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The Wall Street Journal‘s Editorial Board understandably is pessimistic about the coming consequences of the U.K.’s new Prime Minister, Andy Burnham. A slice:

Alas, here Mr. Burnham appears to have the wrong instincts. He supports greater state control over utilities, wants the government to take the lead on housing construction, and is on the prowl for other taxes to raise. It’s hard to tell where he stands on the economy-suffocating net-zero climate policies Labour has championed. He emphatically rebuffed a plea by former Prime Minister Tony Blair to revisit the more market-friendly version of Labour that worked in the late 1990s.

All that plays well with Labour’s noisy progressive flank and assuages members who are nervous about growing support for the Green Party to Labour’s left. But it won’t deliver the economic results voters demand. Mr. Burnham has a limited chance after he takes office to pivot, especially on matters such as welfare reform. It’s a good sign that he seems not to want to appoint Ed Miliband, a popular left-winger and net-zero true believer, as Chancellor of the Exchequer, in charge of economic policy.

Also critical of the apparent ignorance of Andy Burnham is Allister Heath. (HT Andy Morriss) A slice:

Even given the low bar set by recent prime ministers, this was a shockingly poor speech from our Prime Minister-designate, a farrago of nonsense, historical revisionism, blatant contradictions, economic illiteracy and character assassination.

Given Burnham’s demonisation of the 1980s – and thus of its principal architect, Margaret Thatcher, one of the just two truly great British PMs of the past 85 years – the Kumbaya politics was especially hypocritical, as was the nonsensical claim that he will be “pro-business” while renationalising all that moves.

Burnham claims to believe that he will end factional politics, a delusion born of his ludicrous appointment by acclamation. Following a colour-by-numbers approach to speech-giving, the new Labour Party leader believes his arrival will usher in “a new politics”, that he will govern on behalf of “forgotten places everywhere”, that he “will be a leader for all places”.

If that sounds like drivel, that’s because it is. Does Burnham really believe that a jaded, disillusioned public that has heard all of this before will be swayed by his remix of all of the old tunes? Or is his Messiah complex so pronounced that he believes that simply willing a revolution will automatically see it enacted?

If so, we are truly in trouble as a nation, though not as much as Burnham himself when he realises that there are no levers to be pulled to fix any of Britain’s pathologies.

He is the seventh PM in a decade and evidently has no clue what to do. We are living beyond our means, an ever larger welfare state sucking the lifeblood from a quasi-stagnant private sector economy that is now too small, too constrained by red tape and taxes and command-and-control policies to fund our ruling class’s socialistic ambitions.

“California’s billionaire tax is backfiring before it begins,” as reported by by Mohamed Moutii.

David Inserra explains what shouldn’t – but, alas, what today even in the U.S. nevertheless does – need explaining: “Broadcasters should not lose their licenses because they don’t broadcast a president’s speech.”

Juan Londoño argues that “the White House’s approach to frontier AI might be worse than an ‘FDA for AI’.” A slice:

The White House’s executive order on frontier AI supposedly set up a voluntary evaluation process for frontier AI models that, according to the text, should not be interpreted as a pre-release vetting or licensing regime. However, once Anthropic decided to expand access to its Fable and Mythos models, the White House responded by invoking export control powers that would prevent foreign nationals from accessing these models, even if they resided in the US. As Anthropic itself admitted, enforcing this mandate was so complex that there was no choice but to shut down the models. Before this incident, there was no indication that these export controls could be invoked, and Anthropic and the AI industry at large were caught off guard.

This episode clearly draws out the issues with the current evaluation regime: It is seemingly arbitrary; the industry has no clear and public standard over what would make a model “safe” or “dangerous”; and there is no clarity over what the executive can and cannot do to models it deems to be too dangerous to release. This uncertainty, as seen in recent examples, can disrupt not only AI companies but also businesses worldwide that rely on these products.

Timothy Taylor shares a research paper that finds a positive payoff to U.S. federal-government funding of R&D. A slice:

Let’s put all this in some perspective. The US GDP is about $30 trillion in 2026 (actually a little higher, but round numbers are useful here). Thus, the thought experiment of spending $30 billion more per year involves a spending increase of about 0.1% of GDP per year–and sure enough, after about 10 years, it raises per capita GDP by about 0.1% using either approach. This may look like a wash. But notice that the estimates here are based on increasing R&D for only a 10-year period, while the benefits are projected out over 30 years. To put this another way, the current costs of an overall boost in R&D spending–like long-term investments in physical infrastructure–are more than repaid over an extended period of time. But to get the long-run payoff, you need to pay the short-term costs.

[DBx: This finding runs counter to my priors, but a quick perusal of the paper reveals that the research appears to be solid. Question for advanced econ students: When public-choice realities are taken into account, what does this paper’s finding – assuming it to be sound – imply about additional federally funded R&D? The answer isn’t obvious (at least not now to me). Public-choice realities suggest, on one hand, that, because the positive payoff is long-run while the costs are paid in the short-run, too little of this funding is now occurring and, hence, additional funding would yield positive results. On the other hand, public-choice realities warn against trusting government officials to extend such funding in economically justified ways.]

Back in April, Chelsea Follett made clear that “calls for wealth redistribution rest on a faulty premise about inequality.” A slice:

Recent work on multidimensional inequality suggests that the world has not been drifting toward ever greater gaps, but that the rich and the poor have been converging in material comfort. Calls for global wealth taxes or massive new aid programs often rest on the assumption that international trade and economic freedom have failed to deliver broadly shared gains. Yet the long-term evidence suggests the opposite.

J.K. Lundblad tweets: (HT Scott Lincicome)

There is a misconception that protectionism will make the supply chain more robust by reshoring it.

Often, historical evidence suggests the opposite: protecting domestic production leads to more fragility by restricting the supply chains ability to adapt.

I also discussed this in my big tariff/trade essay:

“In 2022, for example, the US faced an extreme shortage of baby formula. The immediate cause was a suspected bacterial contamination at a major producer, which forced a temporary plant closure. The true cause, however, was a protected supply chain; imported baby formula faced high tariffs and red tape, which allowed the US formula market to be controlled by just three suppliers. When panic buying set in, the domestic supply chain couldn’t adapt, and store shelves emptied. The shortages were only resolved by importing formula en masse from Europe aboard military cargo jets.

To witness firsthand the effects of protectionism, we could look at the state of two industries that are perhaps the most protected under the guise of “national security” in the US: steel and shipbuilding. For decades, the government peppered these sectors with protective tariffs, subsidies, “buy American” requirements, etc. As a consequence, however, their inefficiency has become so severe that the United States now fears that it cannot produce the wares it needs in the event of a war. So, it is looking to outsource shipbuilding and steel-making to Korean and Japanese companies instead. In other words, efforts to ensure supply-chain independence have bred a desperate dependence on allies instead.

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… is the opening lines of William Graham Sumner’s brilliant January 1881 Princeton Review essay, “The Argument against Protective Taxes”

The most absurd assertion which can be put into language is that a thing (e.g., free trade) is true in theory but is false in practice. For, if free trade is not true in practice, something else, viz., restricted trade, is alleged to be true and beneficial in practice. It will therefore be a matter of scientific investigation to find out how restriction acts, what forces it brings into action, what are the laws of those forces, what are the conditions of successful restriction, etc. etc.-in short, to find out the theory and philosophy of restriction. The theory thus found will be “true” because deduced from observation and ratified by experience. But it was conceded, at the outset, that free trade is true in theory. Hence it would follow, if free trade is true in theory but not in practice, that two opposite and contradictory propositions about the same subject-matter could both be true at the same time. This is the height of absurdity. Any one, therefore, who makes this assertion is either guilty of very loose thinking, or else he seeks an escape, at all hazards, from rational conclusions against which he can no longer contend.

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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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