30 Nov 2016

Economists Critique Trump’s Industrial Policy

Trump, Tyler Cowen 58 Comments

On Thanksgiving, while most Americans were drinking beer and watching football, Donald Trump was hard at work keeping jobs in America!!

When word came out that the company Carrier would in fact keep its operations in Indiana, rather than outsourcing, naturally the Trump forces claimed victory. But Justin Wolfers on Twitter was horrified:

Notice he got 6,400+ retweets. Obviously, lots of Trump critics agreed with Wolfers’ assessment.

Then along comes Tyler Cowen, who had this to say about the affair in Bloomberg:

When an American company “moves jobs to Mexico,” it doesn’t disassemble a factory and load all of the parts onto border-crossing trucks. That might be relatively easy to stop. Instead, the company closes or limits some U.S. production while expanding or initiating new production south of the border. Given that reality, how is government supposed to respond?

Perhaps most importantly, a policy limiting the ability of American companies to move funds outside of the U.S. would create a dangerous new set of government powers. Imagine giving an administration the potential to rule whether a given transfer of funds would endanger job creation or job maintenance in the United States. That’s not exactly an objective standard, and so every capital transfer decision would be subject to the arbitrary diktats of politicians and bureaucrats. It’s not hard to imagine a Trump administration using such regulations to reward supportive businesses and to punish opponents. Even in the absence of explicit favoritism, companies wouldn’t know the rules of the game in advance, and they would be reluctant to speak out in ways that anger the powers that be.

Another good argument, right?

Now notice something interesting. If you hate Trump, and especially if you’re an economist, I bet you nodded your head at *both* Wolfers’ critique and Cowen’s.

And yet, they are saying opposite things. They can’t both be right. (Wolfers is saying Trump just opened up a new subsidy for domestic manufacturers, such that they’ll even *fake* that they want to outsource. Cowen is saying Trump just opened up a new method of oppressing domestic manufacturers.) If you thought they both showed different reasons that Trump’s behavior is dumb, then you suffer from confirmation bias.

P.S. I think Trump’s behavior vis-a-vis Carrier is dumb. But I at least have enough introspection to realize that Wolfers and Cowen can’t simultaneously be right.

30 Nov 2016

Lara-Murphy Show on *The City of God*

Lara-Murphy Show 1 Comment

Sorry for the hiatus, my travel schedule the last two months has been pretty crazy. Carlos and I have released another episode of our podcast. It’s definitely not your usual fare; we talk about his latest reading, Augustine’s *The City of God*.

29 Nov 2016

The WaPo’s Absurd Conspiracy Theory About Conspiracy Theorists

Politics 10 Comments

Everybody and his brother has made fun of this recent WaPo piece. In case you missed it, here’s the punchline:

The flood of “fake news” this election season got support from a sophisticated Russian propaganda campaign that created and spread misleading articles online with the goal of punishing Democrat Hillary Clinton…say independent researchers who tracked the operation.

Russia’s increasingly sophisticated propaganda machinery — including thousands of botnets, teams of paid human “trolls,” and networks of websites and social-media accounts — echoed and amplified right-wing sites across the Internet as they portrayed Clinton as a criminal hiding potentially fatal health problems and preparing to hand control of the nation to a shadowy cabal of global financiers…

Two teams of independent researchers found that the Russians exploited American-made technology platforms to attack U.S. democracy at a particularly vulnerable moment…The sophistication of the Russian tactics may complicate efforts by Facebook and Google to crack down on “fake news,” as they have vowed to do after widespread complaints about the problem.

But now for my contribution to the discussion. Others have alluded to the hypocrisy, but I don’t recall seeing someone literally quote the following:

The Russian campaign during this election season, researchers from both groups say, worked by harnessing the online world’s fascination with “buzzy” content that is surprising and emotionally potent, and tracks with popular conspiracy theories about how secret forces dictate world events.

Just read that above quotation again. Is it not delicious? Did the WaPo writer realize he was doing that? I can’t decide which answer I prefer.

29 Nov 2016

Scott Alexander on Trump’s Alleged Racism

Trump 65 Comments

Someone posted this long post (is there any other kind?) from Scott Alexander in the comments a while ago. It is a simply PHENOMENAL refutation of what “everybody knows” about Trump being a flaming racist.

I didn’t read it until I was on a business trip and was stuck with my conscience and my phone (so I turned to my phone, naturally). But it was way better than I thought it would be, and it even keeps getting better in the post itself. Some excerpts:

This is just a tiny representative sample, but the rest is very similar. Trump has gone from campaign stop to campaign stop talking about how much he likes and respects minorities and wants to fight for them.

And if you believe he’s lying, fine. Yet I notice that people accusing Trump of racism use the word “openly” like a tic. He’s never just “racist” or “white supremacist”. He’s always “openly racist” and “openly white supremacist”. Trump is openly racist, openly racist, openly racist, openly racist, openly racist, openly racist, openly racist. Trump is running on pure white supremacy, has thrown off the last pretense that his campaign is not about bigotry, has the slogan Make American Openly White Supremacist Again, is an openly white supremacist nominee, etc, etc, etc. And I’ve seen a few dozen articles like this where people say that “the bright side of a Trump victory is that finally America admitted its racism out in the open so nobody can pretend it’s not there anymore.”

This, I think, is the first level of crying wolf. What if, one day, there is a candidate who hates black people so much that he doesn’t go on a campaign stop to a traditionally black church in Detroit, talk about all of the contributions black people have made to America, promise to fight for black people, and say that his campaign is about opposing racism in all its forms? What if there’s a candidate who does something more like, say, go to a KKK meeting and say that black people are inferior and only whites are real Americans?

We might want to use words like “openly racist” or “openly white supremacist” to describe him. And at that point, nobody will listen, because we wasted “openly white supremacist” on the guy who tweets pictures of himself eating a taco on Cinco de Mayo while saying “I love Hispanics!”

and

So the mainstream narrative is that Trump is okay with alienating minorities (= 118 million people), whites who abhor racism and would never vote for a racist (if even 20% of whites, = 40 million people), most of the media, most business, and most foreign countries – in order to win the support of about 50,000 poorly organized and generally dysfunctional people, many of whom are too young to vote anyway.

Caring about who the KKK or the alt-right supports is a lot like caring about who Satanists support. It’s not something you would do if you wanted to understand real political forces. It’s only something you would do if you want to connect an opposing candidate to the most outrageous caricature of evil you can find on short notice.

and make sure you consider this angle, if you dislike Trump and are really really sure he’s not just a jerk, but also a racist:

I don’t think people appreciate how weird this guy is. His weird way of speaking. His catchphrases like “haters and losers!” or “Sad!”. His tendency to avoid perfectly reasonable questions in favor of meandering tangents about Mar-a-Lago. The ability to bait him into saying basically anything just by telling him people who don’t like him think he shouldn’t.

If you insist that Trump would have to be racist to say or do whatever awful thing he just said or did, you are giving him too much credit. Trump is just randomly and bizarrely terrible. Sometimes his random and bizarre terribleness is about white people, and then we laugh it off. Sometimes it’s about minorities, and then we interpret it as racism.

Before closing, I have to mention one thing. In his zeal to prove how non-anti-Semitic Trump is, Scott Alexander gives a throwaway remark about Pat Buchanan:

Listen. Trump is going to be approximately as racist as every other American president. Maybe I’m wrong and he’ll be a bit more. Maybe he’ll surprise us and be a bit less. But most likely he’ll be about as racist as Ronald Reagan, who employed Holocaust denier Pat Buchanan as a senior advisor. Or about as racist as George Bush with his famous Willie Horton ad. Or about as racist as Bill “superpredator” Clinton, who took a photo op in front of a group of chained black men in the birthplace of the KKK.

Unfortunately, here Alexander has fallen prey to the same type of slander that says Trump is “openly white supremacist.” Here’s Wikipedia’s treatment of (part of) Buchanan’s book, Churchill, Hitler, and the Unnecessary War:

Buchanan claims that Hitler’s ambitions were confined only to Eastern Europe, and citing such historians as Ian Kershaw, Andreas Hillgruber and Richard J. Evans, states that Hitler wanted an anti-Soviet alliance with Britain.[46] Buchanan maintains that British leaders of the 1930s were influenced by “Germanophobia”, leading them to suspect that Germany was out to conquer the world.[47] Citing John Lukacs, Buchanan maintains that Operation Barbarossa was not part of any long-range master plan on the part of Hitler, but was instead an attempt by Hitler to force Britain to make peace by eliminating Britain’s last hope of victory – bringing the Soviet Union into the war on the Allied side.[48] Buchanan argues that the Holocaust only developed the scale it did because Hitler’s invasion of Poland and then Russia meant that he had within his control most European Jews, which would not have been the case otherwise. Buchanan argues that if Churchill had accepted Hitler’s peace offer of 1940, the severity of the Holocaust would have been immensely less.

Now let me ask you two questions:

(1) Does the above count as “Holocaust denial”?

(2) Can you totally see how some people would smear Buchanan as a “Holocaust denier” because of the above?

You’ve started down a great path, Mr. Alexander…keep walking.

P.S. This post was inspired by a libertarian whom I shared Alexander’s post with, but I don’t know if he wants me naming him.

28 Nov 2016

Liberty Classroom CYBER MONDAY Special

Tom Woods 2 Comments

(Don’t worry, if you ordered based on my Black Friday post at the “Master” level, then I’ll retroactively give you this bonus too. I’ll be in touch, but if you don’t hear from me in a few days, feel free to email me to make sure.)

OK I have been informed that there is still special Liberty Classroom discount pricing through tonight (Cyber Monday), ending at 11:59pm Pacific time. Use this link to order with me as the affiliate.

If you order the “Master” subscription, then as an added bonus I’ll mail you signed copies (made out to whomever you want) of:

(1) My book *Choice* which outlines Mises’ Human Action

and

(2) My book (co-authored with Doug McGuff) *The Primal Prescription* which explains what the heck happened with U.S. health care / insurance, and gives strategies for seceding from the system. Lots of predictions about ObamaCare in this book which are coming to pass before our very eyes (unfortunately).

So click this link to order your Master subscription to Liberty Classroom! There are great lectures on history, politics, and economics, from Tom, me, and other teachers. My Part II on the History of Economic Thought is coming in 2017.

P.S. There are different tiers of membership. To avoid confusion: This special offer from me about getting two signed books is only applicable to the “Master” level.

P.P.S. I have plenty of copies of *Choice* on hand, but depending on demand I might have a lag in getting the *Primal* books out. If you want to direct them to recipients for Christmas presents, that should be fine, but I’m just warning there might be a lag on the *Primal* books.

24 Nov 2016

Reactions to the Trump Victory: F

Trump 8 Comments

I fell away from my educational responsibilities and didn’t give out the final grade. Earlier I gave Will Rahn of CBS News an A+ for his soul-searching as a journalist, reflecting on how they had condescended to Trump supporters. I also gave Scott Sumner a B, since he admitted explicitly in several posts (both at his blog and at EconLog) that he had been totally wrong about Trump, but then I detected him backtracking a bit in a way that didn’t really work.

Today I called up the Registrar and let her know that I am assigning an “F” to George Will. His utter refusal to admit error, despite being devastatingly wrong, is something to behold.

I don’t want to belabor what is (perhaps) an inconsequential point, but let me give just a taste of Will’s #NeverTrump stance before the election.

==> In April, Will had already made it clear that he detested Trump and had been telling conservatives they should have nothing to do with the guy. But Will made a broader appeal to the GOP, saying that Trump was so radioactive that he would hurt Republicans in other races too:

Donald Trump’s damage to the Republican Party, although already extensive, has barely begun….

Trump would be the most unpopular nominee ever, unable to even come close to Mitt Romney’s insufficient support among women, minorities and young people. In losing disastrously, Trump probably would create down-ballot carnage sufficient to end even Republican control of the House

At least half a dozen Republican senators seeking reelection and Senate aspirants can hope to win if the person at the top of the Republican ticket loses their state by, say, only four points, but not if he loses by 10. A Democratic Senate probably would guarantee a Supreme Court with a liberal cast for a generation…

Were he to be nominated, conservatives would have two tasks. One would be to help him lose 50 states — condign punishment for his comprehensive disdain for conservative essentials, including the manners and grace that should lubricate the nation’s civic life. Second, conservatives can try to save from the anti-Trump undertow as many senators, representatives, governors and state legislators as possible.

==> Months later, after Trump had secured the nomination, Will hadn’t changed his tune. Here is his assessment from October 26–a little less than two weeks before the election:

Much ink and indignation has been spilled concerning whether Donald (“I am much more humble than you would understand”) Trump will “accept” the election’s outcome. The nation, like the universe of which it is the nicest part, will persevere even without the election result being accepted by the fellow who probably will be the first major-party presidential nominee in 20 years to receive less — probably a lot less — than 45 percent of the vote.

…This year’s winner is unlikely to become just the fourth nominee of the world’s oldest party (following Jackson, Franklin D. Roosevelt and Lyndon B. Johnson) to win more than 53 percent. The loser, however, could plunge close to the 37.4 percent that George H.W. Bush received in 1992 when Ross Perot took 18.9 percent of the vote.

This year’s winner probably will be the first Democrat since Grover Cleveland to become president without enjoying Democratic control of both houses of Congress….This year will be the fourth of a particular kind of Republican disappointment since World War II. In 1946, 1994, 2010 and 2014 Republicans won huge victories in off-year elections but two years later lost the presidential election…

The last Democrat directly elected (that is, not counting Truman or Johnson, who were elected after inheriting the office) to succeed a Democrat was James Buchanan, arguably the worst president ever. One hundred and sixty years later, Republicans fearing four Clinton years can reasonably hope there will be no more than four: The likelihood of Democrats winning a fourth consecutive presidential term will be reduced if the Republican Party reverts to its practice, adhered to since it chose John C. Fremont in 1856, of nominating a Republican.

Well, things didn’t work out exactly as George Will had warned, did they? Trump won about 47.2% of the popular vote, whereas Will had predicted he’d get “probably a lot less” than 45 percent. Trump not only won, but he did better with blacks and Hispanics than Romney did in 2012. Now in fairness, that might be an unfair comparison because Obama was black and Hillary Clinton is white, but still, Will said Trump wouldn’t be able to “even come close” to Romney’s support among women, minorities, and young people. (Romney got 44% of women voters whereas Trump only got 42%, but again Hillary Clinton being a woman is relevant here. In any event, McCain only get 43% of female voters himself, so Trump’s result is not completely disastrous here.)

The Democratic margin among young voters was smaller this cycle than in the past two, thought it’s partially because Clinton got fewer young voters than Obama had done. In terms of absolute performance, McCain won 32% of young voters (age 18-29), Romney won 36%, and Trump won 37%.

So Will was totally wrong about Trump’s performance. What about his warnings of Trump destroying the GOP’s power in the rest of the federal government? Here’s how the New York Times–not noted for being a Trump mouthpiece–summarized the results of the election the day after:

Republicans kept their grip on the House of Representatives on Tuesday, overcoming months of efforts by Democrats to tarnish them by association with Donald J. Trump in what proved to be a grave miscalculation.

With a handful of races outstanding Wednesday morning, Democrats had a net gain of just five seats and were expected to remain in the minority, a position they have occupied since Republicans swept to power in 2010 on a wave of Tea Party fervor.

In the few districts that changed hands, it was not perennially endangered Republicans in typical swing districts who were falling, but rather some incumbents who had been comfortably re-elected in the past.

…As it became clear that Republicans could not only hold both chambers but also claim the presidency, Republicans who had braced to lose all but the House began entertaining notions of a sweep. That would open the possibility of the passage of the party’s long-stalled agenda, Representative Tom Cole of Oklahoma said Tuesday night.

Now to be sure, #NeverTrumpers like Will could still say, “We think Trump will make an awful president and Republicans will rue the day they nominated him.” But you would think after doing everything in his power to hurt Trump, and for him still to perform as he did and now have the GOP in complete control, that Will would have the decency to admit to Republicans that he had given them horrible political and strategic advice.

With that context, let us see how George Will addresses the issue in the first (that I could find?) column he wrote, after the elections:

At dawn Tuesday in West Quoddy Head, Maine, the easternmost point of the United States, it was certain that by midnight in Cape Wrangell, Alaska, the westernmost fringe, there would be a loser who deserved to lose and a winner who did not deserve to win. The surprise is that Barack Obama must have immediately seen his legacy, a compound of stylistic and substantive arrogance, disappearing, as though written on water in ink of vapor.

OK, it takes you a second to figure out what the hell Will is even talking about, but it’s certainly not, “Oh my gosh you guys, I am SO SORRY for giving such horrible analysis.” (And incidentally, the fact that he starts out his column with the above paragraph, is exactly why George Will was so clueless about Trump’s electoral chances.)

In case you’re curious, here is how Will explains what happened:

The simultaneous sickness of both parties surely reveals a crisis of the U.S. regime. The GOP was easily captured, and then quickly normalized, by history’s most unpleasant and unprepared candidate, whose campaign was a Niagara of mendacities. And the world’s oldest party contrived to nominate someone who lost to him.

OK, that’s fine, but Will was unaware of Trump’s mendacities two weeks before the election? George Will–who can (and will) tell us what knot William Jennings Bryan used in his neckties–didn’t know that the U.S. regime was in crisis until after watching CNN on November 8?

And here’s the best part:

Americans perennially complain about Washington gridlock, but for seven decades they have regularly produced gridlock’s prerequisite: divided government. From 1944 through 2016, 22 of 37 elections gave at least one house of Congress to the party not holding the presidency; since 1954, 21 of 32 did; since 1994, eight of 12. Republicans now lack excuses: If 40 Democratic senators block repeal of Obamacare (or Supreme Court nominees), the Republicans’ populist base will demand Democratic behavior — revision of Senate rules to make this body more majoritarian.

So again: Rather than saying, “Holy crap you guys, I am SO SORRY for being SO TOTALLY WRONG about the fate of the GOP if Trump wins the nomination!” Will is now saying, “Republicans now lack excuses.”

And yet, Will seems to be full of them. My grade? F.

24 Nov 2016

A Thanksgiving Miracle — This Week’s Contra Krugman

Contra Krugman 2 Comments

We almost never get the episode up by Thursday. And on a national holiday?! Here ya go.

21 Nov 2016

Murphy Twin Spin

Mises, Shameless Self-Promotion 35 Comments

Sorry for the sparse blogging, I’ve been traveling like a presidential candidate lately. Here are two things to tide you over:

==> A link to all of the talks at Hillsdale College’s recent seminar series on Mises & Hayek. I get into some issues in my talk (which focuses on the book Human Action) that I don’t think I’ve talked about publicly, so even veterans might like this one.

==> The latest Contra Krugman. You will be shocked to learn that now, all of a sudden, Krugman is not so keen on running up big budget deficits on infrastructure projects.