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Scott Winship corrects several of Michael Brendan Dougherty’s misconceptions about the American economy. A slice:

The second issue Dougherty raises is his claim that “the overwhelming contributor to the growing upper-middle class is not higher productivity . . . It’s more hours worked, and at a higher wage.” Let me quickly just point out that according to data I assembled for an earlier paper, between 1979 and 2022, net productivity (which excludes depreciation — don’t ask) in the nonfarm business sector rose 97 percent while hourly wages rose 85 percent. So it doesn’t exactly feel like productivity growth was unimportant. More good news!

Furthermore, it’s not the case that only women have seen wage gains while men “saw stagnant or modest growth in their wages” and deterioration in their employment. Rather, the numbers behind Figure 2 in this paper of mine indicate that the median wage of men ages 25 to 54 rose by 16 to 29 percent from 1989 to 2023 (and I’d advocate hard for the 29 percent as the better number). One can wish that increase was stronger, but it nevertheless means that men are better off than ever.

Jacob Sullum reports on the legal challenge to Trump’s Section 122 tariffs punitive taxes on Americans’ purchases of imports. A slice:

In response to the lawsuits, Assistant Attorney General Brett Shumate notes that the plaintiffs who opposed Trump’s IEEPA tariffs, which likewise included a bunch of blue states along with small businesses represented by the LJC, suggested that Section 122 was the appropriate vehicle for tariffs aimed at addressing the purported problem posed by the longstanding U.S. trade deficit in goods. “Plaintiffs repeatedly argued that the President’s tariffs were unlawful under IEEPA but would be justified under Section 122,” Shumate writes. He adds that federal courts, including the CIT, “relied on plaintiffs’ counsel’s arguments and agreed that Section 122 was the proper authority for imposing such tariffs.”

Shumate does not mention that the Trump administration has also changed its tune. In defense of the IEEPA tariffs, the government’s lawyers rejected the idea that the president should instead rely on Section 122. That provision, Shumate and his colleagues said does not have “any obvious application here, where the concerns the President identified in declaring an emergency arise from trade deficits, which are conceptually distinct from balance-of-payments deficits.”

The Trump administration wants the CIT to forget about that concession, which goes to the heart of the president’s asserted authority under Section 122. The government’s lawyers are now contradicting their prior position, saying a trade deficit is enough to establish “fundamental international payments problems.” Citing the official “balance of payments” numbers from the U.S. Bureau of Economic Analysis, Shumate urges the CIT to focus on the “current account,” which consists mainly of the trade deficit, and ignore the other accounts that figure in the calculation. Those countervailing accounts include foreign investment in the United States and borrowing via U.S. government bonds.

John Puri writes sensibly about egg prices.

Here’s the Cato Institute’s amicus brief in a case on the banana-republic practice of civil asset forfeiture.

“Mammas don’t let your babies grow up to be disgruntled, underemployed PhDs.“

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… is from pages 68-69 of Viktor Vanberg’s 2023 paper “Public Choice, Behavioral Symmetry, and the Ethics of Citizenship,” which is chapter 5 of The Legacy of Richard E. Wagner (Peter J. Boettke and Christopher J. Coyne, eds., 2023) [footnotes deleted]:

In a sense, the public-choice outlook at politics was meant to mirror the way welfare economists looked at markets. Just as the latter diagnosed real-world markets to be plagued by “failures” when compared with the ideal of perfectly working markets, public-choice economists insisted that real-world politics likewise “failed” when measured against its ideal image. Yet, unlike welfare economists, who considered such diagnosis of “market failures” a sufficient basis for recommending government intervention, public choice scholars did not draw symmetric conclusions. Rather, the point they sought to make was that measuring either real-world markets or real-world politics against unrealizable ideal standards is of no help whatsoever for answering the question of how problems a society faces ought to be dealt with. The only meaningful way to seek answers to such questions is, from a public choice perspective, to compare and evaluate feasible institutional arrangements, both in markets and in politics.

DBx: Pictured here are Jim Buchanan and Viktor Vanberg.

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Clark Packard’s and Scott Lincicome’s letter in today’s Wall Street Journal – a letter written in response to U.S trade representative Jamieson Greer’s hostility to the World Trade Organization – is superb:

Jamieson Greer’s frustration with the World Trade Organization is understandable, but his op-ed ignores how the U.S. unwisely accelerated the organization’s decline (“Another Fish Story From the WTO,” April 8).

The American middle class has prospered in the era of open trade, and U.S. manufacturing job declines—driven mainly by productivity gains—long predate China’s WTO accession. The U.S. was the WTO’s chief architect and reaped significant economic and geopolitical value from the system. Its retreat, which began before the administration, ignored these realities and instead prioritized U.S. farm subsidies and trade remedies, often resisting the disciplines Washington demanded of others.

Fealty to these and other insular political issues stymied multilateral negotiations and motivated four separate U.S. administrations to neuter the WTO dispute settlement by blocking Appellate Body appointments. Washington’s participation in disputes has also ground to a halt. You can’t complain about the rules of the game after you stop playing and strangle the referee.

Worst of all, the U.S. has been a bad-faith abuser of the rules it helped write, blowing through tariff bindings and invoking narrow WTO exceptions for national security and balance-of-payments crises to maintain President Trump’s global tariff wall.

Mr. Greer is right to decry the WTO’s consensus problem and the abuse of certain rules by other WTO members. The institution does need reform. But members’ continued participation shows the institution isn’t dead. And reform can’t happen if the U.S. keeps pretending it didn’t help cripple the institution it’s now eulogizing.

“The White House ballroom’s imported steel shows how tariffs encourage cronyism” – so reports Reason‘s Eric Boehm.

My Mercatus Center colleague Alden Abbott applauds Shanker Singham’s method of assessing anticompetitive market distortions (ACMDs). A slice:

The domestic-competition pillar asks a basic question: do firms compete on the merits, or do governments tilt the field through favoritism, incumbent protection, or directed allocation of capital and demand?

The international-competition pillar asks whether foreign firms can compete on reasonably equal terms. Localization rules, discriminatory standards, procurement preferences, and similar measures often push them to the sidelines.

The property-rights pillar asks whether firms can rely on secure legal protection for intellectual property, data, contracts, and investment-backed expectations.

This framework helps distinguish ordinary trade frictions from true market-rigging. A tariff can impose costs without reshaping the competitive order. By contrast, rules that channel procurement to politically favored firms, force technology transfer, or grant regulatory privileges to state-owned enterprises operate differently. They decide winners before competition even begins.

George Will explains that the U.S. president’s “’power to grant reprieves and pardons’ has become another source of political brutishness.” Here’s his conclusion:

So, the remedy for tawdry pardoning is not this or that institutional gambit. The only feasible solution is the election of presidents who are not louts. This, however, becomes less likely as voters are made ever more cynical by loutish pardons.

Phil Magness justly criticizes J.D. Vance’s support for Hungarian strongman Viktor Orbán. Two slices:

How did the vice president of the United States end up doing campaign work for a Hungarian strongman five days before an election? The answer runs through the most dangerous intellectual movement in American (and world) politics: postliberalism.

In Part 1 of this series, I documented how a visceral disdain for capitalism and economic modernity in general spawned the postliberal movement amid the failed apocalyptic predictions of “Peak Oil Theory” in the mid-2000s. In Part 2, I documented how postliberalism enlists the overtly fascist legal theories of Carl Schmitt to wage an attack on the Madisonian constitutional system of checks and balances and the classical liberal philosophical ideas that animated the American founding.

In this installment, I turn my attention to the postliberal movement’s search for a patron. The fundamental unpopularity of this movement’s ideas has sent them searching — to both the Catholic Church and Viktor Orban’s Hungary — for a top-down authority willing to override public opinion.

…..

Scholars from across the political spectrum have documented how the left-leaning identity politics of elite academia spilled out of the faculty lounge and into mass media, K-12 education, and even the corporate board room. Sociologist Musa al-Gharbi dubbed this the “Great Awokening” and dated it to the early 2010s. In my own work, I’ve documented how faculty political opinions underwent a hard left turn in this same period and flooded mainstream dialogue with previously obscure jargon from the Critical Race Theory academic literature.

Although the leftward cultural shift is real, [Gladden] Pappin’s diagnosis of its causes misses the mark. Rather than investigating its sources in the classroom, he defaulted to the ideological anti-capitalism and disdain for economics that undergirds the postliberal movement.

[Patrick] Deneen made a similar move in his own cultural diagnosis. In a 2023 interview, he attributed wokeness to a hypothesized merger between the 1960s sexual revolution and a “neoliberal capitalist ethos” in which everything is commodified to maximize consumption and material comfort.

Financial Times columnist Harvey Nriapia takes a look at the latest research on minimum-wage legislation. (HT Richard Ebeling) A slice:

The majority of this research shows that a minimum wage rise lowers employment, especially among younger and less-educated workers. While the evidence is not unambiguous, it certainly points in one direction.

The logic is quite straightforward: as the price of low-skilled work rises, employers demand less of it. This is especially true for the young, who might be less productive and more error-prone when starting out.

There are many potential mechanisms explored in the literature. It could be that in response to a minimum wage uplift, companies cut jobs and invest in more labour-saving technologies, such as self-service checkouts. Or perhaps, when thinking about business needs for the next fiscal year, they opt for one older, more experienced hire rather than two young workers. Of course, some unproductive companies also buckle under the weight of the new statutory pay demand, which could leave entire teams without jobs.

[David] Neumark’s research suggests the evidence is often at odds with how the body of research is summarised. “One can always say that a lot of studies are wrong, and some small set are right — and that could lead one to the conclusion that higher minimum wages don’t reduce employment in the US,” he told me. “But simply saying “studies show” that is highly inaccurate and continues to be since this paper.”

As for why the research and the communication about the research differ so markedly, Neumark posits three reasons. First, very few economists tabulate all the literature, so they don’t know what the majority of it says. Second, a few of the prominent studies that show no negative or even positive employment effects get disproportionate press, such as the Card and Krueger 1994 paper, which is a cornerstone of economics undergraduate courses.

The third is more concerning: “I have no doubt that there are some researchers . . . who are advocates for higher minimum wages,” he told me. “I’ve seen this reflected in so many ways. I think they amplify the claim that ‘most minimum wage studies show’ no effects, even though it’s inconsistent with the data.”

Ian Vásquez shares a report – one presented last month at a meeting of economists and policy-makers (that I, too, attended) – on impressive progress in Argentina of reducing economically stifling regulations.

At a meeting I attended last month with a small group of economists, Argentina’s Minister of Deregulation, Federico Sturzenegger, presented the graph above. It shows how satellite internet use exploded once the government lifted its ban, which had, until then, benefited a politically powerful local internet provider.

In a recent paper, Sturzenegger describes how Argentines and businesses that were previously isolated or harmed by the high cost of the internet benefited from the deregulation.

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… is from David Hume’s essay “Of the Delicacy of Taste and Passion” (here from page 5 of the 1985 Liberty Fund collection of some of Hume’s essays, edited by the late Eugene Miller, Essays: Moral, Political, and Literary):

The good or ill accidents of life are very little at our disposal; but we are pretty much masters what books we shall read, what diversions we shall partake of, and what company we shall keep.

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Here’s a letter to National Review.

Editor:

Flaws aplenty infect Michael Brendan Dougherty’s criticisms of the many studies that show high and rising living standards for America’s middle class (“How the Upper Middle Class Was Made,” April 10). Distilled to their essence, however, Mr. Dougherty’s criticisms are nothing but revelations of his ignorance of the facts mixed with his distaste for the choices freely made by his fellow Americans.

Although it’s true that, over the past half-century, women’s inflation-adjusted earnings rose faster than those of men – hardly surprising given that women decades ago were generally less skilled than men in the workforce – the fact, as documented by Scott Winship, is that men’s inflation-adjusted earnings have also risen. Contrary to Mr. Dougherty’s presumption, therefore, it’s more affordable today than in the past for a family to have only the male in the workforce. It follows that today’s greater participation of women in the workforce isn’t an economic necessity imposed upon families by the heartless market but, rather, a choice voluntarily made by most families. (See also this important post by Jeremy Horpedahl.)

Mr. Dougherty’s factual errors are too numerous to mention, but two deserve the spotlight. First, it’s untrue, as Marian Tupy points out, that Americans today work more hours than in the past. In the 1950s, each American worker, on average, worked 2,024 hours annually. Since 2000, each American worker, on average, works only 1,808 hours annually – or 11 percent fewer hours than during that alleged golden decade of the 1950s.

Second, manufacturing employment today is more secure than in the past. From 1958 through 1980, the average monthly manufacturing-job layoff rate was 1.6 percent. Today the rate of layoffs and discharges is lower. From December 2000 through February 2026 – years including both the Great Recession and the covid hysteria – that rate is down to 1.1 percent.

No one argues that the economy is perfect, whatever such a standard might mean. But Mr. Dougherty should both better familiarize himself with the facts and quit presuming that his personal preferences are, or ought to be, those of his fellow Americans.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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