Tag: hit&run

Larry Kudlow, Donald Trump’s chief economic adviser, understands that tariffs on Chinese imports are a tax paid by American companies and consumers—a point his boss refuses to acknowledge. The president’s weird insistence that “China” pays the tariffs reflects not just his reluctance to take responsibility for tax increases but his longstanding, sincere, and fundamentally mistaken views on international trade—views that do not bode well for the outcome of his trade war.

“Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products,” Trump tweeted on Friday. As Kudlow conceded in a Fox News interview on Sunday, that is not how tariffs work. U.S. importers pay the tariffs, and they respond by reducing their profit margins, raising prices, or both.

During 2018, a recent study of Trump’s tariffs by economists at Princeton, Columbia, and the Federal Reserve Bank of New York noted, “the U.S. experienced substantial increases in the prices of intermediates and final goods, dramatic changes to its supply-chain network, reductions in availability of imported varieties, and complete passthrough of the tariffs into domestic prices of imported goods.” By the end of the year, they estimated, the tariffs were costing Americans $3 billion a month in added taxes and another $1.4 billion a month in lost efficiency.

That was before Trump raised the rate on $200 billion in Chinese products from 10 percent to 25 percent. The administration plans to extend the 25 percent tariff to another $300 billion in goods, which would cover nearly everything Americans import from China, including computers and cellphones.

Kudlow argues that the price is worth paying if the tariffs pressure China to address American complaints about subsidies, restrictions on access to the Chinese market, intellectual property theft, and mandated transfers of technology and ownership stakes. Trump, by contrast, refuses to admit Americans are paying any price at all.

The president does acknowledge that China’s retaliatory tariffs have hurt American farmers, and he promises to help them, using revenue generated by his own tariffs, which amounts to a transfer from one set of victims to another. His stance is not just a form of blame shifting but a logical corollary of his economically ignorant conviction that exports are good and imports are bad.

“You only have to look at our trade deficit to see that we are being taken to the cleaners by our trading partners,” Trump wrote two decades ago in The America We Deserve, arguing that peaceful economic exchange is “like war.” This mercantilist notion—that something shady must be happening unless the Unites States exports at least as much to a particular country as it imports from that country—continues to dominate his thinking about international trade.

“If we didn’t trade,” the president averred last year, “we’d save a hell of a lot of money.” But that does not mean we’d be better off, since we would not have all the things we buy with our money, which we clearly value more than the money itself, since no one forces us to exchange one for the other. The analysis is the same whether or not the people who sell us things happen to be located in the United States.

As Rep. Justin Amash (R-Mich.) pointed out at the time and again when Trump claimed last week that money is “lost” when it’s spent on Chinese products, “A trade deficit is not a loss of money. If you buy from a supermarket or go to a movie, you have a trade deficit, but you have not lost money; you get stuff (groceries, entertainment, etc.) in exchange for your dollars.”

Whatever you think of Trump’s tariffs as a negotiating tactic, you should be troubled by the fact that the resolution of this trade war is in the hands of a man who thinks Americans would be better off if they spent nothing on imported goods they demonstrably want.

© Copyright 2019 by Creators Syndicate Inc.

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Who is going to stand up for the utopian possibilities of free markets, private property, and individual liberty in an era when more Americans between the ages of 18 and 29 have a positive view of socialism (51 percent) than capitalism (45 percent)?

Politicians such as Sen. Elizabeth Warren (D-Mass.), Rep. Alexandria Ocasio-Cortez (D-N.Y.), and Sen. Bernie Sanders (I-Vt.) yammer on about the need for “bold, structural solutions” that inevitably involve jacking up government control over more and more aspects of economic and cultural lives (promises of higher taxes, tighter regulation of business, and policing of political speech on social media are just the beginning). On the Republican right, observes Max Gulker of the American Institute for Economic Research (AIER), conservatives have managed to yoke pro-market rhetoric with a backward-looking, mostly reactionary social agenda that is inimical to the individual freedom at the heart of the capitalist enterprise. “The same politicians most prominently arguing for capitalism and less government interference in markets have also been pushing social views that each successive generation finds increasingly unacceptable,” he writes. Donald Trump pulled just 39 percent of votes cast by people between the ages of 18 and 44. Conservative Republicans have effectively alienated Millennials and Gen Z, says Gulker, “who incorrectly see capitalism as part of an old order to be overturned.”

Ironically, Karl Marx and Frederick Engels understood that capitalism is in fact a constant source of disruption and change. In The Communist Manifesto (1848), they stated,

Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind.

Almost a century later, Joseph Schumpeter updated Marx and Engels in Capitalism, Socialism, and Democracy in at least two profound ways. First, he pointed out that they were wrong in thinking that capitalism would destroy itself by “immiserating” workers. In fact, he noted,”the capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within reach of factory girls.” Say what you will about supposedly stagnant wages and the like, but we live in a country where a record-high percentage (67 percent) of low-income high-school grads go on to college, more than double the share in 1980. And where more households are moving up the income ladder than sliding down it. Around the globe, a growing majority of people live at middle-class standards or above, thanks to liberalization of trade and other market-based reforms.

Second, Schumpeter coined the term creative destruction to more fully describe the incessant changes that affect the economic life in a free-market (or “bourgeois”) society:

Capitalism […] is by nature a form or method of economic change and not only never is but never can be stationary. […] The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates.

[…] The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.

The same sort of creative destruction also characterizes social and cultural life, as well, which is one of the reasons why libertarians (as opposed to conservatives) have long been champions of liberatory policies such as marriage equality (Reason has been calling for that since the early 1970s), an end to drug prohibition, increases in legal immigration, and the like. Change created by individuals endlessly discovering and recalibrating their desires in both economic and cultural terms is the only constant. This sort of freedom doesn’t lead to nihilism or iconoclasm in either the commercial or personal spheres. Rather, it allows for more options and the persistence of certain types of models and institutions that work, even as it gives more people the ability to run what John Stuart Mill called “experiments in living.”

In the current political landscape, though, the main choices on display are free-market reactionaries (Republicans) and socialistic control freaks (Democrats). AIER’s Gulker doesn’t fault younger Americans for being confused and siding with the latter:

Suppose you’re a 25-year-old who is neither expert nor ignorant in current events and economics. Those touting the virtues of capitalism are…offering a generally traditionalist worldview, not to mention specific social views you’re likely to find retrograde. Without much understanding of economics, how can you see capitalism as anything but the status quo, the system currently in place where big corporations are run by old men? Some center Left candidates who seem more in step with your social views keep telling you this old order of capitalism needs to be further “checked” by government. And some Far Left politicians, with a little more conviction, tell you that markets are just another part of an old unjust order we need to leave behind.

Yet this would be ruinous, since it’s precisely the creative destruction of markets that has helped generate exactly what young people like about the contemporary world—from smart phones to ride sharing to flexible workplaces to the near-infinite choice and near-instant gratification made possible by a company like Amazon. Gulker posits that it’s up to libertarians to explain and sell capitalism as a decentralized, forward-looking, and responsive system.

Free markets coupled with local, voluntary institutions can bring about a society widely prosperous and caring beyond the wildest dreams of central planners like Sanders and Elizabeth Warren, and do so without distorting the economy or appropriating vast amounts of money from anyone….No generation is better poised to understand the power of entrepreneurial dynamism and networked bottom-up cooperation more than millennials. If that doesn’t sound like a description of capitalism to you, you’re not alone. Capitalism is not a hallmark of conservatism, it’s the most surefire way to change the world.

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The debate over the “heartbeat bill” signed into law in Georgia last week has been both hyperbolic and vitriolic. Of course, stakes are high in the debate over the legality of abortion and the potential for reconsideration of the Supreme Court precedent set in Roe v. Wade (1973).

But at Reason, we believe calm, rational discussion is possible even between people who strongly disagree. So Editor in Chief Katherine Mangu-Ward sat down with Managing Editor Stephanie Slade, who is pro-life, and Associate Editor Liz Nolan Brown, who is pro-choice, to talk about the present state of abortion politics and the ways in which reasonable libertarians can disagree on this issue.

Further reading:

Stephanie Slade on Why I Am a Pro-Life Libertarian and Why Is the ACLU Targeting Catholic Hospitals?

Elizabeth Nolan Brown on how A Post-Roe World Would Pave the Way for a New Black Market in Abortion Pills and Doctors Call for Decriminalization of Self-Induced Abortion.

Subscribe, rate, and review our podcast at iTunes

Audio production by Ian Keyser.

 

 

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As Jonathan has noted, the Supreme Court recently released an interesting antitrust opinion in Apple, Inc. v. Pepper. The majority opinion was written by Kavanaugh and joined by the liberals; the dissent was written by Gorsuch and joined by the remaining conservatives.

In this post, I’ll explore how the Kavanaugh-Gorsuch disagreement relates to textualism. Later, I’ll talk about how this relates to the theory of the firm.

I. The Illinois Brick rule and the basic debate in this case

First, you need to know the basic debate, which is how to characterize the antitrust standing rule of Illinois Brick Co. v. Illinois (1977). (This is statutory standing, not constitutional standing—what in administrative law we call “zone of interests” standing.) Just so you understand the issues involved, let me give a brief overview: Suppose Firms A1, A2, etc. make concrete blocks and sell them to general contractors B1, B2, etc. Then you hire those general contractors for your construction projects. You have a theory that the concrete block manufacturers A1, A2, etc. have violated the antitrust laws (for instance, by conspiring to fix prices); as a result, general contractors B1, B2, etc. have paid excessive prices, and in turn you’ve paid excessive prices for your construction projects. Can you sue the concrete block manufacturers A1, A2, etc.?

Those are essentially the facts of Illinois Brick. The Illinois Brick rule says No. The general contractors B1, B2, etc. are the direct purchasers who directly pay the alleged price surcharge, and they have statutory standing to sue. You, on the other hand, are not a direct purchaser, and your damages are indirect: whether you pay the alleged price surcharge depends on the extent to which B1, B2, etc. have been able to pass on that price increase. So you can’t sue. Remember that this is a rule about standing, i.e. about access to court—you can’t sue even if A1, A2, etc. have really violated antitrust law.

Now Apple, Inc. v. Pepper presents a particular twist on the Illinois Brick facts. In the fact pattern above, there was a clear vertical hierarchy. The A firms sold to the B firms, which in turn sold to you. You had no contact with the A firms: you neither bought from them directly nor paid their allegedly inflated prices.

But what if the firms had a less clear-cut vertical relationship? In Apple, it was apps being sold through Apple’s App Store. When you buy an app, the price is set by the app developer. But you pay the price to Apple directly; Apple passes the money on to the app developers, retaining a 30% commission. The claim was that Apple was improperly using its monopoly power, which made the 30% commission too high. So this disaggregates two aspects of Illinois Brick:

• Who buys directly from Apple? You do.
• Who directly pays the alleged inflated fees? The app developers do. (You may indirectly pay more for the apps, but that depends on the extent to which the app developers can pass on the higher commissions.)

If you think the Illinois Brick rule was “Direct purchasers from the alleged violator may sue,” then you’ll probably think the end consumers can sue. That’s the Kavanaugh majority. But if you think the Illinois Brick rule was “Those who directly pay the alleged inflated prices may sue,” then you’ll probably think standing is reserved for the app developers, not the end consumers. That’s the Gorsuch dissent.

I’m not going to resolve that debate here, but I want to raise a number of interesting points, some of which go to the heart of how antitrust rules interact with the theory of the firm.

II. Textualism and the Sherman Antitrust Act

The first point has to do with textualism. Kavanaugh is thought of as a textualist, and so is Gorsuch. How, then, are we to understand their disagreement on the meaning of the Sherman Antitrust Act in this case?

In the first place, the Sherman Act is very short and very old, and for a long time has been understood as a delegation to the judicial branch to develop (common-law-style) workable rules. (The Supreme Court suggested, in National Society of Professional Engineers (1978), that this common-law-style policy development was part of the intent of the original Congress. For my views on such delegations, see my Emory Law Journal article on federal common law and judicial non-delegation, and in particular pp. 1453-56 for the section on the Sherman Act.) A lot of antitrust law, these days, is fairly far removed from any actual text, though one can certainly imagine a more textualist approach.

But this isn’t the whole story, since both Kavanaugh and Gorsuch claim that their respective interpretation has greater textual bona fides.

Kavanaugh (p. 4) points to particular text in the Clayton Act of 1914 (emphasis added):

any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue . . . and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.

“The broad text” of this statute, Kavanaugh wrote, “readily covers consumers who purchase goods or services at higher-than-competitive prices from an allegedly monopolistic retailer.”

Now this isn’t exactly right, because if any person who’s injured can sue the alleged antitrust violator, then we’d have virtually no statutory standing requirements at all (other than the requirement of injury, which is already taken care of by the constitutional standing requirement of injury-in-fact, and the “in his business or property” requirement, which is similar to what we have in RICO standing).

Still, even if pointing to this text doesn’t inexorably lead here to overruling Illinois Brick, at least, in Kavanaugh’s view, it cuts against any attempt to read statutory standing narrowly.

How does Gorsuch get around this? By writing (dissent, p. 9):

The Court even tells us that any “ambiguity” about the permissibility of pass-on damages should be resolved “in the direction of the statutory text”—ignoring that Illinois Brick followed the well-trodden path of construing the statutory text in light of background common law principles of proximate cause.

In other words, the statutory text doesn’t stand alone; you need to interpret statutory text in light of the rest of the legal system that existed at the time of enactment, including “background common law principles.”

How does Gorsuch’s approach square with his textualism? Answer: perfectly well. Eugene writes (in the context of the Hyatt decision) that:

none of the Justices on the Court is a pure textualist. They all consider at least the text, the original meaning, and “historical practice.” And that is in large part because the Constitution is widely understood as having been enacted against a backdrop of established law and practice, and therefore in some measure implicitly adopting aspects of that law and practice, rather than being limited to what is within the four corners of the document.

I agree, except insofar as considering the “backdrop of established law and practice” is labeled a departure from “pure textualis[m].” Thomas in Hyatt (quoting Kennedy in Alden v. Maine) criticizes “ahistorical literalism,” and I’d stick with that formulation. Ahistorical literalism isn’t pure textualism; it’s usually an anti-textualist’s caricature of what textualism requires. The idea that background principles of proximate causation should be read into statutes like the antitrust laws (or RICO, or others) is perfectly good textualism.

Of course, it’s not like Kavanaugh disagrees with the idea that proximate causation is part of the statute. They actually both agree on this score: Kavanaugh says (p. 5) that the statutory text counsels against reading standing narrowly, and that proximate-cause considerations prevent suits by indirect purchasers. Gorsuch says (dissent, p. 2) that proximate-cause considerations prevent going “the next step” after “the overcharging,” which would prevent suits by those who didn’t pay the alleged overcharge. So they agree on proximate cause but disagree on how to characterize the causal chain that eventually needs to be cut—which is the ultimate disagreement in the case. Either way, nobody’s approach here is necessarily inconsistent with textualism (though other approaches play a role here, including precedent and free-floating antitrust policy); someone’s presumably wrong and someone’s right, but these are valid disagreements among textualists.

III. Contraction traction, what’s your fraction?

Fine, please note that Gorsuch is all about using contractions. Scalia was very much against contractions, in his day (not just in his own opinions, but also in others’). Gorsuch embraces them. I’m glad to see this catch on. Bryan Garner approves too, and notes that Kagan has also been using them but only in separate opinions.

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The Houston narcotics officers who invaded a middle-aged couple’s home on January 28, serving a no-knock drug warrant based on a fraudulent affidavit, claimed they killed Dennis Tuttle and Rhogena Nicholas in self-defense. A recent forensic inspection of the house, commissioned by the couple’s relatives, casts doubt on that account and reinforces the suspicion that at least some of the four officers who suffered bullet wounds were shot by their colleagues.

According to the cops who served the warrant, which was based on a “controlled buy” of heroin that apparently never happened and authorized a search that found no evidence of drug dealing, Tuttle began shooting at them with a .357 Magnum revolver immediately after the first officer through the door used a shotgun to kill a dog that confronted him as he entered the house. They say the officer with the shotgun collapsed on a couch after a round from Tuttle’s gun struck him, at which point Nicholas moved to disarm him, prompting the cops to shoot her twice. Tuttle continued firing, we are told, until he died in a hail of bullets that struck him at least eight times.

Even taking this account at face value, the officers started the gunfight by breaking into the house without warning and shooting the dog, a reckless entry that invited confusion. It is not clear that Tuttle knew the armed intruders, who were not wearing uniforms and did not announce themselves before storming into the house, were police officers. Nor is there any body camera footage of the raid that might shed light on that question.

But there is physical evidence at the house, which seems inconsistent with the story told by the narcotics officers. Houston Chronicle reporters Keri Blakinger and St. John Barned-Smith say a forensics team that the Tuttle and Nicholas families hired, headed by Mike Maloney, a retired supervisory special agent with the Naval Criminal Investigative Service, “found no indication that any of the guns Tuttle owned were fired toward the front of the house at incoming police.”

While Maloney has not completed his analysis yet, “the initial bullet trajectories appear to be somewhat contradictory,” Chuck Bourque, an attorney representing Nicholas’ family, told the Chronicle. “We see no evidence that anybody inside the house was firing toward the door.”

Blakinger and Barned-Smith report that “some of the bullet holes outside the house appeared at least a foot from the door.” That suggests one or more of the officers who fired at Tuttle and Nicholas did so blindly. “You can’t see into the house from there,” Mike Doyle, another attorney hired by Nicholas’ relatives, told the Chronicle. “You’re firing into the house through a wall.”

Houston Police Department spokesman Kese Smith told me he can’t answer any questions about the ballistic evidence, or even explain why the revolver that Tuttle allegedly used was not listed on the search warrant inventory, until after HPD has completed its criminal and internal affairs investigations of the raid, which is also being investigated by the FBI and the Harris County District Attorney’s Office. But Maloney’s team found that police left behind a lot of potentially relevant evidence, including two teeth, a men’s shirt with bullet holes and an evidence tag, a shotgun shell casing, and about a dozen .223- and .45-caliber bullets in the walls and floor, which apparently were fired by police.

Sam Walker, a criminal justice professor at the University of Nebraska at Omaha, told the Chronicle the HPD’s haphazard evidence collection raises questions about its investigative practices. How many people have been convicted over the years as a result of sloppy investigations which failed to collect evidence that was there that would have exonerated the suspect?” he said. “If they do it in this kind of a homicide case, what do they do in other kinds of investigations?”

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Tensions between Iran and the United States have ratcheted up in the past two weeks, following a series of provocative actions and statements from the Trump administration, including news yesterday that senior defense officials are revising contingency plans to send thousands of troops to the Middle East to counter Iran.

On Monday, The New York Times reported that last Thursday senior defense officials reviewed plans to send 120,000 troops to the Middle East in the event that Iran attacks U.S. troops in the region or begins ramping up its nuclear program. The review of these plans, according to the Times, was initiated by  John Bolton, the national security advisor and a noted Iran hawk.

This was not the first provocative action taken by Bolton in recent weeks. Last Sunday, Bolton announced that an aircraft carrier, the USS Abraham Lincoln, and a number of bombers would be headed to the Persian Gulf in response to unspecified warnings that Iran and its proxies were preparing to attack U.S. forces in the region.

The Abraham Lincoln was already headed to the area but was ordered to skip several scheduled stops at European ports. Its expedited journey, along with the additional bombers, was intended to serve as “a clear and unmistakable message” of resolve from the U.S. to Tehran, Bolton said, according to Reuters.

This was followed by the deployment of even more U.S. forces, including another naval vessel and an anti-missile battery, to the Persian Gulf on Friday.

Iranian military officials have upped their rhetoric in response.

“An aircraft carrier that has at least 40 to 50 planes on it and 6,000 forces gathered within it was a serious threat for us in the past. But now it is a target and the threats have switched to opportunities,” said Amir Ali Hajizadeh, head of the Iranian Revolutionary Guard’s air force, to Al Jazeera on Monday.

The U.S. has assured the world that its intentions are peaceful, with the Department of Defense issuing a statement Friday saying that “the United States does not seek conflict with Iran, but we are postured and ready to defend U.S. forces and interests in the region.”

Nevertheless, the threat of accidental escalation is real, says Emma Ashford, a foreign policy scholar at the Cato Institute.

“I don’t believe either side really wants a conflict, but you put this many troops from both sides in a small area and raise tensions like this, there’s always the risk that something happens accidentally that spirals into a larger conflict,” Ashford tells Reason.

This risk, she says, is heightened by the possibility that militant groups aligned with Iran, but not directly controlled by the government, might stage an attack that leads to a U.S. response.

Over the weekend, Saudi Arabia and the United Arab Emirates, both rivals of Iran, reported that their oil tankers were sabotaged in the Persian Gulf. On Tuesday morning, Saudi Arabian officials also said that terrorists used drones to attack two oil pumping facilities in the country.

Pentagon officials revising plans to add additional troops to the Middle East to counter Iran is more routine, says Ashford.

“The Pentagon has a plan for everything, and these plans are constantly revised to deal with changing circumstances,” she tells Reason.

Nevertheless, that it was Bolton in particular who’s been pushing defense officials to revise their Iran plans may indicate his willingness to exploit any bureaucratic opportunity to raise tensions with the country.

That the Trump administration itself lacks a coherent Iran strategy only raises the possibility that it will stumble into a conflict it doesn’t want, says Ashford. As she told Reason, “there’s a real risk someone will take a step that ends up putting us in a conflict situation.”

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In theory, Medicare for All is more popular than ever. Polls show that a majority of the country favors the idea, which, as proposed by Sen. Bernie Sanders (I–Vt.), would set up a single-payer health care system that would make the government the financier of nearly all health care in the United States. Some surveys have even found that a surprisingly large percentage of Republicans are open to the idea.

But those same surveys consistently reveal that support for Medicare for All falls apart as soon people hear that it would raise taxes, result in delays for care, and eliminate private insurance—all of which are likely outcomes of a transition to single-payer. The public, in other words, favors the non-specific, cost-free idea of Medicare for All, but not the practical reality and the many trade-offs that it would necessarily entail.

This represents something of a problem for Democratic presidential hopefuls, who want to be seen backing Medicare for All, which is popular, but not its consequences, which aren’t. Some, like Sen. Amy Klobuchar (D–Minn.), have attempted to thread the needle by saying that Medicare for All is “aspirational,” or, like Sen. Corey Booker (D–N.J.), painting it as a long-term goal rather than a pragmatic possibility. Others, like current poll-leader Joe Biden, have said they support an expansion of Medicare, allowing more people to buy in—but not the strict single-payer variant proposed by Sanders.

And then there is Sen. Kamala Harris (D–Calif.), who has settled for evasive squabbling about precisely what Medicare for All would do.

In an interview with CNN’s Jake Tapper, Harris argued against the notion that the plan would wipe out private health insurance, insisting that it would allow for supplemental coverage.  

This is both technically true and mostly disingenuous. It is, at very best, a dodge. Although the Sanders plan would allow for very limited private coverage on top of the government plan, the space for such insurance would be vanishingly small, restricted mostly to cosmetic procedures.

The sort of comprehensive private coverage that nearly 180 million Americans have today would be completely eliminated. Private health insurance as we know it would be outlawed in the space of just four years. That is an essential and longstanding part of the Sanders plan. Instead of acknowledging this, Harris opted to argue about a technicality.

That private coverage would go away is not really a matter of dispute, or a result of some arcane reading of the legislation. Even Bernie Sanders himself has touted the elimination of private insurance as a feature of his plan.

You're damn right. https://t.co/5lo87WKS60

— Bernie Sanders (@BernieSanders) March 27, 2019

Harris certainly knows this. As recently as a few months ago, she approvingly accepted the notion that Medicare for All would eliminate private coverage. She even made the argument that doing so would be a good thing.

In a separate interview with Tapper in January, she was asked about eliminating private coverage under Medicare for All. In response, she cast insurers as frustrating bureaucratic middlemen that she wanted to get rid of. “Let’s eliminate all of that,” she told Tapper at the time. “Let’s move on.” First, she wanted to get rid of private insurance and move on; now, she wants to argue over whether or not the bill eliminates every last tiny bit of private coverage. 

This is a revealing moment. The politics of Medicare for All have placed Democratic presidential hopefuls in a genuinely tricky spot. And the various ways in which Harris’ rivals have attempted to navigate the issue suggest that, over time, the party is likely to settle for something less than full-fledged single-payer, even as a core group of diehards remain in support of the idea.

Harris’ evasive response, in contrast, mostly tells us about Harris. And what it suggests is that she would rather avoid acknowledging or defending the policy trade-offs she apparently favors—and would prefer to distract and mislead people instead.

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When Congress allowed the Export-Import Bank’s charter to expire in July 2015, it looked like a victory against crony capitalism.

Congress, it seemed, had finally come to view the federally backed financial institution as a liability rather than as a boost to business. And when the bank was reauthorized by Congress several months later, it was given a more limited role. It saw a cut of 85 percent in its funding and, because the bank was reauthorized without a quorum of board members in place, it was prevented from issuing loans above $10 million dollars. It wasn’t total victory, but it was progress.

That changed last week when both Republican and Democratic senators voted to restore the bank’s lending authority by approving three members to the board. Even though I expected this to happen eventually, I was still shocked by this vote.

With so much evidence that the Ex-Im Bank—an agency that provides financial support to foreign and domestic companies to boost U.S exports— was nothing more than corporate welfare for large domestic firms and so many foreign state-owned companies, including Chinese ones, and with no impact on net exports, I assumed members of Congress would feel embarrassed to vote to restore the funding. I was wrong.

But the evidence that the Ex-Im Bank serves no productive function except to enrich large corporations continues to be overwhelming. Congress may have given the bank new life, but it still deserves to die.

In 2014, the last year it had a full quorum on its board, and the last year it could give loans larger than $10 million, the bank’s funding was about $21 billion. By 2018, that figure had been reduced to $3.6 billion in real terms. It’s worth looking back at what the bank was doing when it was fully funded.

In the 2014 fiscal year, the Ex-Im Bank was the quintessential corporate welfare agency. On the domestic side, 65 percent of Ex-Im activities benefited 10 giant American companies, including GE and Caterpillar. Boeing alone benefited from 70 percent of the loan-guarantee program and 40 percent of the bank’s overall activities ($48.4 billion), earning Ex-Im the nickname “the Bank of Boeing.”

On the foreign side, Ex-Im’s beneficiaries were similarly well-funded. A vast majority of these companies had ready access to capital, and were as large as the domestic beneficiaries. These clients belonged to the Who’s Who of the airline industry, with names like Emirates Airline, Lion Air, and Ryan Air. Also among the foreign beneficiaries was Pemex, the Mexican state-owned oil and gas company.

In those days, then, the Ex-Im Bank was in the business of big business. But after the lending cap was put in place due to the lack of board members, that changed. In 2018, the share of large firms benefiting from Ex-Im dropped from 75 percent to 34 percent. Boeing’s share of the benefits dropped to zero.

Proponents of Ex-Im have argued that it’s an essential lifeline for the companies it lends money to. Yet all of these companies have been doing just fine without Ex-Im. Indeed, many of them had their best year ever in 2018. That includes Boeing, which saw its sales skyrocket over four years without the bank’s assistance.

As the federal government got out of the export lending business, many big private players filled the gap. It was a small gap to fill in the first place, since in 2014 over 98 percent of exports took place without any Ex-Im backing.

You would think that members of Congress could have concluded that these companies didn’t need the boost. Export financing was flourishing on its own.

You would be wrong, as the Senate just voted to restore the Bank of Boeing to its full potential. This was a vote to put crony capitalism back in business.

It was also a vote to give an unearned bonus to America’s biggest economic rival.

Back in 2014, China was the top beneficiary abroad of Ex-Im activities. About 11 percent of all Ex-Im activities (or $2.3 billion) benefited China. In 2018, that share dropped to 1 percent—or $34.2 million. Of all the Chinese companies that benefited, Air China received the most financial backing from the Ex-Im Bank. This should make you strongly reconsider the Trump administration’s argument that we need Ex-Im to return to its 2014 days in order to fight China.

Indeed, in 2014, the top 10 state-owned recipients of Ex-Im financial aid totaled 30 percent of all Ex-Im activities, or $5.9 billion in deals backed by taxpayers. The U.S. government was backing billions in deals to boost companies owned and operated by foreign rivals. In 2018, these numbers dropped, respectively, to 0.5 percent and $16.6 million. The bipartisan group of lawmakers who restored Ex-Im’s board last week appear to want to go back to backing state-owned enterprises.

Supporters of Ex-Im have sometimes argued that it helps encourage exports. Yet the drop in funding between 2014 and 2018 had little to no impact. In 2018, less than 0.3 percent of exports were backed by Ex-Im, yet overall exports continued to grow from $2.37 trillion in 2014 to $2.55 trillion in 2018.

During the last four years, as Ex-Im’s funding and lending capacity were sharply limited, China lost most of its American subsidies, as did most state-owned businesses. American exports thrived, and American businesses that had been supported by the bank had record years. Yet the Senate just voted to go back to the way things were before. That is shameless, pointless, and wrong.

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They say that government policies never really fail; they just haven’t been tried hard enough.

Libertarians know that’s far from the truth, of course, but it’s a cliche because it does reveal something about the way policymakers tend to view their pet projects. Bad policy begets bad policy in pursuit of ends that are always one step away—all we need is one more tweak, one more adjustment to correct an unintended consequence, one more intrusion into the marketplace.

So it has been with President Donald Trump’s trade war. Last year, the president authorized $12 billion in emergency spending through a New Deal-era crop insurance program to subsidize some farmers against losses they accumulated after China slapped retaliatory tariffs on American agricultural goods.

Now, with China hitting back against Trump’s latest escalation of the trade war by imposing more tariffs on American farm goods, the White House is preparing to double down on those bailouts—effectively paying farmers to grow crops they won’t be able to sell with money generated from higher taxes on those same farmers (and all other Americans). And the increased interest in economic protectionism has created an opportunity for farm lobbyists to potentially score a somewhat unrelated victory by pushing for higher tariffs on Mexican produce.

On Friday, Trump ordered an increase in tariffs on $200 billion in Chinese imports, from 10 percent to 25 percent. Another $325 billion in Chinese imports could be subject to tariffs within weeks unless a trade deal is struck with China—an outcome that seems unlikely at the moment. On Monday, China retaliated by imposing tariffs on $60 billion of American imports, as well as hiking tariffs on farm products.

“This can’t go on for an extended period of time. We need a trade deal done soon, and in the meantime, farmers are probably going to need another round of aid payments,” Grant Kimberley, director of market development at the Iowa Soybean Association, told CNN.

On Monday, Trump promised to redistribute $15 billion in tariff revenue to farmers.

Those bailouts are a poor substitute for letting farmers have access to foreign markets. For one, that’s because government handouts are rarely handled in an efficient way. Indeed, last year’s $12 billion tariff bailout turned into a predictable mess, with hundreds of people living in big cities getting checks meant for farmers, according to one agricultural policy watchdog group.

While government bailouts might save farmers from some short-term pain, the trade war is doing other damage that can’t be easily rectified.

“The soybean market in China took us more than 40 years to build, and as this confrontation continues, it will become increasingly difficult to recover,” said Davie Stephens, a Kentucky-based farmer, and president of the American Soybean Association, in a statement. “What that means for soybean growers is that we’re losing. Losing a valuable market, losing stable pricing, losing an opportunity to support our families and our communities.”

Soybeans are particularly hard-hit by the ongoing trade war. About half the soybeans grown in America are exported, and the vast majority of the exports used to go to China. With China cutting off American soybean imports late last year, the market for the crop has crashed amid a huge surplus. Soybean futures dropped to their lowest levels in a decade on Monday, The Washington Post reported.

Still, perhaps the best indicator of how bad trade policy is encouraging more of the same is the fact that farming lobbyists are now asking for more protection from foreign agricultural goods, even as the same industry is pushing the Trump administration to end the trade war with China.

“President Trump’s drive to raise tariffs on imports has shifted money from the pockets of consumers to the profits of producers in the manufacturing sector—notably steel, aluminum, and autos,” write Gary Clyde Hufbauer, and Euijin Jung, researchers at the Peterson Institute for International Economics, a trade policy think tank. “These actions have now inspired farm state lawmakers, in alliance with local agricultural producers, to seek their own barriers, raising the price of tomatoes, bell peppers, blueberries, and other produce.”

They point to two things. First, the Trump administration’s decision last week to end a decades-long deal with Mexico that effectively raised tariffs on imported tomatoes. As I wrote last week, this means that the juicy red fruits coming across the southern border will now be subject to a 17.5 percent tariff. More than half of all tomatoes consumed by Americans come from Mexico, and the new tariffs could result in a price increase of as much as 85 percent, according to an analysis from Arizona State University. These changes will also jeopardize jobs in Arizona in order to protect farmers in Florida.

Second, there’s a bipartisan proposal from Sens. Bill Nelson (D–Fla.) and Marco Rubio (R–Fla.) that would allow the executive branch to impose new import duties on Mexican-grown blueberries, bell peppers, and other produce if American growers complain about unfair competition.

“It would enable growers in a single region of, for example, Georgia or Florida, to raise national prices of bell peppers, blueberries, tomatoes, and other produce at a moment’s notice,” the PIIE analysts warn.

The rolling back of the free trade consensus in Washington is a sea change that goes well beyond the tariffs Trump has imposed on China, Europe, Canada, and elsewhere. Unfortunately, as this week has demonstrated, opposition to tariffs does not always translate into advocacy for free trade—but can easily morph into an argument for more protectionism, provided it’s the right kind of protectionism.

There is no such thing, but as long as the president is determined to use trade policy to pick winners and losers, every industry has an incentive to try to be on the side of the winners.

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The Logan Act is back in the news, and its invocation is as breathtakingly stupid as it has always been.

This time, President Donald Trump wants to use it against John Kerry, who has been meeting with Iranian officials to apparently attempt to somehow salvage vestiges of the nuclear agreement between them and the United States that Trump has backed out of.

The Logan Act makes it a federal crime for a private American citizen to engage in any communication or correspondence with a foreign government that intervenes in a dispute with the United States and that government in order to “defeat” any measures by the U.S.

The law has been around since 1799, yet nobody has ever been prosecuted for violating it (two people have been indicted but never prosecuted). Attempting to enforce the law would demonstrate just how thoroughly it violates the free speech rights of Americans.

Trump has complained about Kerry’s behavior on Twitter and to the press, saying Kerry is violating the Logan Act. On Monday, Sen. Marco Rubio (R–Fla.) sent a letter to Attorney General William Barr asking him to investigate whether Kerry’s behavior is indeed in violation.

Trump raising the specter of the Logan Act follows a very clear trend that goes all the way back to the law’s roots. The person or political party in control of American foreign policy wants to use it to punish a political opponent for openly speaking and attempting to influence foreign governments in ways they don’t like. In this case, the Trump administration is itching for war with Iran. Kerry is trying to prevent it.

This attempt to criminalize speech in the Logan Act was designed for the very purpose of punishing political opponents. In fact, the law was written back in 1799 in a situation much like this one, where a private American citizen, Philadelphia Quaker George Logan, attempted to negotiate with France to stop an undeclared sea war between the two countries. Logan’s actions pissed off the Federalist Party, and they pushed the bill through Congress.

The law’s roots are entirely political and are not based on any actual threat that speech between a citizen and foreign government would somehow undermine America’s foreign policies. The history of the Logan Act has entirely revolved around members of one political party trying to use it against another.

In fact, Trump’s presidential campaign has been on the other end of this nonsense as well. Back in 2017, experts in the Logan Act suggested that Mike Flynn, part of Trump’s post-election transition team, may have violated the law by discussing with a Russian diplomat potential responses to U.S. sanctions and a United Nations vote condemning Israeli settlements.

The invocation of the law was stupid then—particularly since Trump was preparing to take office and take control over the country’s foreign policy—and it’s just as stupid now. As I noted at the time, bringing up the Logan Act was clearly a way to try to get at Trump and those connected to him because proving corruption is hard and people were looking to grab anything they could to try to get him out of office. It didn’t work. Using it against Kerry won’t work, either.

I suspect nothing will come of this nonsense and it will get dropped. Part of me hopes the Justice Department will attempt to charge Kerry with violations of the Logan Act, if only so that the courts will toss the law out as unconstitutional. Instead, though, it will just sit around like this and periodically be used to insist to the public that political opponents are committing crimes by talking to and negotiating with foreign governments.

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