and even proposed changes that are “in the pipeline” need months of lead-time to be accelerated to

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A Trade “Level Playing Field” Isn’t So Great

September 30, 2019

China’s tariffs on imports are more than double the United States’ (calculated on a weighted-average basis). Critics of open trade cite this disparity and similar ones with other nations to justify America’s current trade wars. America should have a level playing field, they say.
By this, they seem to mean that the U.S. government should apply the same tariffs to other countries’ imports that those countries apply to U.S. exports. But a level playing field can be very, very bad because the gain to domestic producers from raising tariffs is more than offset by the loss to domestic consumers.
To better understand this, we need to think about supply and demand curves. If you took Econ 101, you likely remember the graph showing how a transaction tax reduces both

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Free to Trade with China (and Anyone Else): A Response to Michael Brendan Dougherty

September 20, 2019

What about China?
That’s the surprising objection I’ve received to my “Departing the Shining City,” which ran on The Bulwark over Labor Day weekend. My essay looks back on Michael Anton’s “The Flight 93 Election” and disputes his objections to immigration (broadly, not just “illegal immigration”) and trade (again broadly, not just “unfair trade”), as well as his rejection of Goldwater–Reagan conservatism.
I expected to get some criticisms for the essay, but I’m surprised that one I’ve received is a very narrow objection to trade with one particular nation: What about China?
For instance, National Review’s Michael Brendan Dougherty makes this objection using two intertwined arguments:
China’s industrial policies give its producers advantages that aren’t what’s

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Yield Curve Inversion: Are Investors Really “Fleeing to Safety” from a Looming Recession?

August 15, 2019

The media and economics talking heads are worrying about the current inversion of the yield curve, the graph of market-set rates of return on U.S. government securities of increasing lengths. Inversion is often interpreted as a sign that the stock market is expecting a recession—though, as Paul Samuelson quipped, the stock market has accurately predicted nine of the last five recessions.
Usually, the yield curve slopes upward, reflecting investors’ demand for better rates of return in exchange for tying up their money for more time. The commonly told story is that an inversion, where yields are higher for shorter-term securities than longer-term securities, shows that investors are “fleeing to safety,” moving their money from stocks and other risky investments to

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Crowdsourcing: Help Me Fine-Tune My “Perfect Trade Surplus” Offer

May 31, 2019

Having read numerous endorsements of President Trump’s current trade war with China, I’m considering offering these folks a deal: the opportunity to run a perfect trade surplus against me. I’d offer this in the spirit of Julian Simon’s wager with Paul Ehrlich, albeit much more smart-alecky. (Hey, I gotta be me.)
I’m asking Econloggers to help me fine-tune this offer. Here’s what I have so far:
I want to offer the deal of a lifetime to President Trump, his supporters, and all others who believe the U.S. trade imbalance with China is unfair to America: run a perfect trade surplus with me!
To seize this opportunity, compile a list of all your property that you think I’d want: real estate, vehicles, financial assets, jewelry, furniture, appliances and electronics, and

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No, Krueger Didn’t ‘Prov[e] that Raising the Minimum Wage Doesn’t Increase Unemployment’

April 23, 2019

News of Princeton economist Alan Krueger’s recent death prompted well-deserved tributes and reflections on him and his academic and public policy work. (David Henderson offers some kind words here.) The eulogies underscore Krueger’s sharp and inquisitive mind as well as his reputation for integrity, careful scholarship, and concern for his fellow man.
However, some of the tributes go a bit too far when they claim that among his accomplishments was “proving that raising the minimum wage doesn’t increase unemployment,” to borrow from Bill Clinton. Barack Obama wrote something similar in a lengthy tribute. (In 1994–1995 Krueger was chief economist at the Labor Department under Clinton; in 2009–2010 he was assistant treasury secretary for economic policy under Obama

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WaPo Embraces its Inner Malthus

April 11, 2019

Washington Post political reporter Colby Itkowitz writes:
During floor debate ahead of a vote on the Green New Deal, Sen. Mike Lee (R-Utah) told his colleagues that if they really want to address environmental concerns they’ll encourage people to couple off and have more babies. … This recommendation, to add more people to the planet, doesn’t track with science or reason. A 2017 research article determined that one way an individual could contribute to eliminating greenhouse gases is to have one fewer child.
That’s the nut from her snide web article, “Sen. Mike Lee Says We Can Solve Climate Change with More Babies. Science Says Otherwise.” Post national correspondent James Hohmann deemed the article noteworthy enough to be the “Hot [Read] on the Left” in his “Daily

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Is Capital Morally Superior to Labor?

November 29, 2018

Washington Post writers Chris Ingraham and James Hohmann each offered laments this week for General Motors’ announcement that it will idle several North American sedan-manufacturing plants, laying off thousands of workers. GM’s move is part of a shakeup in its offerings, as consumer demand shifts from sedans to more versatile SUVs, crossovers, and light trucks.
But Ingraham and Hohmann aren’t simply concerned about the job losses or the specific harms that accompany generally beneficial “creative destruction.” Rather, they write that the move is “another victory for capitalism over labor” (to borrow from Ingraham’s title) and a demonstration of “a crisis of confidence in American capitalism” (to borrow from Hohmann’s).
Writes Ingraham:
General Motors on Monday

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Will Trump Join the “Fight for $15?”

November 12, 2018

Despite the post-election spin, last Tuesday’s ballot results were very bad for President Trump. Not only did Republicans lose control of the House, but several governorships, too. Further down the ballot, Democrats picked up state attorneys general and hundreds of state legislative seats.
Even the GOP’s lone headline achievement, increasing its majority in the Senate, should disappoint the White House. Of the 35 Senate seats at stake, 24 were held by Democrats and two more by allied independents. That means Republicans had many more opportunities to gain in the Senate than their Democratic rivals, and many fewer opportunities to lose. Netting a couple of seats and registering shoestring victories in several Senate races in GOP-friendly territory during an economic

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