Dishonest Crank Now Heads Trump's OMB

Trump has saddled America with another charlatan in an important post.

Economist Tara Jirari raises the alarm over the new Chief Economist at the Office of Management and Budget because he once headed the Coalition for a Prosperous America (CPA), which not only supports tariffs, but notably used dishonest arguments to do so.

Jirari supports her charge by citing an analysis by Joseph Francois of the World Trade Institute and Robert Koopman of American University.

They note among other things that the CPA's claims "rest on assumptions that that run against established empirical evidence, contradicting hundreds of papers and decades of economic analysis on the effects of tariffs," and make more detailed commentary on some of these assumptions, including:

The next key assumption that tariffs will raise U.S. productivity growth finds absolutely no support in the economic literature. Tariffs tend to reduce productivity growth as firms face less competition and therefore less incentive to innovate and reduce costs, resulting in more scarce resources flowing to less competitive firms and sectors and away from more competitive and innovative firms and sectors, and reduce scale economies as firms now operate in a smaller, domestic market rather than a larger global market. Indeed, this assumption implies that the Smoot-Hawley tariffs should have brought the U.S. out of the Great Depression. In their underlying model, a full-blown trade war is good for everyone.

The analysis thoroughly eviscerates the CPA analysis and concludes that "this study is not only misguided, but also intentionally misleading and would not find support in a serious economics journal."

I cannot top economist Jessica Riedl's analogy, so I'll repeat it here: "This is like hiring a NASA administrator who believes the Earth is flat, an Attorney General with no legal training ... or an HHS secretary who is an anti-vaxxer (oh wait)."

-- CAV

Will 'Hot Potato' Derail Milei?

Shortly after Milei's election in Argentina, I recall seeing something about him on the news at a relative's house. I said something to the effect of I want to like him, but between his inconsistency and political opposition, I don't see him doing much good.

I was thinking both of his being a professed anarchist and of the altruist-collectivist influence of Catholicism on the culture of Argentina. I could not have foreseen Milei's evolution as a political thinker, nor, as best I can surmise, did I appreciate how badly-off Argentina was.

The latter might explain why his explanations of his agenda have such a receptive audience and why that agenda has so quickly borne fruit, as John Stossel recently reported:

I wish America's politicians would pay attention to Milei's free market reforms.

Argentina's rent controls had caused a shortage of apartments.

"When Milei lifted rent controls," says [Cato's Ian] Vasquez, "the supply of apartments in Argentina tripled and their price fell by about half!"

He also deregulated airlines, allowing new routes, pricing, and competition.

Argentina still has big problems, like lots of poverty. Argentina's tariffs, import bureaucracy, and high sales taxes make consumer goods expensive; an $800 iPhone costs almost $3,000 there.

...

Milei's success not only shows that cuts are possible, but that when they are explained intelligently, they are popular. After Milei cut government, his approval rating rose 6 points.

Sadly, I also could not have foreseen what is at best a horrendous misstep: Milei's tweet in support of a meme coin. Although he quickly retracted the statement, the damage -- to investor portfolios and his reputation -- was already done.

Yaron Brook discussed the breaking news of the Libra token scandal in Argentina.

As Yaron Brook notes (embedded above), the tweet amounted to government intervention in the economy, coming as it did from a government official. Worse, since such currencies are not backed by commodities, they are not safe stores of value, as their notorious volatility should indicate. (The Reuters piece aptly likens "investment" in such instruments to a game of hot potato.)

The move looks careless at best and corrupt at worst, and Milei is facing impeachment over it.

I completely agree with Yaron Brook that, for whatever faults Milei has, his downfall, should it occur, will be tragic for the cause of freedom, and not simply because of his pro-freedom economic moves.

-- CAV

Four Wins

A Friday Hodgepodge

Whenever possible, I list three wins at the end of each day. Here are a few from a recent review of my planner.

***

1. As noted before, my son has started playing organized soccer again. He played defense and midfield (just like his old man did) in his first game back a couple of weeks ago and did well considering the hiatus.

The coach is doing a fine job and everyone is having fun, so this is the good return I was hoping for.

2. Having allowed the meal rotation Chez Van Horn to fall into something of a rut, I dusted off an old recipe I hadn't made since at least before the move from Florida.

Everyone loved it and it works as a hot school lunch for my daughter.

Chicken tikka masala for the win!

A couple of folks passed out customized Mardi Gras throws. (Image by the author. Reuse permitted.)

3. Here are a couple from following Arsenal with the local supporters group: I was there for Arsenal's recent cathartic and inspirational 5-1 humiliation of the defending Premier League champions, and I got to see what "Gooner Gras" is all about.

I have attended games with supporters groups from every city I have lived near for over a decade, and I rank the Crewe of Arsenal in New Orleans as my favorite -- although I do miss the private upstairs room the Charm City Gooners had.

4. I very much enjoyed seeing the jukebox musical Mamma Mia at the beautiful Saenger Theater with our family and the in-laws last weekend.

I will admit having to be dragged a little to this, having had a negative opinion of it. (Based on my father-in-law's opinion that the musical was far better than the movie, which I didn't see, but heard wasn't that good, I suspect this is why.)

I agree with my wife that it is a well done and enjoyable celebration of femininity.

-- CAV

MAGA Apes the Nutty Left

It is a truism that certain genres of fiction require a momentary suspension of disbelief. Something a little like that is necessary to enjoy the humor of a Matt Lewis column in The Hill.

To be fair, the subject, conservatism, has lately become so inherently absurd that my experience of the column was more like laughing for a moment until I remembered something like Oh yeah. These are the people who were supposed to be putting a stop to the unchecked nuttiness of the left. And now they're in power.

Whether you laugh or not is immaterial: The column makes some very interesting observations and comes very close to naming a profound truth.

The column overall concludes that conservatism has ceased being -- I'd say pretending to be -- about "rule of law, limited government, personal responsibility, moral clarity, fiscal responsibility and family values" and is now "whatever Trump says" it is.

Correct.

But what is Trump saying it is?

That's the interesting part, and a few of the observations will help with that:

The same people who once decried progressive efforts to reinterpret the Constitution (i.e., a belief in a "living Constitution") now embrace the idea that laws are merely suggestions -- so long as the right person is breaking them.

Constitutional originalism? That was yesterday. Today, it's all about results. If the law is inconvenient, just ignore it -- or, better yet, redefine it. [bold added]

All about results? Let's call that extrajudicial activism.

And then we have:

Take, for example, MAGA's latest absurdity: attempting to rename the Gulf of Mexico as the "Gulf of America." Is our nation's real problem bodies of water with insufficiently patriotic names?

But my real beef here isn't the name change itself; it's the administration's effort to compel media outlets like the Associated Press to use the term and to punish them for refusing.

Remember when conservatives railed against leftist speech policing? When progressives insisted on new pronouns, conservatives called it Orwellian. But now, when Trump is doing the dictating, suddenly it's just good old-fashioned patriotism. The same people who fought against the concept of "deadnaming," promoted by transgender rights activists, now demand that media outlets comply with their preferred nomenclature. [bold added]

If I didn't really need to cook up a parallel name for the Trumpists' scorn for rule of law, I don't at all need to do anything like that here.

One more:

And the best part is that his supporters eat it up. The same people who used to binge watch "Red Dawn" and dress up in tricorne hats and rant about government tyranny now worship a guy who cosplays as Napoleon and kisses up to Putin. [bold added]

Lewis concludes his piece: "After all, in today's GOP, it's not about what's true. It's about what's useful."

To which I'd say, Useful? For what?

Trump, like many or most Americans today, operates implicitly on the philosophy of Pragmatism, about which the philosopher Leonard Peikoff has said in part:

The two points central to the pragmatist ethics are: a formal rejection of all fixed standards -- and an unquestioning absorption of the prevailing standards. The same two points constitute the pragmatist approach to politics, which, developed most influentially by Dewey, became the philosophy of the Progressive movement in this country (and of most of its liberal descendants down to the present day).

Trumpists reject the (also Pragmatist) "left" on a superficial level while absorbing its cultural and political methods (See Trump being praised as an Alinskyite.) but absorbing the goals of the religious right (See also Alexandr Dugin.).

This is, in a nutshell, why moderates and classical liberals (who aren't in either cult-like MAGA or "Progressive" bubble) are seeing the current circus-like spectacle of MAGA -- supposedly rebelling against the nutty left -- acting just like it, but with different pet causes and -- dare I say? -- triggers.

-- CAV

Can Trump Top Carter's Deregulatory Wins?

At RealClear Markets, economist David Ozgo wonders if Trump can "become the next Jimmy Carter."

I am old enough to shudder from memories of inflation -- and economically literate enough to wonder if a demolition of tariffs anyone can understand is on tap.

Wrong.

Ozgo is writing a positive piece on Carter's underappreciated work as a deregulator, and includes analysis of how deregulation unleashed the potential of several major sectors of the economy:

The Airline Deregulation Act (ADA) was equally revolutionary in its impact. While Federal Express began in 1971, deregulation was deemed so important to founder Fred Smith that he eventually turned over day-to-day operations to subordinates and moved to Washington, D.C. to lobby full time for airline deregulation. Once the ADA was passed it allowed FedEx to purchase larger planes, move into more markets and allowed it to become the company we know today.

Freight is important. But, people are the most important cargo carried by any mode of transportation. The ADA allowed price competition, opened new routes and allowed new entrants into the domestic airline market. Since the ADA's passage the number of domestic passengers has grown more than fourfold from only around 200 million annually in the mid-1970's to over 850 million by 2022. By contrast, since 1975 the U.S. population has only gone up by 55%. We might all complain about getting stuck in the middle seat, but deregulation has made air travel possible for millions of Americans. [bold added]

It is hard not to get excited about what more deregulation might accomplish after Ozgo's whirlwind tour.

That said, my excitement is dampened by my impression that Trump's pledge to deregulate isn't accompanied with a legislative agenda, and that Trump resembles Carter in other unfortunate ways.

Trump did not have much of a legislative agenda in his first term and seems even more addicted to the Executive Order than he was then. So what if he deregulates if it is all easy to undo?

And, don't forget that inflation and weak foreign policy doomed Carter to a single term, and undercut the value of deregulation. Similarly, Trump's foolhardy tariff trade war and destabilizing kowtowing to despots like Putin may cause economic and security problems that dwarf any good he manages to accomplish as a deregulator.

Only time will tell if we have Carter II, and which kind we have if indeed we do. I am not bullish, but I hold out hope to be proven wrong.

-- CAV

What Does the DOGE Folly Accomplish?

"Don't bother to examine a folly, ask yourself only what it accomplishes. -- "Ellsworth Toohey" in The Fountainhead, by Ayn Rand

***

From Question 4 of a recent Q&A at Ask a Manager comes the following revelation about how Trump's DOGE firings are being done:

I was just fired by DOGE. I was not a probationary employee, and there is reason to believe the firing was due to political considerations and therefore illegal. I've been told that I may be a strong lead plaintiff for one of the class-action lawsuits that are being teed up...

In her reply, Alison Green adds:

... Probationary employees in the federal government are being fired and are having it documented as being for "performance reasons" even when they've had glowing performance reviews and even when their managers oppose the firing. A slew of letters doing this to people went out on Saturday night (of all times). This is not only profoundly shitty from a human standpoint -- being told you're being fired for performance when your work has been good -- but it will have practical ramifications too, since if they apply for another federal job in the future, this will come up during the background check.

This comports with Yaron Brook's recent commentary about the DOGE firings:

[T]he goal of DOGE in my view is twofold: one to distract from the fact that the real [reform] is not happening; two and maybe more importantly what DOGE is really doing ... is it is cleansing government from political opposition.

The former is plainly evident to anyone looking at the federal budget, whose largest components are entitlements Trump refuses to even entertain cutting; and the latter is certainly the result, given that any probationary employee will have been hired by the Biden Administration.

(I seem to recall, but haven't time to check that this is a strategy recommended by Project 2025 as a way for the Republicans to begin taking over the federal bureaucracy by speeding up the replacement of career bureaucrats with "our guys." Taking over something that should be phased out and abolished is worse than doing nothing.)

As I have noted already, even if DOGE isn't (or weren't) about taking over the leviathan state (as opposed to ending it), it is gimmicky in the most generous interpretation and will not succeed at all in retrenching government to its proper scope. If anything, it may well cost more than any marginal savings it realizes and will add a nasty cast to the futility it will already impute to the whole enterprise of government reform.

-- CAV

Washington vs. Trump

It is hard to believe that our first and best President, George Washington, was born nearly three centuries ago.

This morning, I chose to commemorate the birth of this great man, to whom so many owe so much, by reading his farewell address, by which he notably -- in contrast to the current holder of his office -- declined a third term as President.

The document lives up to its premise as advice from a parting friend in its warmth and wisdom.

That friend provides us with ample warning against despotism which we would do well to heed today:

However combinations or associations of the above description may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion.

...

The alternate domination of one faction over another, sharpened by the spirit of revenge, natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries which result gradually incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of public liberty.

Without looking forward to an extremity of this kind (which nevertheless ought not to be entirely out of sight), the common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and restrain it. [bold added]

We are domestically in exactly the precarious position described above: Both parties are fundamentally anti-liberty and anti-American, and we now have a President clearly eager to fan the flames of tribalism to pit us against each other for his own aggrandizement.

Within the world, things are equally dire:

So likewise, a passionate attachment of one nation for another produces a variety of evils. Sympathy for the favorite nation, facilitating the illusion of an imaginary common interest in cases where no real common interest exists, and infusing into one the enmities of the other, betrays the former into a participation in the quarrels and wars of the latter without adequate inducement or justification. It leads also to concessions to the favorite nation of privileges denied to others which is apt doubly to injure the nation making the concessions; by unnecessarily parting with what ought to have been retained, and by exciting jealousy, ill-will, and a disposition to retaliate, in the parties from whom equal privileges are withheld. And it gives to ambitious, corrupted, or deluded citizens (who devote themselves to the favorite nation), facility to betray or sacrifice the interests of their own country, without odium, sometimes even with popularity; gilding, with the appearances of a virtuous sense of obligation, a commendable deference for public opinion, or a laudable zeal for public good, the base or foolish compliances of ambition, corruption, or infatuation.

Trump's girlish crush on Vladimir Putin -- and the sympathy of many in his own party to Russia's theocratic, anti-liberty bent -- are even now damaging our nation's interests in favor of those of a war-mongering aggressor state we should be allowing (if not helping) to collapse due to its own folly.

As Washington himself would allow -- True leaders are man enough to admit that they are fallible. -- I don't agree with everything he says. But he is fundamentally correct about the need to preserve our nation's carefully crafted form of government so that it remains a powerful guarantor of liberty and at the same time too clumsy for a power-luster to abuse.

-- CAV