Friday , September 21 2018
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Cafe Hayek

Bonus Quotation of the Day…

… is from page 3 of Charles Schultze’s Fall 1983 Brookings Review article, “Industrial Policy: A Dissent“: [R]eality does not square with any of the four premises on which the advocates of industrial policy rest their case. America is not de-industrializing. Japan does not owe its industrial success to its industrial policy. Government is not able to devise a “winning” industrial structure. Finally, it is not possible in the American political system to pick and choose among individual...

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Some Links

An ideal U.S.-U.K. free-trade agreement. (HT Iain Murray) I disagree with several specific points made here by Irwin Stelzer, but I agree with him that it’s foolish for anyone to fall for the line that Trump is really angling for a world of vastly lower tariffs. A slice: Finally, there is the not-small matter of the president’s irremediable ignorance of economic affairs, combined with his tendency to confuse wish with reality. When Apple CEO Tim Cook complained that tariffs would drive...

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Yet Another in My Long Series of Open Letters to Wilbur Ross

Mr. Wilbur RossSecretary of CommerceWashington, DC Mr. Ross: Yesterday on CNBC you repeated your absurd claim that the harm that Americans suffer from tariffs is irrelevant. “Because it’s spread over thousands and thousands of products,” you assert, “nobody’s going to actually notice it at the end of the day.” Forget that many of the resulting price hikes are indeed significant, such as the 16 percent rise in the price of washing machines. Instead, recognize that spreading costs so...

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Sub-optimal Optimality

For my 60th birthday last week, my son, Thomas – in addition to surprising me by driving home for the weekend – gathered into a bound volume printed copies of all of the posts that I wrote for Cafe Hayek during its first year (April 2004 through April 2005). This gift is creative, lovely, and very much appreciated. (To Thomas: Thanks again, my son!) Flipping through this volume, I stumbled upon this post from August 27th, 2004, titled “Down with Blackboard Literalism!” It deals with a...

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Quotation of the Day…

… is from Scott Sumner’s recent EconLog post “Are tariffs a big threat to China?“: When Siamese twins get into a knife fight, it’s hard to envision either side winning. DBx: Scott here refers to the reality that, over the past few decades, we Americans and the Chinese people have become more economically integrated with each other. We rely upon the Chinese for consumer goods and inputs; they rely upon us similarly. Despite all the many market distortions introduced over the years by...

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Bonus Quotation of the Day…

… is from page 345 of the 1990 Transaction Publishers reprint of W.H. Hutt‘s 1936 book, Economists and the Public: We must probably wait for a more enlightened age before we can hope for the acceptance of the proposition that in the condition of natural and uncontrived scarcities we have the only conceivable acceptable criterion of distributive justice. DBx: So true. Alas, although 82 years have passed since these above words were first published, our age is no more obviously enlightened...

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Some Links

This New York Times op-ed from last month – on trade with China – is well-described by its author’s last name. (I thank my Mercatus Center colleague Christine MacDaniel for reminding me of it.) A slice: First, about 60 percent of China’s exports to the United States are produced at factories owned by non-Chinese companies. Many of them produce customized inputs for American manufacturers, such as computer routers, LED fixtures and boat motors. That means the tariffs imposed by the Trump...

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Rival Gang Violence Against Peaceful Traders

Here’s a follow-up letter to Larry Clark: Mr. Clark: Thanks for your response to my earlier letter. You’re correct to note that there’s a genuine difference between the case of our neighbors abroad being forcibly obstructed by their governments from trading with us, and our neighbors next door voluntarily choosing not to trade with us. But you leap too hastily to the conclusion that, therefore, Uncle Sam’s trade restrictions on Americans’ trade are justified by foreign-governments’...

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Quotation of the Day…

… is from page 6 of Deirdre McCloskey’s September 2018 manuscript “Raising Up Private Max U,” which is forthcoming in The Ethical Formation of Economists (Wilfred Dolfsma and Iona Negru, eds.): The problem is that ethics in economics has been thoughtlessly attached to Rousseau’s notion of a general will.  Deep in left-wing thought and in a good deal of right-wing thought about the economy is the premise, as Isaiah Berlin once put it, that government can accomplish whatever it rationally...

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Busting Popular Economic Myths

In my latest column for AIER, I celebrate the fact that sound economics works like acid to dissolve popular myths.  A slice: To think like a good economist is not only to be forever skeptical of popular explanations of economic phenomena, it is also to be fearless at examining reality in ways that often strike non-economists as bizarre. My favorite example of a seemingly bizarre but enormously revealing take on reality is my late colleague Gordon Tullock’s observation that if Congress...

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