Month: May 2019

In a series of tweets starting Friday and continuing over the weekend, President Donald Trump outlined a plan for the federal government to use tariff revenue to buy agricultural goods from American farmers and redistribute it to other parts of the world.

It is, well, a pretty wild idea.

Though Trump has repeated this notion in a few other tweets, none of them go into much detail.

He seems to be proposing to use tax revenue paid by farmers—and by other Americans hurt by tariffs—to pay farmers to grow products they cannot sell, then to buy up the excess supply and spend more money shipping it to other countries where there is a demand for food.

If only there were some other mechanism for balancing supply and demand, right?

This Rube Goldberg–esque scheme is a good indicator of how convoluted Trump’s trade war has become. Even before last week’s ramp-up of U.S. tariffs and today’s retaliatory action from China, the trade war was already warping international supply chains. Brazil, for example, was shipping more soybeans to China after China, the world’s top consumer of soybeans, cut off imports of the crop from the United States. Brazil was sending so many soybeans to China that it actually had to import some from the U.S. to meet domestic demand.

Because trade, uh, finds a way.

Those alternative export markets weren’t enough to make up for the loss of the Chinese market, where nearly 50 percent of all U.S.-grown soybeans ended up prior to the trade war. The Trump administration tried to ease farmers’ pain by making $12 billion in payments to farmers stung by the trade war. Predictably, that became a boondoggle.

Now Trump wants to make this even more of a mess. Paying farmers to grow crops that they won’t be able to sell sounds a lot like something China would do, as Reuters columnist Karen Braun points out:

The govt buying product from farmers… sounds a lot like… China. Price support/govt purchasing has artificially inflated prices in China relative to the rest of the world. There’s no genuine price discovery. It didn’t exactly work either, so China has been phasing that out.

— Karen Braun (@kannbwx) May 10, 2019

Even the seemingly altruistic part of this wacky idea—handing out American surplus goods to the rest of the world—would likely be a disaster in practice.

For one, simply dumping American-grown agricultural goods into other countries would likely wreck local markets—and would probably violate World Trade Organization rules prohibiting such behavior.

For another, shipping goods all around the world requires a massive logistics operation that the federal government does not currently possess and likely would not handle well. And unless Trump is planning to nationalize the shipping industry too, there would be very real questions about who is paying for these shipments to “poor and starving countries.” I’ll give you one guess about the likely answer.

Prices and markets do a great job of predicting where supply will be needed to meet demand, even on the opposite side of the globe. There’s no reason to think the federal government, once it buys up all those excess goods from American farmers, will be anywhere near as efficient. The most likely end result of Trump’s Buy American policy is lots of American farm goods rotting in federal warehouses.

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You know what’s not fake news? It’s that politicians scream about the alleged dangers of “fake news” to justify efforts to censor speech that rubs them the wrong way. As Singapore’s rulers join a growing list of their peers in America and around the world promising to punish “false statements of fact,” it’s important to remember that the supposed plague of misleading and harmful information on the internet is nothing new, nor is governments’ desire to muzzle anybody who says inconvenient things.

Without a doubt, there’s bullshit on the Internet. Some of it results from sloppy fact-checking, and some is deliberate publication of untrue information and propaganda. But this isn’t a peculiar quality of online publishing—it’s an inevitable product of any publishing platform.

People want to reach the public with their messages, and they use the tools available to them.

Politicians like that power when it’s targeted at their enemies, but they resent it when they’re on the receiving end.

We’ve Been Here (Long) Before

“There has been more new error propagated by the press in the last ten years than in an hundred years before 1798,” President John Adams complained of his treatment by opposition newspapers at a time when news—fake or real—was printed by hand.

Adams’s Federalist allies in Congress responded to the president’s concerns about fake news with legal restrictions on “any false, scandalous and malicious writing or writings against the government.” Unsurprisingly, the first person charged under the law was an opposition lawmaker—Rep. Matthew Lyon of Vermont—who accused President Adams of “an unbounded thirst for ridiculous pomp.”

Ironically, the then-president’s own cousin, Samuel Adams, had been an especially effective propagandist and publisher of arguably misleading information in the years leading up to the American Revolution. But that was the sort of fake news to which John Adams had no objection.

Censorship in Singapore

Striking a note that John Adams and company would have recognized, Singaporean newspaper The Straits Times suggests that speech controls are necessary because “an erosion of trust in governments and institutions has threatened the very foundations of democracy worldwide” and the “spread of fake news on new media have deepened this crisis.”

Presenting the Protection from Online Falsehoods and Manipulation Bill for debate, Singapore’s Home Affairs and Law Minister K. Shanmugam said it was “an attempt to deal with one part of the problem. The serious problems arising from falsehoods spread through new media. And to try and help support the infrastructure of fact and promote honest speech in public discourse.”

Shanmugam’s party has held power continuously since 1959, largely by suing into bankruptcy any opposition figures who dare to utter speech critical of the regime.

His position is unlikely to become less secure now that government ministers have the unilateral power, “to prevent the communications of false statements of fact in Singapore” by requiring people to change or recant what they’ve published under threat of fines and imprisonment. The law—passed May 8—is intended to apply to information published not just inside the country but also elsewhere, a response to the government’s frustration with the international reach of the Internet.

That Singapore follows in the wake of Malaysia, another managed sort-of-democracy, is no surprise. That country last year banned the publication of “news, information, data and reports which is or are wholly or partly false” in a move transparently aimed at the opposition.

But traditional liberal democracies with supposedly firmer civil liberties protections also feel the allure of speech controls.

Channeling his own internal John Adams, France’s President Emmanuel Macron demanded government action against “propaganda articulated by thousands of social media accounts.” He went on to sniff, “If we want to protect liberal democracies, we must be strong and have clear rules.”

France’s lawmakers obliged their president with a law allowing government officials to order the removal of online articles deemed to be false.

They then erupted in outrage when Twitter determined that the French government’s own online efforts couldn’t be brought into compliance with the law and so rejected a voter registration campaign.

Macron continues to pressure online platforms to eliminate information he doesn’t like, meeting just days ago with Facebook’s Mark Zuckerberg.

Britain’s Prime Minister Theresa May also finds too much information published online to be inconvenient. She has accused Russia of “weaponizing information” and claims that Internet “companies have not done enough to protect users, especially children and young people, from harmful content.”

Without bothering with legislation, the British government is creating a “fake news” rapid response unit that is tasked with monitoring social media and going after stories officials claim are false. The government also proposes to hold online publishers liable for “inciting violence and violent content, encouraging suicide, disinformation, cyber bullying and children accessing inappropriate material.”

“The era of self-regulation for online companies is over,” Digital Secretary Jeremy Wright bluntly claims. “Voluntary actions from industry to tackle online harms have not been applied consistently or gone far enough.”

Censors plan, yet again, to suppress speech through involuntary means when people won’t muzzle themselves? What a shock.

Not that modern American politicians are immune to such temptations…

Speech Suppression Efforts at Home

Luckily the First Amendment, for now, poses a barrier to Singapore/Malaysia/France/UK-style suppression of disapproved speech in the U.S. But modern American politicians are far from immune to such temptations.

President Donald Trump famously denounces every inconvenient news story and critical report as “fake news.” His use of the term is so frequent that it was named word of the year for 2017 by the American Dialect Society.

Trump’s Democratic opponents may not agree that Trump should occupy the White House, but they share his resentment that online speech is out of (their) control.

Sen. Dianne Feinstein (D-Calif.) frets that Russia uses social media “to sow conflict and discontent all over this country” and threatens government intervention. House Speaker Nancy Pelosi (D-Calif.) openly envies the UK’s regulation of online media and says the U.S. should probably follow suit.

Last month, members of Congress from both parties alternately pushed extremism and political bias as reasons for government regulation of online speech.

Not that the rationale for regulating speech matters. The fakest news of all is the claim that politicians respect our liberty, including our free speech rights. Whatever excuse they raise, government officials will always find an excuse to try to suppress criticism and ideas they find uncomfortable. It’s our right to speak out anyway.

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“Until you do it, I’m the boss,” said Alexandra Ocasio-Cortez, the socialist congresswoman from the Bronx, responding to critics of her Green New Deal in February. Later that night, the freshman congresswoman doubled down on her comment, tweeting that people who “don’t like the #GreenNewDeal” should “come up with your own ambitious, on-scale proposal to address the global climate crisis. Until then, we’re in charge—and you’re just shouting from the cheap seats.”

Much has rightly been made of the Green New Deal’s fuzzy-headed utopianism and its impossible goal of reducing U.S. greenhouse gas emissions to net-zero in 10 years. But we should also pay close attention to the plan’s authoritarian impulses, particularly in light of its historical inspirations: Franklin D. Roosevelt’s New Deal and the command economy he established during the Second World War.

If proponents of the Green New Deal are serious—and there’s no reason to doubt them—then they’re proposing a return to a militaristic America where Uncle Sam’s heavy hand intervenes in all aspects of life, curtailing individual freedom in pursuit of their collectivist goals. And like the planners of the Roosevelt years, their intentions are clear and grandiose: They want the power to regiment a society of nearly 330 million people in pursuit of a pipe dream they liken to a war for survival.

‘The New Deal and the Analogue of War’

After FDR defeated Herbert Hoover in 1932, the new president rolled out his first New Deal to confront the Great Depression. Roosevelt saw the economic collapse as directly analogous to war. In his first inaugural address, he said that Americans “must move as a trained and loyal army willing to sacrifice for the good of a common discipline, because without such discipline no progress is made, no leadership becomes effective.”

Like President Woodrow Wilson during World War I, President Roosevelt and his New Dealers moved to cartelize the economy with the enthusiastic support of business executives such as Gerard Swope, president of General Electric. “There was scarcely a New Deal act or agency that did not owe something to the experience of World War I,” according to FDR scholar William E. Leuchtenburg in an excellent paper published in 1964, “The New Deal and the Analogue of War.”

The best example of this was the creation of the National Recovery Administration (NRA), which was essentially a peacetime version of Wilson’s War Industries Board (WIB). Headed by the Wall Street financier Bernard Baruch, the WIB coordinated purchases, allocated commodities, and fixed “prices and priorities in production” while guaranteeing a profit to the big business that helped fuel the war machine.

If the WIB could coordinate an economic mobilization during wartime, the Roosevelt administration thought, then a peacetime equivalent could defeat the Great Depression by mobilizing America’s productive powers. The NRA held industries to “codes of fair competition,” which set wages, working hours, and prices. By doing so, Roosevelt and his New Dealers believed they were overthrowing the cut-throat and chaotic competition they blamed for the Depression.

Companies that didn’t cooperate with the NRA were ostracized. Under the NRA’s Blue Eagle Campaign, businesses that played ball were given a blue eagle symbol for their windows and packages to advertise their adherence to the administration’s rules and regulations. Those that didn’t faced boycotts. As General Hugh Johnson, head of the NRA, put it, “Those who are not with us are against us.” Some businessmen who violated NRA regulations were arrested.

Socialist leader Norman Thomas called this “a scheme which in essence is fascist.” The NRA itself issued a report that stated, “The Fascist Principles are very similar to those we have been evolving here in America.” In 1935, the Supreme Court ruled the NRA’s “codes of fair competition” unconstitutional, saying they violating the Constitution’s separation of powers as well as the Commerce Clause. Small wonder that New Left historians accused the agency of championing a corporatist economy.

The Green New Dealers should also be wary of using the original New Deal’s Civilian Conservation Corps (CCC), which sent young unemployed and unmarried men onto federal, state, and local government lands for conservation purposes, as a model. In her defense of the Green New Deal at The Intercept—aptly titled “The Battle Lines Have Been Drawn on the Green New Deal”—Naomi Klein cites the CCC as an inspiration, noting that it began with 200,000 volunteers but then expanded dramatically due to its popularity. She doesn’t mention that the CCC was really an Army program with a titular civilian head.

Leuchtenburg points out that the CCC was “consciously devised to provide the moral equivalent to war” and that it “aimed to install martial virtues in the nation’s youth.” When the men woke up in their army tents in camp, they heard “Reveille.” During lights out, they heard “Taps.” It shouldn’t be surprising that when the draft returned in 1940, as Charles E. Heller writes, CCC alumni “provided the pretrained manpower to fill the U.S. Army’s ranks upon mobilization with men who readily assumed the role of Non-Commissioned Officers.”

The World War II Homefront

But then, the Green New Dealers seem to see that war as a model for domestic policy. In a widely lampooned FAQ document that an Ocasio-Cortez advisor erroneously claimed was a hoax, the Green New Deal is called a “10-year plan to mobilize every aspect of American society at a scale not seen since World War 2 to achieve net-zero greenhouse gas emissions and create economic prosperity for all.”

Americans should pay attention to what the country was like on the homefront during World War II. Prosperity it was not.

Unemployment did come down—to less than 2 percent—though that’s largely because more than a fifth of the U.S. workforce was conscripted and sent overseas to sacrifice life and limb. The workers who remained were focused on producing military goods, such as guns and ammunition, while consumer goods were either underproduced or not produced at all. Other goods—such as gasoline, tires, nylon, shoes, bicycles, sugar, meat, canned fish, cheese, and canned milk—were strictly rationed. Income tax rates applied to more and more people, including lower-income earners; hit confiscatory levels, with the highest marginal tax rate rising to 94 percent; and were rigorously enforced by the IRS through a new system of automatic payroll deductions.

American people did extraordinary things to win World War II, but it took an authoritarian society to achieve it—one that nobody should want to return to.

When the United States goes abroad to do widescale social engineering, that’s rightly called imperialism by libertarians and socialists alike. But when widespread social engineering is done at home through the federal government, people like Ocasio-Cortez call it progressivism and point to the New Deal and World War II to sell the plan.

When she says “I’m the boss,” pay attention. She’s describing America under a Green New Deal: a place where you’ll do as you’re told.

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Heather Mac Donald writes about this at the City Journal. The most striking data is on the average grade breakdown of incoming associates by race (which stems from what appear to be quite aggressive racial preferences in hiring), which comes from my colleague Rick Sander’s The Racial Paradox of the Corporate Law Firm (2006); note that it is from the “After the JD” study of lawyers who joined the bar in 2000, though my sense is that not much has changed (at least as to blacks and whites) in law schools and law firms since then:

To the extent that grades measure legal ability—and I think they do to a considerable extent, though of course the two aren’t perfectly correlated—it’s not surprising that the disparity coming in would yield disparity in attrition and in partnership rates, though of course this doesn’t preclude other possible causes for the latter disparity. For a response to Sander’s article, see this piece by James E. Coleman, Jr. & Mitu Gulati.

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