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The Wall Street Journal‘s Editorial Board decries the juvenile reactions of prominent Americans, on the left and right, to the Canadian wildfires. A slice:

Allow us to clear the air: Canada has reported about 3,500 wildfires so far this year, which is in line with recent historical averages. It’s true that many decades of poor land management have resulted in overgrown forests in Canada, but the same goes for the U.S. The Trump Administration might tend to the federal government’s ill-managed forests before throwing stones at Canada.

As for the effects of climate change, a paper in the journal Nature Communications last year reported that fires in recent decades in North America are running far below historical levels (between 1600 and 1880). Even years “with particularly widespread fire during the 1984–2022 period,” the study said, “were not unprecedented in comparison with the active fire regimes of the historical period across most of the study region.”

All of this is too nuanced to fit into social media sound-bites. But maybe America’s political leaders could try to lower the temperature for a change rather than feed public furies.

George Will wants some hard questions about Social Security posed to political candidates. Two slices:

“Saving” Social Security by huge additional borrowing would intensify upward pressure on interest rates, hence downward pressure on economic growth. This could further worsen Social Security’s financing problems.

Recourse to general revenues also would transform the system that was sold to the country in 1935 as a self-financing contributory program. Few will notice, fewer will care. The change will mean another huge amount of borrowing, added to existing debt, which occasioned little and evanescent anxiety when, this year, its size passed that of U.S. gross domestic product.

…..

America’s kakistocracy has produced gerontocracy. Government’s biggest, most beloved program is wealth redistribution masquerading as retirement program. Social Security transfers wealth regressively, upward from today’s labor force to the elderly, who have had a lifetime of accumulation, and have paid off mortgages on homes that have risen in value.

Scott Yenor ponders the fate of sociology.

“Cato Institute research fellow Chelsea Follett joins James Hohmann to discuss Europe’s cultural and regulatory resistance to air conditioning.”

Jeffrey Miron summarizes the findings of a new study of the effects of protective tariffs.

Brian Arner asks “Which statute grants the president authority to tariff due to smoke?” – to which Scott Lincicome replies “The Soot-Hawley Act, obvs.”

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… is from Reason magazine’s February 1974 interview of Milton Friedman:

A high rate of monetary expansion would not be desirable but a free society can live with any rate of monetary expansion, provided there isn’t an attempt to eliminate its effects by price and wage controls. What a free society cannot live with is an attempt to repress inflation.

DBx: I suspect that even Friedman would agree that he here overstated the case that “a free society can live with any rate of monetary expansion”; at some point, such expansion becomes destructive in and of itself. But Friedman’s larger point is correct and important: As undesirable as inflation is, matters are made much worse if governments attempt to suppress increases in nominal prices, wages, and interest rates.

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Marian Tupy disabuses American socialists of their economically ignorant belief that successful entrepreneurs steal their wealth from workers and consumers. Two slices:

Early economists, such as James Mill and David Ricardo, theorized that the physical labor exerted to create a good is the real measure of its value. Karl Marx took the concept to its extreme: If labor creates all value, then profit must require unpaid labor, making every employer an expropriator and every fortune a crime.

Then, beginning in 1871, economists countered the labor theory of value. Carl Menger, William Stanley Jevons and Léon Walras demonstrated independently that value resides not in hours of toil but in the judgments of consumers. Writing a 500-page novel takes the same amount of physical labor as typing out 500 pages of the word “banana” repeatedly. Only the novel commands a price. Value is created whenever someone rearranges the world into a shape that others want. It is measured by the buyer, not the worker.

Entrepreneurs are the arrangers. Economist Israel Kirzner argued that entrepreneurship is alertness — noticing an opportunity that nobody else has found. The entrepreneur sees that resources combined in a certain way and priced at a certain level can be recombined into something consumers will value even more. The gap between the two is profit. Nothing is taken from workers, who are paid the wage they agree to, or from customers, who buy the product only when the purchase leaves them better off.

…..

A movement that believes wealth is stolen will tax it, cap it and make everyone poorer. Ideas drive growth, and ideas come from people who can profit from them. A world that cherishes entrepreneurs will enjoy advanced chips and revolutionary cures. A world that punishes its innovators will at least enjoy plenty of slogans.

“America has a huge trade surplus with Brazil. Trump just put 25 percent tariffs on Brazilian goods anyway.” Here’s a slice from another excellent piece by Reason‘s Eric Boehm:

Trump administration officials have offered a variety of overlapping and competing justifications for the new tariffs in comments to The New York Times, including “inadequate policing of deforestation” and the fact that Brazilian courts had tried to order “U.S. social media companies to take down certain political content.”

Those might be real problems, but how will tariffs address them? Forcing American businesses and consumers to pay higher prices on imports from Brazil seems like an odd way to combat deforestation or stand up for free speech.

“These tariffs are a blunt tool with a weak connection between the practices at issue and the American companies that will bear the costs,” Dan Anthony, executive director of We Pay the Tariffs, a nonprofit coalition representing more than 1,200 American small businesses, said in a statement. “Businesses buying everyday products from Brazil will now pay new tariffs because of disputes over digital payment rules and other policies they have nothing to do with.”

For all the talk about trade deficits, the new tariffs once again reveal that there are no principles underpinning the Trump administration’s trade policies. The president will use any and every justification to slap new tariffs on foreign imports and leave Americans with the bill.

My intrepid Mercatus Center colleague, Veronique de Rugy, rightfully criticizes Congress for its indifference to the coming Social Security fiscal reckoning. A slice:

When politicians do raise the issue, they make the fix sound easy. Sens. Bernie Moreno (R-Ohio) and Elizabeth Warren (D-Mass.) want you to believe that eliminating the cap on payroll taxes would fix the problem. That solution fails on its own terms.

Using data from the Social Security Administration’s own actuaries, my colleague Jack Salmon demonstrates that scrapping the taxable maximum closes only 58% of the gap. National Review’s Ramesh Ponnuru noted last month that it would push the federal marginal rate on top wages to an untenable 49.4%, and overall rates would climb past 60% in high-tax states like California and New York.

The senators aren’t alone in wanting to tax our way out of this problem. In one recent survey, 89% percent of Americans aged 65 and older favored protecting current retirees’ benefits even if doing so requires higher taxes on younger workers.

That position is popular only because it rests on the image of retirees living off nothing but Social Security. That image, partly an artifact of bad data, fails to capture the situation.

In a March 2025 government survey, 24% of seniors reported that Social Security supplies 90% or more of their income. But when Census Bureau researchers matched responses with IRS filings and benefits records, they found that retirees frequently omitted their 401(k) and IRA withdrawals, making the real figure only about 14%. Meanwhile, 58% of retirees draw less than half their income from the program.

The remaining 42% are the retirees that Social Security reform of any kind should protect. They already receive a raw deal under the current formula, which does a much better job of protecting wealthier seniors.

As the Cato Institute’s Romina Boccia and Ivane Nachkebia documented last month, seniors aged 65 to 74 had a median net worth of $410,000 in 2022, compared with only $135,600 for those aged 35 to 44 (who pay a significant share of the taxes). Roughly 34% of Social Security dollars go to filers with adjusted gross incomes above $100,000. Too often, Social Security is less a need-based program than a transfer of wealth from the young and unpropertied to the old and comfortable.

“Beijing wants to lock down AI. Washington should open it up” – so argues Mark Jamison. A slice:

America has repeatedly become the world’s technological leader not by keeping its innovations at home, but by making them indispensable abroad. American operating systems, cloud computing, software platforms, financial services, entertainment, and internet companies became global standards because businesses and consumers everywhere wanted to use them. This meant enormous profits for U.S. companies—and expanded influence for the U.S. It also ensured that America remained the top destination for global talent, and set the stage for future innovation that would further U.S. dominance.

We have the opportunity to do this again with AI. The United States leads the world in AI innovation and investment. Our frontier models have always been best-in-class. But the gap is narrowing.

Speaking of AI…. (HT Brian Mannix)

On Friday, Thinking Machines released its first manifesto, outlining its vision for a future in which AI was decentralized and built on local knowledge. The company, whose CEO, [Mira] Murati, witnessed the collapse of communism in her native Albania as a child, compared the current dominant AI paradigm of close-source frontier labs to “central planning”—great for bounded tasks like chess and math, but not for the real work humans do every day.

Stu Smith takes us “inside the rise of the anti–data center movement.” A slice:

Across the country, DSA chapters are taking up the data center cause. In Seattle, that has meant calls for a statewide moratorium on AI development, targeted at Microsoft and Amazon facilities in particular. In the Washington, D.C., region, Metro DC DSA has focused on blaming facilities in Maryland and Virginia for rising utility costs while advocating for community control of electrical infrastructure. A similar effort is underway in Arizona, where DSA activists are pushing to take over Tucson Electric Power, which has shown a willingness to work with data-center developers.

In New York State, these campaigns have found tangible political backing and influenced policy discussions and outcomes. At the DSA Ecosocialism event, State Senator Kristen Gonzales noted that the legislature had approved a bill establishing a one-year moratorium on data-center construction, allegedly to shift power away from Big Tech. In Ithaca, the local DSA is actively opposing a TeraWulf data center project—an opposition effort that has won the backing of New York State Representative Anna Kelles. Now that DSA has gained representation on Ithaca’s city council, members have said they intend to “electorally punish” those who supported and enabled the project, while continuing to push for a moratorium and pursuing legal action against TeraWulf.

Charlie Trumbull makes the case that “Trump’s boat strikes are crimes against humanity.”

Phil Magness, writing at his Facebook page, is less than favorably impressed with the intellectual abilities of scholars on the “new right”:

It’s genuinely amusing how all of the leading “intellectuals” of the new right – Deneen, Pappin, Hazony, Pecknold, Pinkoski – are complete lightweights.

Their “research” invariably shows signs of being way out of their depth and lacking even minimal competence in what they purport to describe. It could not pass peer review at even a 3rd tier journal specialized in the same subject areas. So they create their own publication ecosystem of blogs, vanity journals, and “popular” outlets that insulate them from basic scrutiny. And when they put something into print, it repeats basic errors that betray its shallowness.

So you get Deneen making sweeping claims about the American founding that contradict the founders themselves, or Pappin mistaking LaRouchie conspiracy theories for economics, or Pecknold claiming Catholic theological sanction for positions that senior Vatican officials have explicitly denounced, or Pinkoski peddling white nationalist dystopian novels as serious policy analysis, or Hazony trying to repackage incoherent right-Hegelian babble as if it was a derivative of Burkean political writings that he does not understand and has probably never even read beyond a superficial glance.

A functional scholarly ecosystem would have flushed these buffoons out a while ago. Then again, a functional scholarly ecosystem would have also flushed out Nancy MacLean etc.

Virginia Postrel tweets: (HT Scott Lincicome)

People getting sick from cyclospora or avoiding fresh produce to avoid sickness are all casualties of the superstition against irradiating food.

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… is from page 77 of Jerry Z. Muller’s 1993 book, Adam Smith In His Time and Ours [original emphasis]:

Smith did not believe that there was a natural harmony of interests in society. He believed that the public interest would be best served if every man channeled his self-interest through the market. But he realized that from the point of view of the individual producer or group of producers it was most beneficial to circumvent the competitive market with its attendant risks, and use all available means to prevent competition, in order to obtain the highest possible price for their wares.

DBx: Yep. And as Smith understood, no scheme to circumvent market competition in order to enable the few to profit at the larger expense of the many is more pernicious than protectionism.

…..

Smith died on this date – July 17th – in 1790.

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Here’s a letter to the Wall Street Journal.

Editor:

Brandon Farris’s defense of steel tariffs is defective (Letters, July 16). He cites a 2023 U.S. International Trade Commission study, but that study analyzed the 25% tariff then in effect, not the 50% rate imposed since then. It cannot vouch for today’s tariffs

The study also undercuts, rather than supports, Mr. Farris’s argument. Prices of final goods did rise only modestly. But the report found near-complete pass-through: foreign exporters barely cut their prices. American importers and the manufacturers and consumers downstream of them — not foreigners, as the administration claims — bore almost the entire cost.

The Commission found that “for downstream industries, the effects are largely negative…. The average annual decrease in production values for these industries was $3.4 billion during 2018–21.” Even so, the report calls its own findings incomplete, as it “focuses on short-term effects during 2018–21 and does not address long-term effects,” omitting consequences such as the drag on U.S. exporters from foreign retaliation, which it notes occurred but are not measured. Significantly, yet ignored by Mr. Farris, the report adds that it “is not an assessment of the complete, economy-wide impacts of the tariffs.”

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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