US Citizens Don’t Have First Amendment Rights If Noncitizens Don’t by David J. Bier, Cato at Liberty, April 15, 2025. Excerpt: I just had a disturbing conversation with a green card holder—a legal permanent resident of the United States. He had asked if he thought traveling internationally was wise for him as someone who has criticized President Trump and Israel and whether he should avoid any further criticism and/​or remove any past criticism from his social media before he travels. In a free society, the answer would be: “You should say whatever you want, criticize whoever you want, and not worry about traveling because the government cannot punish you for what you say.” But until the Supreme Court reaffirms that the First Amendment protects noncitizens in the United States from banishment for their speech—and until President Trump obeys the Supreme Court—we do not live in a free country. The Trump administration is revoking green cards and visas solely based on speech. Individuals are explicitly being targeted based on “beliefs, statements, or associations” that are “lawful within the United States” but which Secretary of State Marco Rubio has deemed “adverse to the foreign policy of the United States.” Even authoring an op-ed criticizing a foreign government’s foreign policy can now trigger visa revocation. The administration is also searching electronic devices at ports of entry for evidence of “adverse” views. DRH note: This is a very disturbing post, but I don’t think the title is completely justified. David Bier tries to justify the title by claiming that free speech includes the right for us to hear speech, but I think that’s a stretch. He’s on stronger ground with this paragraph: It is no surprise then that President Trump’s administration is threatening US citizens’ free speech rights in many other ways, such as threatening arrests of people who inform noncitizens of their constitutional rights, filing shakedown lawsuits against media companies, attacking law firms that defend unpopular clients, canceling contracts in states where governors have criticized Trump, threatening sanctions against media companies for negative coverage of him, banning disfavored media from the White House, and sanctioning federal contractors for use of the words “diversity, equity, or inclusion.”   Academia and Government By Steven Landsburg, The Big Questions, April 16, 2025. Excerpt: For decades, university administrators have somehow become adept at co-opting university resources to promote their personal social and political agenda. This has affected everything from hiring to course offerings to the funding and composition of athletic teams. Over time, much of this agenda has been encoded in federal mandates. When parts of this agenda have proven to be controversial or unpopular, administrators have largely avoided defending their policies on the merits, instead falling back on the federal mandates as an excuse. “Hey, we have no choice. We’d lose federal funding if we did anything different.” This dishonestly ignored the option of, for example, resisting intrusive policies through reasoned argument. Now, all of a sudden, the federal mandates no longer jibe so well with the personal agendas of the administrators, and equally all of a sudden, universities like Harvard are discovering backbones. I have mixed emotions about all this. It is good for universities (and everyone) to fight back against governments that tell them how to run their businesses. It is bad to fight back selectively, effectively collaborating with the government when it helps you co-opt university resources for your own agenda and then resisting when the government’s agenda starts to deviate from your own. Harvard should have fought back decades ago. Now they’re suddenly fighting back. Will they revert to form in a few years, as a function of who happens to be in the White House? And if so, is a sporadic backbone better or worse than no backbone at all? I’m not sure.   The Paperwork Reduction Act Created a Paperwork Explosion by Marina Nitze, Reason, April 16, 2025. Excerpt: Per the PRA, when a government agency wants to create or update an “information collection”—typically a form, though its grasp has extended to user logins and profiles, customer satisfaction surveys, and user research—the central Office of Information and Regulatory Affairs (OIRA) must approve it first. Approval involves completing forms about the form (which all require several layers of internal agency approval), then submitting that package to an agency’s “desk officer.” The desk officer’s job is to forward the package on to OIRA, a role that the Bobs of Office Space would certainly call into question. Desk officers often contract out this work, though, and prioritize their own efficiencies by submitting one enormous package once a year. A recent submission from the Forest Service contained 151 forms. Once OIRA receives the package, it (eventually) publishes it in the government’s newspaper, the Federal Register—a staple at every breakfast table. The proposal must be available for public comment for 60 days. The originating agency then compiles responses to any comments received, though it doesn’t have to actually do anything about them. OIRA reviews this package, and the proposal (whether changed or not) is reposted to the Federal Register for 30 more days. After an additional period of OIRA review, it might be approved. This can take years in the worst of circumstances.   Russia: An Unhealthy Population by Timothy Taylor, Conversable Economist, April 17, 2025. Excerpt: The welfare of a country’s population goes well beyond economic statistics, of course. In one classic example from 2006, Kevin Murphy and Robert Topel offered an attempt to meaure in economic terms the gains to the US population from greater life expectancy and disease reduction over time. Of course, this task requires choosing values for what an additional year of life is worth in dollar terms–always a controversial task. But the values are extraordinarily large. They wrote: We estimate the economic gains from declining mortality in the United States over the twentieth century, and we value the prospective gains that could be obtained from further progress against major diseases. These values are enormous. Gains in life expectancy over the century were worth over $1.2 million per person to the current population. From 1970 to 2000, gains in life expectancy added about $3.2 trillion per year to national wealth, with half of these gains due to progress against heart disease alone. Looking ahead, we estimate that even modest progress against major diseases would be extremely valuable. For example, a permanent 1 percent reduction in mortality from cancer has a present value to current and future generations of Americans of nearly $500 billion, whereas a cure (if one is feasible) would be worth about $50 trillion. Russia illustrates the opposite situation. It’s health statistics are remarkably poor, suggesting that the overall welfare of Russia’s population is considerably worse than its purely economic statistics would suggest. Nicholas Eberstadt provides the background in “The Russian Paradox: So Much Education, So Little Human Capital” (The American Enterprise, April 8, 2025).   Smaller Than a Grain of Rice: Engineers Develop World’s Smallest Pacemaker by Amanda Morris, SciTechDaily, April 17, 2025. Excerpt: Engineers at Northwestern University have developed an ultra-small pacemaker that is so tiny it can be injected into the body using a syringe. While it is compatible with hearts of various sizes, the pacemaker is especially well-suited for the delicate hearts of newborns with congenital heart defects. Smaller than a grain of rice, the device works in tandem with a lightweight, flexible, wireless wearable that attaches to the patient’s chest. When the wearable senses an irregular heartbeat, it automatically emits a pulse of light to activate the pacemaker. These brief light pulses pass through the skin, breastbone, and muscle tissue to regulate the heart’s rhythm.   (0 COMMENTS)

There is an endless list of ways we want to improve cities and help the poor. The list of problems plaguing poor communities is long. Every major US city has areas where the schools are terrible, crime is rampant, the sidewalks and streets are little more than rubble, fresh food is in short supply, and there are no parks or playgrounds to speak of. Helping people in this lowly state should be simple. Make the schools better. Hire more cops. Spread some concrete and asphalt. Start a farmer’s market. Build a playground. Simple, right? Not really. Amenities are expensive even when you don’t have to pay for them directly. Why? They make places nicer and, therefore, more attractive places to live. People like living in safe, walkable neighborhoods with great schools and parks, so holding everything constant, adding all these amenities to what are now low-income neighborhoods would make them more attractive to higher-income people who are willing to bid more to live in these newly improved parts of town. Holding everything else constant, nicer local amenities mean rents will rise and some people living in the neighborhood will be priced out.  Consider a family living in an apartment in a crime-ridden neighborhood with terrible schools and lousy public infrastructure. Our hearts bleed for them, and we want to do something to make their lives easier. So we do all the stuff listed above. Now, many more people want to live in the family’s apartment, and unless they can come up with the money to pay the higher rent, they will be priced out of the neighborhood. Counterintuitively, the winners from all these improvements are not the families occupying these apartments but their landlords, who now earn higher rent. People may not pay for parks and schools directly, but they will pay for them indirectly because higher rent and real estate prices will reflect their value. People might raise a lot of objections. Why not pass a law saying landlords can’t charge higher rent or evict tenants? There’s the obvious problem of creating a housing shortage, and if people can’t compete for artificially scarce apartments by paying higher prices, they will compete by accepting lower quality. The Swedish economist Assar Lindbeck said that rent control is the most effective way to destroy a city short of bombing it. The history and effects of rent control in the US and elsewhere confirm his observation. From my time writing commentaries like these and arguing online, I’m sure many people would object to this argument with righteous indignation. “Are you saying the poor don’t deserve good schools in safe neighborhoods? Their children don’t deserve the nice public parks you see in richer suburbs? I can’t believe you would be so callous! So cruel!” I would reply, “I can’t believe that someone so well-trained in critical thinking would so clearly miss the point.” Economic arguments like these have nothing to do with what people deserve or even the kind of world we want to see. I’m sure there are a few sadists out there who enjoy watching the poor suffer–”the cruelty is the point,” as I’ve seen people criticize efforts to roll back well-intentioned progressive policies–but they’re fewer and farther between than you think. I’ve never heard anyone say, “It’s right that they should suffer!” at the annual meeting of the free market-loving Association of Private Enterprise Education. No one is arguing that there is anything morally embiggening about lives of poverty and squalor. I don’t know anyone who wouldn’t push a button that would magically eliminate poverty. However, as the great Thomas Sowell has explained, we’re usually arguing at cross purposes, with the economists asking not about what is or is not desirable but about the likely consequences of social processes we are setting in motion. When we try to help people by doing just about anything other than just giving them money, it’s anything but clear that we will succeed–and instead of helping the people we want to help, we end up enriching their landlords. The economist John Cochrane has a line that has stuck with me since I first read it: don’t try to redistribute income by fiddling with prices, and providing gratis parks and schools is one way to fiddle with prices. The outcome needn’t be a disaster, but it’s not clear it makes people better off. (1 COMMENTS)

  America’s prosperity is today, as it has always been, rooted in principles of entrepreneurship and voluntary economic exchange. For 250 years, the United States of America has demonstrated to the world that a people left free to innovate and produce for themselves, and for all who trade with them, will enjoy increasing abundance, higher standards of living, and greater security both economically and militarily. Since taking office in 2025, the Trump Administration has adopted steep protective tariffs by unilateral executive decrees. These measures have injected uncertainty and chaos into the global economy through wildly fluctuating rates and ever-changing orders. Cumulatively, they impose the largest tax increase on trade in almost a century. The proponents of tariffs portray these measures as acts of ‘economic liberation.’ Instead, tariffs invert the principles of liberty that ushered in an American-led age of human freedom and prosperity. America’s Founding Fathers rejected the bestowing of political favors and the imposition of Mercantilism. In his instructions to Virginia delegates to the Continental Congress in 1774, Thomas Jefferson urged them to stand for the American colonists’ right to “the exercise of a free trade with all parts of the world.” Two years later, the Declaration of Independence enumerated the causes that impelled those colonies to revolution, among them a protest against King George III “For cutting off our trade with all parts of the world.” This is from “Trade and Tariffs Declaration: A Statement on the Principles of American Prosperity.” Some economists led by Don Boudreaux and Phil Magness put it together. My contribution was to find a few typos and to get 3 of the main economists listed, and one of the others further down on the list, to sign. Read the whole thing. You can also sign on if you’re a bona fide economist. Some other academics, e.g., in philosophy, history, and political science, are also listed. If you aren’t in the categories above, you can support without being listed.   By the way, usually when I sign such statements, I pretty much know everything in them before reading them. But one big surprise I got was to learn the number in the following: The American economy is a global economy that uses nearly two thirds of its imports as inputs for domestic production.   (1 COMMENTS)

Almost any economic change produces winners and losers.  Ride share companies hurt the taxi industry.  In the future, Waymo may undercut the ride share companies.  Imports of inexpensive sneakers from China hurt the US shoe making industry.  And now we discover that San Francisco’s recent crackdown on street crime also produces negative consequences for some businesses: Back in 1850, the French economist Frédéric Bastiat had this to say about the consequences of broken windows: Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade – that it encourages that trade to the amount of six francs – I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, “Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen.”It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented. Bastiat also applied this lesson to international trade.  Those who argue that trade hurts the economy are making the same mistake as those who argue that broken windows help the economy.  They ignore “that which is not seen.” Some people complain that economists are out of touch when they advocate reducing street crime.  Glass repair shops provide lots of good paying jobs for blue-collar workers, jobs that allow them to support a family.  We sit in our ivory towers and dream up theories of creative destruction, not understanding the human cost of our policies.  What are these unemployed glass repairmen supposed to do for a living—become hamburger flippers? I plead guilty.  In the end, I’d prefer a society that has both cars with intact windows and hamburgers over a society with no hamburgers and car windows that must frequently be repaired.  If you look around the world, the highest living standards are in places with the highest productivity—countries like Switzerland (which has zero tariffs and not much crime.) BTW, you might think that no one seriously believes it is acceptable to break windows.  Unfortunately, that is not true: And as Matt Yglesias recently observed, leftists are not the only people that wish to defund the police: But as conservatives know when it comes to anything other than tax crime, the consequences of going soft on crime can spiral. At first, a few more people start getting away with cheating on their taxes. Then because more people are getting away with it, even more people start cheating. Then we have fewer tax cops chasing a larger number of tax crimes, and the odds of detection go down further. The next thing you know, America’s high level of voluntary compliance with the tax laws has collapsed and we’re in a Greece-like situation. Simply starving the government of tax revenue doesn’t do anything to alleviate the fiscal burden of an aging population or of growing tensions with China. You’re just piling on debt and hurting the economy. (1 COMMENTS)

The economic case for submitting political power (“government”) to general laws that it must itself obey is, at bottom, simple: to blunt the incentives of rulers to become despotic or tyrannical toward a portion of the ruled. (They can’t tyrannize all the ruled because they need supporters and praetorians of different sorts.) Only those confident that they will be among the exploiters rather than the exploited could disagree with this benefit of the law. Two quotations from two different epochs and political systems can illustrate the point. The first comes from economist Mancur Olson (in his book Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships [Basic Books, 2000], pp. 39-40): Sometimes, when leading families or merchants organized a government for their city, they not only provided for some power sharing through voting but took pains to reduce the probability that the government’s chief executive could assume autocratic power. For a time in Genoa, for example, the chief administrator of the government had to be an outsider—and thus someone with no membership in any of the powerful families in the city. Moreover, he was constrained to a fixed term of office, forced to leave the city after the end of his term, and forbidden from marrying into any of the local families. In Venice, after a doge who attempted to make himself autocrat was beheaded for his offense, subsequent doges were followed in official processions by a sword-bearing symbolic executioner as a reminder of the punishment intended for any leader who attempted to assume dictatorial power. As the theory predicts, the same city-states also tended to have more elaborate courts, contracts, and property rights than most of the European kingdoms of the time. As is well known, these city-states also created the most advanced economies in Europe, not to mention the culture of the Renaissance. As an aside, the executed doge was Marino Faliero (1274-1355). In the Hall of the Great Council where his portrait should have stood among the other doges, a black cloth stands bearing the inscription: Hic est locus Marini Faletro decapitati pro criminibus This is the space for Marino Faliero, beheaded for his crimes The second announced quotation is far from the 14th and 15th centuries and much closer to us. Ours is a time when individual liberty and the rule of law are supposedly better established, but what could happen if the government is permitted to disobey the Constitution? The April 17 scathing decision of three judges of the Fourth Circuit Court of Appeals, signed by Judge J. Harvie Wilkinson, provides an answer. The Court blames the administration for doing nothing to correct its egregious “administrative error” of sending Albrego Garcia to a barbaric prison in El Salvador, without due process and in defiance of a previous court order. The Wall Street Journal reports (“Court Scolds Trump Administration for ‘Shocking’ Response to Deportation Error,” April 18, 2025): “This should be shocking not only to judges, but to the intuitive sense of liberty that Americans far removed from courthouses still hold dear,” Wilkinson wrote. “If today the Executive claims the right to deport without due process and in disregard of court orders, what assurance will there be tomorrow that it will not deport American citizens and then disclaim responsibility to bring them home? And what assurance shall there be that the Executive will not train its broad discretionary powers upon its political enemies? The threat, even if not the actuality, would always be present, and the Executive’s obligation to ‘take Care that the Laws be faithfully executed’,” he wrote, quoting the Constitution, “would lose its meaning.” The only way the law can bind the rulers, if there is any way, is that it be interpreted by judges (with an appeal process up to a final court) and that government agents and elected officials, in the executive and the legislative, from the most humble one to the most pretentious, be conscious of their duty to uphold the Constitution and thus obey court orders. Real judges (as opposed to “administrative judges”) are independent and not properly government agents. Their role is purely reactive—they only intervene when a party feels aggrieved and calls on them to apply the law. (Friedrich Hayek’s Law, Legislation, and Liberty, especially Volume 1, is essential reading about judges.) We live in exciting, educational, and dangerous times. ****************************** A doge in Venice followed by his symbolic executioner c. 1400, according to ChatGPT (0 COMMENTS)

  A few weeks ago, I watched a movie from 1943 titled Watch on the Rhine. It starred Bette Davis and Paul Lukas. I highly recommend it. I won’t say much about the plot because it develops as it goes and to say much would be to give away too many spoilers. Here’s the Wikipedia write-up for those who are impatient. It takes place in 1940 in Washington, D.C. or its suburbs, when the U.S. is not yet explicitly at war with Germany. I noted two things that highlight the loss of two of our important economic freedoms. First, one of the characters needs to carry a great deal of money with him: $20,000, which would translate to over $400,000 today. Yet he doesn’t worry about being stopped by police and facing almost certain asset forfeiture. Second, someone calls an airline to get one of the characters a flight to Mexico. She gives the name Ritter. That’s not his real name. But wouldn’t they figure that out when he checked in by comparing that name with the name on his ID? No. There was no such check. It isn’t just that in 1940, people had freedom to carry large sums of money and freedom to travel without being ID-checked. I first travelled on an airline in the summer of 1969, when I flew from Winnipeg to Chicago to attend a conference in Rockford, Illinois. I didn’t carry large sums of money but I could have. Also, no one checked my ID. I just gave my name to the Northwest Orient ticket guy in Winnipeg, who wrote it out.   Interesting fact: Lillian Hellman, the author of the play, may have been a Communist. Dashiell Hammett, the screenwriter, was a Communist. Why is that interesting? Here’s what Wikipedia says: Hellman wrote Watch on the Rhine in 1940, following the Nazi-Soviet Non-Aggression Pact of August 1939. The play’s call for a united international alliance against Hitler directly contradicted the Communist position at the time. Its title comes from a German patriotic song, “Die Wacht am Rhein“. Good for her. Dashiell Hammett would have had no trouble writing the screenplay because he did so in 1942, after the Communist Party had turned against Hitler. (0 COMMENTS)

Commenting on this post, commentor Warren Platts writes (emphasis added):   You economists can debate amongst yourselves about how trade deficits don’t matter. But your debates  are what don’t matter now. Now we need to just get this done, come hell or high water. Your job now, as an experienced economist, is to tell us how to get this done.   His comment leads to an interesting question: what is the role of the expert?  Is the role just to tell the non-expert how to get whatever the non-expert wants done?  I argue that the answer is “no.”  The expert should advise, not merely comply.  The decision-making process should be collaborative, not dictatorial.  The non-expert may have some goals in mind, but the expert should be active in helping the non-expert decide: 1) what goals are actually achievable (as opposed to merely possible), 2) what goals are desirable, and (assuming agreement upon 1 and 2), 3) how to achieve said goals.  In other words, in order to avoid expert failure (that is, the advice of the expert not achieving the desired results), both the expert and the non-expert should be active in the decision-making process.   In his 2018 book Expert Failure, Roger Koppl sets out a taxonomy of expert failure (see Table 10.1, page 190).  One of the conditions he discusses, where the expert decides for the expert and there is only one expert, can lead to the “Rule of Experts.”  Under the Rule of Experts, we are most likely to get expert failure.  There are few checks in the process to ensure the opinion being sold is actually desirable and useful.  Most notably, the non-expert cannot push back; the expert makes the decisions for the non-expert.  Contestation is a vital check in the information-generation process to ensure the opinion generated is actually useful. But, since any transaction is reciprocal, we can consider an inverse scenario where there is a monopsony for expert opinion.  That is, there is only one buyer.  Just like the non-expert’s ability to push back against the advice of the expert is essential to reduce the probability of failure, so is the expert’s ability to push back on the non-expert.  There must be dialogue between the two parties: a fair, free, and reciprocal discussion.  A monologue, where one party simply dictates the terms, is a recipe for disaster.  A few months ago, I wrote about how such monopsony power can lead to experts becoming mere mouthpieces.  Indeed, we have seen the disasterous consequences of this monopsony over the past few weeks as the Trump Administration wiped out about $6 trillion in American wealth in just a few short days thanks to extraordinarily bad advice on trade. I have been lucky in my relatively-short career to be an advisor to private companies, governments, and lawyers.  In each of these, before any contract is signed, I sit down with the prospective client to discuss needs and expectations.  I lay out what they are buying from me: advice and opinion.  If an idea or policy is bad, I will say so.  If a goal is bad, I will say so.  If they push, I will walk away.  Most clients understand this point.  If they already had a goal or policy in mind, they wouldn’t need an expert.  They are looking for advice.  But, I have had a few clients who insist they want me to come up with a model or line of reason to support their views.  I have walked away from those deals.   So, I reject the argument that it is the job of the expert to do whatever the non-expert wishes, “come Hell or high water.”  Rather, we should avoid Hell and high water, not cause them.  If the non-expert is intent on destroying themselves, the expert should have no part of that.  Or, as is the case of Trump’s trade war, the action will cause widespread harm to millions of people, the expert has a solemn duty to stop it, rather than give legitimacy to the action. PS: There is no serious debate among economists whether trade deficits matter.  They don’t.  Economists are quite universally agreed upon that point.  There are always some dissenters, but that doesn’t mean there is a debate.  Just like there is no debate among astronomers that the world is actually a sphere.  Sure, you’ll get the occasional one who will insist the world is flat, but that doesn’t mean there is a debate in any meaningful sense. (0 COMMENTS)

Join Us! Does the thought of malicious HALs keep you up at night? Are you already on a waiting list for AI implants? Are you skeptical of the modern tendency to make things binary to generate false controversies and erase nuance? Our upcoming virtual reading group is perfect for you! We took inspiration from Russ Robert’s EconTalk archives and this crazy, fast-moving technoscape all around us and put together readings and listenings for curious conversationalists.   What to Expect 3 distinct sessions: 2 are asynchronous; 1 is on Zoom. Come to one or all! Podcasts to listen to (or read transcripts of) paired with short articles A knowledgeable and welcoming discussion leader: Dr. Joy Buchanan Opening questions, respectful participants, challenging ideas, and maybe new friends Special guest Russ Roberts at our final meeting Meeting Details Session 1: May 5-9 in the Liberty Fund Portal space Session 2: May 12-16 in the Liberty Fund Portal space Session 3: Wednesday, May 21; 2-3:30 pm eastern on Zoom   How to Join If you are already a member of the Liberty Fund Portal space, you can find details here:  https://libertyfund.circle.so/c/timeless-artificial-intelligence-doom-or-bloom If you aren’t yet a member, you can follow the prompts to sign up at the above link.  If you have any questions, please contact Christy Lynn Horpedahl at chorpedahl@libertyfund.org   Session Details Week 1: A Timeless Reading Group: AI Doom Part I of the series “Artificial Intelligence: Doom or Boom?” An asynchronous discussion, with an emphasis on possible negative outcomes from AI, such as unemployment, social disengagement, and existential risk. Participants will be invited to suggest special topics for a separate session that will be held on Zoom on May 21, 2025, 2:00-3:30 pm EDT.  EconTalk: Eliezer Yudkowsky on the Dangers of AI (2023) EconTalk: Who’s Afraid of Artificial Intelligence? (2025) “Trurl’s Electronic Bard” (1965) by Stanisław Lem. In this prescient short story, a scientist builds a poetry-writing machine. Sound familiar? (If anyone participated in the Life and Fate reading club with Russ Roberts and Tyler Cowen, there are parallels between Lem’s work and Vasily Grossman’s “Life and Fate” (1959), as both emerged from Eastern European intellectual traditions during the Cold War.)   Week 2: A Timeless Reading Group: AI Boom Part II of the series “Artificial Intelligence: Doom or Boom?” An asynchronous discussion, with an emphasis on benefits of AI, including increased economic growth and new discoveries. Participants will be invited to suggest special topics for a separate session that will be held on Zoom on May 21, 2025, 2:00-3:30 pm EDT.  EconTalk: Marc Andreessen on Why AI Will Save the World  EconTalk: Reid Hoffman on Why AI Is Good for Humans Week 3: AI Common Room Part III of the series “Artificial Intelligence: Doom or Boom?” A virtual meeting on Zoom, May 21, 2025, 2:00-3:30 pm eastern, with special topics including teaching. Great Antidote podcast with Katherine Mangu-Ward on AI: Reality, Concerns, and Optimism. TBD based partially on previous sessions’ participants’ suggestions (0 COMMENTS)

Everybody in America who ever wanted a powerful government to do good should now be happy, for he got his wish. Too bad for half the voters who have different conceptions of the good—their personal good or the “social good”! A government powerful enough to do good is also powerful enough to do bad. A government powerful enough to decide under what conditions its subjects may trade is powerful enough to seriously disturb or ban their trading, internationally or domestically. A government powerful enough to financially support universities is also powerful enough to threaten them with penalties if they don’t repress opinions it does not like. A ruler powerful enough to define emergencies is powerful enough to increase his power with fabricated emergencies. A government powerful enough to require conformity to an ideology, say DEI, is powerful enough to forbid private institutions to embrace it or parts of it. A government powerful enough to ship non-citizens to a barbaric prison in El Salvador without due process is probably powerful enough to do the same to its own citizens. And so forth. On the last point, note what Donald Trump said (“El Salvador’s Bukele Says He Doesn’t Have Power to Return Mistakenly Deported Man,” Wall Street Journal, April 14, 2025): Trump also said he would be open to deporting U.S. citizens to the [El Savador Cecot] prison “if they’re criminals,” which legal experts say would be unconstitutional. Trump said he asked [Attorney General Pam] Bondi to look into the legal implications of such a move. “Homegrowns are next,” he told [El Salvador president Nayib] Bukele, referring to American criminals. “You gotta build about five more places.” Bukele replied “We’ve got space.” Limits to government as conceived by James Buchanan, Gordon Tullock, and the school of Constitutional Political Economy are precisely meant to prevent the state from growing into Leviathan. Friedrich Hayek’s more tradition-based theory also proposes strict limits. In fact, constraining the state represents the thrust of the whole classical liberal and libertarian tradition. The numerous congressmen, presidents, and (yes) judges who have forgotten that tradition should now realize how important it is. The game is not over, and we can still entertain some hope. But in the current circumstances, when personal loyalty and fealty replace respect for constitutional rules in the highest reaches of government, we can probably count only on judges, independent institutions, and state governments, not on federal politicians nor rationally ignorant voters. Public opinion can move quickly, though, and the midterms, which usually go against the incumbent party, could help. Many individual Americans retain a sense of individual liberty, many government employees show personal integrity, and a free press can counterbalance official propaganda. Yet, in modern societies, despotism often happens gradually: most people realize that they are living under an elected despot once he is already entrenched. (See “You Didn’t See It Coming,” my review of Cass Sunstein (Ed.), Can It Happen Here? in the Winter 2018-2019 issue of Regulation, pp. 54-57.) In the Sunstein book just cited, Tyler Cowen argues that dictatorship is unlikely in America because its federal government is too “large and unwieldy.” It is too big to be controlled by anyone: “Big government is useful precisely for (among other reasons) helping to keep government relatively small” (Cowen’s emphasis). This apparent paradox may be deflated by the experiment that is currently going on in America: it may show that such a government can be taken over by a bully with no ideology, no respect for prevalent rules, and no compunction about using and threatening to use the brute force of government. We should soon see if what remains of classical-liberal institutions can stop Leviathan. (Distressingly, Anthony de Jasay believed, contrary to Buchanan or Hayek, that limited government is impossible.) ****************************** The government you wished for, by ChatGPT (asked to illustrate this specific post) (0 COMMENTS)

Josh Hendrickson has a new Substack post that discusses the implications of the US dollar’s role as an international reserve currency. This caught my eye: When you are taught a typical model of international trade with flexible exchange rates, discussion of the balance of trade goes something like this. If a country runs persistent trade deficits, its currency will begin to depreciate. The depreciation of the currency makes foreign goods more expensive. This tends to reduce imports and push the country toward balanced trade. The basic point here is that a typical textbook argument is that flexible exchange rates adjust to the balance of trade and these adjustments tend to reduce the trade deficit and push the country towards balanced trade.By contrast, the U.S. runs persistent trade deficits that do not self-correct. In fact, many times, the dollar appreciates while the U.S. is running trade deficits. How can we explain this phenomenon?The reason that the U.S. is different is that the dollar is the primary currency used in global trade. Two comments: The US isn’t different. Josh Hendrickson should get a new textbook. Here’s the US current account as a share of GDP: Now let’s look at Great Britain: Unfortunately, the British FRED series ends in 2016 and is in money terms, not share of GDP.  However, another source confirms the UK current account deficits have continued at roughly 3% of GDP. And here’s New Zealand: And here’s Australia: In fairness, a more recent Fred series shows a brief period of surplus, before returning to deficit in 2024: In fact, the US is fairly typical of English-speaking countries that draw a lot of immigration—it runs fairly persistent deficits.  The outlier is Canada, which ran current account surpluses from 1999-2008, but even they have seen current account deficits for the past 16 years, and 52 of the past 65 years. A current account balance merely reflects the difference between saving and investment; there’s no reason why it cannot continue indefinitely.  It may be associated with excessive borrowing, especially excessive government borrowing, but that is not always the case. (Australia tends to have small budget deficits.)   The US current account deficits are probably caused by the same sort of factors that explain current account deficits in other English-speaking countries: low saving rates, highly productive capital investments and high rates of immigration.  I see no evidence that the dollar’s role as a reserve currency plays much of a role, unless you believe that the New Zealand dollar is also an important reserve currency. Hendrickson continues: The short answer is that other countries have to be net importers of dollars and therefore net exporters to the U.S. What this implies is that the U.S. must run persistent trade deficits with the rest of the world in order to provide the world with dollars. This is not accurate.  A current account deficit is not a net flow of dollars; it is a net flow of assets.  We could pay for imports by selling real estate or equities or junk bonds.  A foreign country could accumulate US dollar reserves (Treasuries) by selling assets like stocks or real estate or foreign government bonds. The US current account deficit reflects the discrepancy between domestic saving and domestic investment.  The US is not “forced” to run a deficit, even with the dollar serving as an international reserve currency. I don’t worry about current account deficits, but if the Trump administration wishes to address the issue then they should consider reducing the government budget deficit (which is negative saving.)  Instead, they are planning to enact a giant tax cut.  A recession might also reduce the current account deficit, by reducing domestic investment. PS.  I’m not certain why Australia’s current account has recently become more positive; perhaps it reflects a cultural change associated with extensive immigration from (high saving) Asian nations.  But that doesn’t explain Canada. (1 COMMENTS)