Another Day In Government Metastasization

When you get right down to it, our federal Constitution isn't really very complicated.  The government as a whole has only such powers as are defined by a limited list (Article I, Section 8), and even those powers are exercised by three branches having separate functions.  "All legislative Powers" are "vested in a Congress" (Article I, Section 1); "[t]he executive Power" is "vested in a President" (Article II, Section 1); and "[t]he judicial Power" is vested in "one supreme Court and in such inferior Courts as Congress may from time to time ordain and establish" (Article III, Section 1).  And then there's the so-called "power of the purse," located in Article I, Section 9: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law. . . ."

Or you can go with the alternative view, which is that there's a vast administrative state out there, some of it kind of reporting to the President and some not, and they can just do whatever the hell they want.  After all, they're the experts, and they know much better than the mere people what is best for them.  Today this second view has been adopted by around 98% of the legal academy, as well as by four of the current eight justices of the Supreme Court.  (Soon to be five?  We'll see.)

But, you ask, the Constitution is right there for all to see and is so simple in its structure and commands; is it really so easy just to evade it entirely?  The answer is that today the world of legal and constitutional scholarship is characterized by such a pervasive and powerful groupthink that it is no longer necessary to make arguments that even pass the proverbial "straight-face test."  Of course the agencies have to be able to do whatever they want!  Otherwise all hell will break loose!  (Or something like that.)

For today's first example, consider the decision today from the federal District Court for the District of Columbia (Judge Rosemary Collyer) in United States House of Representatives v. Burwell.  I cannot find a copy of the full text of the decision online, but here are reports from The Hill and from Fox News.  This is the case where Republicans in the House have sued the executive to enjoin it from spending unappropriated money to pay to health insurance companies to save them from incurring big losses under Obamacare.  Oh, the government has gone right ahead and spent some tens of billions of dollars on this purpose over the past few years, even though there has been no appropriation of money for the purpose by the Congress.  

But what about Article I, Section 9 of the Constitution?  The government claimed that the appropriation could be found in Section 1402 of the Obamacare act, but here is that section, and you can look for yourself -- there's no appropriation there.  Lacking any helpful text in the statute, the government then argued that the appropriation could be "inferred," outside the text of the law.  How?  Because without the appropriation the law just wouldn't "work" as intended, or something like that.  From Judge Collyer's opinion:

Such an appropriation cannot be inferred.  None of Secretaries’ extra-textual arguments — whether based on economics, ‘unintended’ results, or legislative history — is persuasive.  

As you can see from this, the government's argument really was not very much different from "we have to be able to do whatever we want, or else all hell will break loose."

You probably are now wondering how press secretary Josh Earnest could possibly spin this one.  Here:

This suit represents the first time in our nation's history that Congress has been permitted to sue the executive branch over a disagreement about how to interpret a statute.

OK, but is there any other prior example of a President just going ahead and spending tens of billions of dollars of unappropriated money in defiance of the Constitution?  And is this President's position really that he can just do whatever the hell he wants and spend whatever unappropriated money he wants, in the face of Article I, Section 9, and there's nothing that anybody can do about it?  Earnest did not answer those questions.

But Judge Collyer is just one lonely District Judge, and a GW Bush appointee at that.  It will be a couple of years before we see how her decision fares in the DC Circuit (now firmly in control of Obama appointees) and then the Supreme Court.  Oh, and meanwhile, this being the government, the injunction granted by Judge Collyer does not take effect, and the government gets to just go ahead and spend tens of billions more of unappropriated money while we wait for the final decision.  If you were trustee of a trust and you spent money like this, when you lost in the end you would have to refund it all personally.  Don't count on that happening to Mr. Obama when this saga ends.

And further in the category of "the government can do whatever the hell it wants," we have the famous doctrine known as "Chevron deference."  This doctrine, arising out of a 1984 Supreme Court decision by that name, says that the courts should in nearly all cases go along with the interpretation of a statute put forth by the federal agency that is applying the statute.  I guess the doctrine looked like a good idea to the Supreme Court at the time, especially as we were heading into the era of impossibly-complex multi-hundred-page statutes.  After all, the agencies are the experts!  They are neutral and a-political, and not at all out for their own aggrandizement!  Right?  Somehow it never occurred to the naifs at the Supreme Court that every single "interpretation" of a statute by an agency will turn out to be in the direction of increasing the agency's power and prerogatives.  And how to reconcile the Chevron doctrine with the fact that interpretation of statutes is the very core of the judicial power, vested in the courts, and not the agencies, by the Constitution?  You will not find that question addressed in the Chevron decision.

So you'll be glad to learn that the Harvard Law Review is just out with a major piece by Harvard Professor Adrian Vermeule explaining to all why it just doesn't make sense to have any approach to administrative law other than that agencies get to interpret their own statutes and further, to set their own procedures for adjudicating cases.  (Wait -- adjudicating cases?  Isn't "the" judicial power of the United States vested in the Article III courts?  Oh, you are so naive!)  Excerpt:

[D]evelopments in the law since Mathews was decided in 1976 support a reduced due process role for courts. Those developments include: (1) the “very basic tenet of administrative law that agencies should be free to fashion their own rules of procedure,” announced by the Supreme Court in Vermont Yankee, two years after Mathews, and recently reaffirmed in Perez v. Mortgage Bankers; (2) the watershed of Chevron, decided in 1984, and its key premises that, on grounds of both expertise and accountability, agencies are better positioned than courts to interpret governing statutes; (3) the growing body of caselaw that affords agencies Chevron deference even on procedural provisions in organic statutes — a body of caselaw that has witnessed agencies taking charge of the Mathews calculus, and that squarely rejects due process counterarguments.

The article goes on for 40 pages or so, but you get the gist:  agencies can do whatever the hell they want.  You might think that the Constitution or their statute constrains them, but then they get to "interpret" their statute (always in favor of themselves and against you), and then they get to try the case before their own in-house judge, and then they get to set the procedures in that case, and then when you lose your first appeal is within the agency itself, and then your second appeal is also within the agency itself, and then you finally get an appeal to the court, but it will give deference to the agency on everything from what the statute means to the procedures to the factual findings against you made by an employee of the agency.  In what way is this meaningfully different from "the agency can do whatever the hell it wants"?  Well, thank God we have big-time Harvard professors like Vermuele to explain to all the little people why this is all just fine!

UPDATE, May 13:  John Hinderaker at PowerLine posts a link to Judge Collyer's opinion here.   

New York's Ongoing Housing Madness

I often think that there can't possibly be anything madder than the idea that our government can "save the planet" by forcing our most cost-effective power plants to close, subsidizing the building of thousands of windmills and intentionally inducing the tripling of everyone's energy bills.  But then I see another day's news about developments in the world of government intervention in the New York housing market.  Which is more insane?  You be the judge!

Regular readers here know that the New York housing market is characterized by vast distortions arising from large amounts of subsidized public housing plus a rent-regulation regime that covers about half of private rental apartments.  Many of the rents in the regulated apartments over time come to diverge significantly from market rents, causing landlords to have strong incentives to induce the regulated-rent tenants to leave, and thus in turn causing ongoing conflict and acrimony between the landlords and the tenants.  Just a few days ago I remarked on the obliviousness of the New York Times, when it ran a lead story supposedly discovering a new trend of landlords becoming chummy with their tenants, without noticing the obvious fact that every identified case of such chumminess involved an apartment outside the rent regulation system.  Over on the regulated side, you can be very sure that the landlords and tenants are not chummy.

So yesterday comes news that Eric Schneiderman has indicted one of the larger landlords of rent-regulated buildings in Manhattan, a guy named Steve Croman.  Schneiderman is that ultimate scion of Manhattan, our prep-school-progressive AG (son of long time Cahill Gordon presiding partner Irwin Schneiderman).  Like all NY AGs (and probably like all AGs everywhere), Schneiderman's main business is trying desperately to generate headlines to keep himself in the news and advance his career.  (Most recently he has been seen investigating Exxon Mobil for supposed "fraud" in not sufficiently toeing the government line on climate change.)  And Croman?  It seems that Croman has in recent years been a very aggressive buyer of older apartment buildings in Manhattan that contain large numbers of rent-regulated units.  The buildings are predominantly in the downtown area, including many in my own West Village neighborhood.  Here is a list of well over one hundred buildings that Croman's entities allegedly own.

It seems that Schneiderman has brought not just an indictment against Croman, but also a civil suit.  The indictment and civil complaint do not appear to be available online, but here is the summary from the AG's press release.  From the press release, the gist of the matter would appear to be "fraud" and "tenant harassment."  Some of the conduct Croman is alleged to have committed against his tenants is, to put it mildly, not pretty.  At the same time, there are some very strange things about the AG's two legal proceedings:

• None of the alleged "harassment" committed against tenants is the subject of the criminal indictment; instead, the "harassment" is the gravamen of the civil complaint.  The subject of the indictment is alleged "bank fraud" because, in connection with some $45 million of bank borrowings to buy buildings, "Croman allegedly submitted false mortgage documents to New York Community Bank and Capital One Bank, including rent rolls that falsely reflected market rate rents for units that were actually occupied by rent-stabilized tenants."   Funny, but I can't find any report that any of the loans is in default, or any report that there is any dispute between Croman and his lending banks.  Were the alleged "false mortgage documents" doctored historical records, or were they projections (essentially, projections that the landlord would be able to induce many of the tenants to leave)?  They don't say.  Has it now become "fraud" to make a projection that assumes you can induce a certain number of rent-regulated tenants to leave?
• On the civil side, the main allegations of "harassment" turn out to be -- brace yourself for this -- that Croman and his agents offered his tenants money in return for their moving out.  The horror!  "[Croman] [h]arass[ed] tenants into surrendering their apartments—and their rights under the rent-stabilization laws—in exchange for 'buyouts.'"  And it gets worse: he gave his employees incentives and bonuses if they could get tenants to agree to buyouts!  "[Croman] [i]ncentiviz[ed] his employees and agents to obtain buyouts, at the expense of their other responsibilities.  Employees allegedly refer to rent-regulated tenants as 'targets' and compete with each other to obtain the most buyouts."  

Now, I don't know everything that Croman may have done here, and it's not my purpose to stand up for him specifically.  But I do find it rather telling that our very over-the-top AG, announcing the biggest "tenant harassment" case ever, could not find a single thing that Croman allegedly did in the "tenant harassment" category that he thought was worthy of a criminal charge.  And even as a civil charge, can it really be "harassment" to offer someone money to move out, even if you do it repeatedly and insistently and the amounts you offer are low?  More generally, suppose that Croman's "harassment" went well beyond merely offering buyouts, and that he made life difficult for tenants, such as by failing to move quickly when the heat did not work or the plumbing was leaking.  Do the people who keep the rent regulation laws in place not realize that the Cromans of the world are the inevitable consequence of their efforts to create a world of perfect fairness through government decree?  Croman comes to own more than 100 buildings in lower Manhattan precisely because he is willing to pay more than competing buyers; and he can pay more than competing buyers precisely because he is willing to use more aggressive methods than others to achieve vacancies and thereby get rents up to market.  And thus in the world of rent regulation the decent landlords over time get replaced by the Cromans and contentiousness and acrimony between landlords and tenants become the inevitable norm.  Oh, except in the unregulated piece of the market, where the New York Times is shocked to discover that landlords and tenants are friends.

So is it possible to top the Croman phenomenon as New York's housing madness of the week?  Actually, I think I can do it.  Just about a year ago I posted on a big report from the de Blasio administration, then just out, called NextGeneration NYCHA.  (NYCHA is the New York City Housing Authority, operator of most of the low-income HUD-subsidized housing in the City.)  Using data from the report, I described the "accelerating financial collapse" of New York's low income public housing: $2 billion annual shortfall of rent to cover operating expenses, only partially covered by HUD subsidies, leaving a multi-hundred million dollar and growing annual deficit; $16 billion of identified and unmet capital needs, with no source of funds to pay for them; zero property tax contribution to the City; hundreds of thousand of residents living on some of the world's most valuable real estate and receiving massive subsidies, yet in "poverty" with no way to escape.  NYCHA had hit the inevitable terminal phase of the socialist death spiral.  (The "solution" to the crisis proposed in the City's report was basically to move many of the expenses off NYCHA's budget and hide them in the budgets of other agencies.  There has been no further word from the City on how this is going.)

So what is the housing madness of the week?  We're going to build yet more low-income public housing!  From the New York Times on May 5, "500 Low-Income Apartments to Rise on Housing Authority Land":  

[T]he de Blasio administration plans to announce on Thursday that it will lease public housing land to build nearly 500 apartments for low-income tenants, most of them elderly. The apartments will be in three buildings that will rise up to 16 floors in the parking lots and grassland of housing projects in Brooklyn and the Bronx. 

Now exactly why won't these new low-income apartments promptly enter the same inevitable socialist death spiral that has sapped the older generation of projects?  The Times article gives no clues as to the financial model to be followed for the new buildings, other than to say that the City expects to "generate up to $200 million in fees from developers over 10 years."  OK, but where will those fees come from?   There's no chance that tenant-paid rents from such a project will cover operating costs.  Therefore, they are anticipating HUD subsidies that will cover all shortfalls -- of course with enough extra to pay the $200 million in fees plus profits for the developers -- and also of course will increase regularly over time as expenses go up, and finance capital improvements when needed, and never be subject to cuts from a skeptical Congress that figures out that the taxpayers are getting scammed.  I guess that it has worked out so well thus far that it is time to double down!

UPDATE:  A reader writes to provide this link to the Croman indictment.  It is an extremely unenlightening document, other than to confirm that nothing about the "tenant harassment" allegations finds its way into the criminal charges. 

Energy Policy: Can Anybody Around Here Do Basic Arithmetic?

On Bernie Sanders' website, there is this statement of the utopian future of energy:

Transitioning toward a completely nuclear-free clean energy system for electricity, heating, and transportation is not only possible and affordable; it will create millions of good jobs, clean up our air and water, and decrease our dependence on foreign oil.

OK, let's see what that means: no fossil fuels, no nuclear, undoubtedly no or little hydro.  What's left?  Basically wind and solar.  Sure enough, there's this:

We will act boldly to move our energy system away from fossil fuels, toward energy efficiency and sustainable energy sources like wind, solar, and geothermal because we have a moral responsibility to leave our kids a planet that is healthy and habitable. 

And don't get the idea that Bernie is alone in these fantasies.  In the same March speech where she said "we're going to put a lot of coal miners and coal companies out of business," Hillary also added that her energy policy would "bring economic opportunity—using clean, renewable energy as the key—into coal country."     

Can anybody around here do basic arithmetic?  These ideas can't possibly add up unless the government subsidies necessary to induce the development of wind and solar power are treated as completely costless free money.  Government as the infinite source of costless free money -- actually that's the essence of progressivism, so I don't know why I should have expected anything else from these guys.

Over at the Manhattan Institute, Robert Bryce is out with a new report titled "What Happens To An Economy When Forced To Use Renewable Energy?"   Of course, the answer to the question is that so-called "renewable energy" is much more expensive than the fossil fuel alternatives, and the extra costs necessarily have to get piled on the population somewhere or other -- in higher electricity prices, in higher taxes, in lost jobs or economic opportunities, or something else.  The world "leaders" (if we want to call them that) in so burdening their populations are the big countries of Europe, so we can assess the consequences of these policies by comparing the experience of those countries since they started down this road to our own experience.  Really, it's an unmitigated disaster, particularly in the economic burdens imposed on the lower-income portion of the population.  To take just a few examples from Bryce's report:

• Since the EU adopted its Emissions Trading Scheme in 2005, electricity prices in Europe have increased at about double the rate of increase in the U.S. -- 63% in Europe vs. 32% in the U.S.
• But the increases have been far more dramatic in the countries that have intervened the most in their energy markets:  "During 2008–12, Germany’s residential electricity rates increased by 78 percent, Spain’s rose by 111 percent, and the U.K.’s soared by 133 percent."    
• "In 2016 alone, German households will be forced to spend $29 billion on renewable electricity with a market value of $4 billion—more than $700 per household."
• "Germany’s energy minister has warned that the continuation of current policies risks the 'deindustrialization' of the country’s economy."
• Spain until recently was famous for the most aggressive promotion of wind and solar of all European countries.  How has that worked out?  "[T]he country’s electric utilities have accumulated a $32 billion deficit that must now be repaid, by adding surcharges of about 55 percent to customers’ bills. High energy costs are only adding to Spain’s economic woes. During 2004–14, Spain’s GDP grew by just 0.6 percent per year, on average, and the country’s unemployment rate now stands at about 21 percent."

Meanwhile, at the Alliance for Wise Energy Decisions, John Droz today links to an archived 2014 post by a guy named John Weber titled "Prove This Wrong -- Wind Makes Zero Sense."  If you think that wind energy is infinitely clean and free, this post is filled with lots of data and many pictures that show the extent to which the production of wind energy relies on a massive underlying fossil-fuel infrastructure.  The post kicks off from a 2009 proposal from Stanford Engineering Professor Mark Jacobson to provide 50% of the world's electricity by 2030 by the simple strategy of building lots of wind turbines.  According to Jacobson (who thinks it is a good idea), it would take 3.8 million of the turbines at 5 MWe each to reach the 50% level.  Current humongous wind turbines are only about 2.5 MWe each, so it would take more like 7.6 million of the smaller ones.  Bernie thinks that all power (not just half) should be provided this way, so make that 15.2 million!  Then put aside for the moment that wind turbines only work the far-less-than-half the time when the wind blows at the right speed.  Also put aside the big transmission losses from moving the electricity from where the wind blows to where the electricity is used.  Anyway, Weber's post just focuses on the large and really unavoidable use of fossil fuel energy in building all these wind turbines.

When you see these things from a distance in the countryside, it's hard to realize how truly gigantic they are.  Weber gives the following statistics for just one 2.5 MWe wind turbine:  tower height - 100 meters (328 feet); total height to top of blade - 485 feet; total weight - 2000 tons (!), mostly of steel and concrete.  (Source: Kansas Energy Information Network here.)  Here's a picture of the base of a 2.5 MWe turbine under construction, with some men in the picture to give a sense of the scale.  That's about 45 tons of steel re-bar:

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That base is soon to be filled with a pour of about 1200 tons of concrete.  Then you attach the 328 foot tower.  The tower comes in two sections.  Here's a picture of the smaller (approx. 120 foot) section arriving on a 208 foot long truck:

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To state the obvious,  the whole idea of wind turbines is a non-starter without the enormous underlying fossil-fuel-powered infrastructure to make and deliver the steel, concrete and other materials.  Here is a 2014 post from the Energy Collective acknowledging the same point.

Then there's air travel -- has anyone figured out a way to do that with wind power?  Ocean shipping?  Theoretically, with enough batteries, you could do all-electric cars with wind power.  You can buy a Tesla for around $75,000 today.  But don't worry, the government has plenty of free money lying around to subsidize that down until the price is competitive with the evil fossil-fuel powered vehicles.

Great Chorus Concert In Manhattan

I've mentioned here a few times that I sing in a chorus, but I've never promoted the concerts on this site.  Well, next weekend we have two concerts, one in Manhattan and one in Brooklyn, and they're going to be really fabulous.  It would be great to see some Manhattan Contrarian readers there.  For tickets, follow links below, or you can buy them at the door.  Here are the specifics:

Gregory's Legacy

Perhaps the single greatest influence on western choral music has been the body of plainchant popularly attributed to Pope Gregory. This hour-long program features works inspired by Gregorian chant, culminating in Frank Martin’s stunning a cappella Mass for Double Choir.
 

DESSOFF EXPRESS:

Gregory's Legacy
 
Friday, May 13, 20167:30 pm
Church of Notre Dame
405 West 114th Street (just east of Amsterdam Avenue)
New York, NY 10025
 
Sunday, May 15, 20164:00 pm
Saint John’s Episcopal Church
139 John’s Place
Brooklyn, NY 11217

Tickets: 
$35 Preferred
$25 General Admission ($15 Senior/Student)
Click here for tickets or available at the door.
For more details, please visit dessoff.org.

JACOBSON: Psalm 114
Liber Usualis: Gregorian chant processional
BAIRSTOW: Let all mortal flesh keep silence
LOTTI: Crucifixus a 8
CASALS: O vos omnes
DURUFLÉ: Quatre Motets sur des thèmes grégoriens, Op.1
BRUCKNER: Christus factus est, WAB 11
MENDELSSOHN: Mitten wir in Leben sind, Op.23, No.3
MARTIN: Mass for Double Choir

 

Getting Economic Policy Right Actually Matters -- A Lot

It is said that the rise of Donald Trump to presumptive Republican Presidential nominee is the result of anger of the electorate with the Republican "establishment."  I certainly don't have any evidence to the contrary.  But the problem I have is that the term "Republican establishment" has been used to describe what I see as two distinct groups:  (1) one group consisting of a Washington power elite, including many Republican members of Congress and the Congressional leadership, whose interest is in maintaining a large and ineffective federal structure that passes out lots of money and favors (the money and favors of course going to "our people" rather than "their people"), together with businesses, lobbyists and consultants looking to get in on some of the money and favors; and (2) a second group consisting of a principled movement (including many Congresspersons -- mostly younger ones -- think tanks and, yes, many campaign donors) seeking to advance sound policy ideas of limited government, lessening of government restrictions on economic activity, lower taxes and lower spending.  

Admittedly there can be some overlap between the two groups, let alone substantial co-opting of members of group 2 into group 1.  Still, I think the distinction is critically important; but I'm not sure that Trump or his supporters see there being much of a distinction at all.  Certainly, the focus of Trump's presentation is on attacking the "establishment" and "political correctness," while over on the policy side his prescriptions are vaguely-defined and shifting.  What exactly does being a successful businessman who does "great deals" have to do with being a good President?  

At Town Hall today, economist Thomas Sowell reminds us of the last time we had a highly successful Republican businessman as President:  Herbert Hoover (1929-1933).  Sowell's column focuses more on foreign policy issues, but I'll look at the economic policy side.  It turns out that Hoover's main economic policies bear a remarkable resemblance to those proposed by Trump.  The two big ones were trade protectionism and raising wages by government coercion.  They led to disaster.

I don't know if they even teach kids any more about the Smoot-Hawley tariff of 1930.  In my education -- both high school and college -- it was repeatedly cited as exactly what not to do in economic policy; but maybe today it has gone into a memory hole.  The economy had entered a recession by mid-1929, and the stock market crashed in October of that year.  But by spring 1930 the market was edging back to its levels of early 1929, and many were optimistic that recovery was beginning.  Then came the Smoot-Hawley tariff in June 1930.  Here is a brief history of the tariff from the Economist magazine.  Famously, a group of no less than 1,028 economists submitted a petition to Hoover urging him to veto the bill; but he signed it.  Then the bottom fell out of the economy.  Trade relations with other countries were soured, and many retaliated.  Imports to the United States proceeded to decline 40% from 1930 to 1932.  From a Wikipedia summary:

Frantic attempts to shore up the economies of individual nations through protectionist policies such as, the 1930 U.S. Smoot–Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. . . .  By late 1930, a steady decline in the world economy had set in, which did not reach bottom until 1933. 

Then there was Hoover's policy on wages.  There was no federal minimum wage in 1929 (the first one at the federal level was adopted in 1933, immediately after he left), but that didn't stop Hoover from using government coercion to try to fix wages at above-market rates.  From a summary by economist Lee Ohanian in Forbes in 2009:

Hoover . . .  held [meetings] at the White House with major industry in late 1929 that included General Motors, Ford, U.S. Steel and DuPont, and advised them not to cut wages.  Hoover told industry that maintaining wage levels would minimize the severity of a downturn and help him keep peace with labor. . . .  Following these meetings, industry publicly acknowledged their compliance with Hoover’s wage program as they held wage rates fixed.  But declining prices and productivity, coupled with Hoover’s program of fixing wages, significantly increased industrial labor costs. Shortly after Hoover’s meetings, the industrial sector began to contract rapidly. Between October 1929 and September 1930, industrial hours worked had declined by nearly 30%.

Now I admit that it is not possible to segregate out any one or two things as being the only or even the main factors that caused the Great Depression or led to it being so long.  Some believe that other factors -- such as contraction of the money supply or failure of the government to enact a "stimulus" -- were of equal or more importance.  But few believe that the tariff and wage policies were not at least significant factors in bringing on and then prolonging the Depression.

In his four brief years, Hoover did enormous damage to the Republican brand.  The Republicans lost record numbers of Congressional seats to the Democrats in the 30s, and were locked out of the Presidency for 20 years.  As late the the 1980 election, the memory of the terrible economic times of the early 30s was still used against Reagan ("Hoover with a smile" according to Democrat House Speaker Tip O'Neill).  But Reagan's economic policy was the opposite of that of Hoover.

Trump?  While he has been unspecific, it is clear that trade protectionism, including increased tariffs, is something he plans to pursue.  And according to the Wall Street Journal this morning, Trump spoke favorably yesterday about raising the minimum wage.  How high?  No word.

But the experience of Hoover shows that it is very important to get economic policy right.  To help out Mr. Trump, I'm going to offer my economics lecture of the day.  The simple basis for all sound economic policy is the proposition that all wealth comes from people buying and selling stuff with each other (the term "stuff" here includes both goods and services).  The process of people buying and selling stuff (sometimes going under the name of "capitalism") may not lead to outcomes to everyone's liking, but it is just a fallacy to think that the government can increase wealth by imposing restrictions on people buying and selling stuff. 

In the area of trade, consider this.  Suppose you work for a company that makes widgets and sells them for $100 each.  Now someone in China figures out how to make the widgets there and deliver them to the U.S. for $90 each.  (Or it could be your own company that figures out how to make the widgets in China and get them to the U.S. for $90 each -- it doesn't make any difference.)  The fact is that the customers don't care where the widgets are made and they aren't going to pay more than $90 any more.  This is not a consequence of "bad trade deals."  It is an inevitable consequence of people having the freedom to buy and sell stuff as they see fit.  As for you, the market is telling you that your labor is too valuable to waste it making these widgets any more.  It may be a very painful process for you to find the next thing for yourself, but that doesn't mean that the market is wrong on this.   

But what is the alternative?  Over the years, what policymakers come up with over and over again is a tariff, and that also seems to be where Trump is going with China and Mexico.  Slap a $15 tariff on widgets from China, and suddenly your $100 widgets have a market again.  In fact, the owner of the business may even raise his price to $104.  I'm sorry, but this is a terrible idea.  For you, it means maybe you can hang on in your job for a few more years -- until somebody in China figures out how to make the widgets for $84.  Your wages meanwhile will surely stagnate.  Extra profits will go to the boss, not you, and some will go to the campaign contributions to the pols to keep the tariff in place and increase it.  Everybody else in America has to pay $14 extra for every widget they buy, making all those people poorer.  The higher value jobs that you and your colleagues could and should have found go undone.  And all of this is before China imposes some countervailing tariff on the United States.  Studies of tariffs always find that the costs to others in society exceed the value of jobs "saved" by huge multiples -- often $200,000 or $250,000 in cost per $40,000 job saved.  This is a total loser strategy.

Is there any chance that Trump can come to understand the disaster of tariffs and minimum wages?  Got me.                        

The One Thing That More Government Money Will Definitely Do Is Fail To Fix The Problem

I just can't get over the infinite naivete of the progressive mind in its belief that spending government money to fix a problem will actually fix the problem.  Can anybody name a single example where that has ever occurred?  Actually, it is completely impossible for a government agency to fix the problem it is supposed to address, because fixing the problem would run directly counter to the fundamental imperative of all bureaucratic agencies, which is to grow the agency and its staff and budget.  Bureaucratic agencies do not operate contrary to their fundamental imperative.  Period.

As just the tiny example for the day, consider the case of TSA and its airport security screening mission.  Think about the subject for as long as three seconds, and you will realize that forcing the public to wait in long and unpleasant lines is the surest way for TSA to put pressure on Congress and the President to grant it more staff and a bigger budget.  Suppose they get a big budget increase; what then?  The answer is that things may improve marginally for a few months, but then will immediately revert to the norm of long and unpleasant waits.  Hey, the tactic worked once!  Of course they will do it again!

And yet there we have the lead editorial of the New York Times today, "Safe Ways To Shorten Airport Security Lines."   And what, pray tell, is the answer?  Easy:  Give TSA more money!  And more staff!  And not just that:

In addition to more money, the T.S.A. needs greater flexibility to increase spending when demand for air travel surges. For example, Congress should allow the department to tap into more of the money the government collects from a security tax levied on tickets when traffic grows faster than projected. In the past, Congress has diverted some of that revenue to the general fund. . . .  [Also,] give local T.S.A. managers the power to spend more money on overtime during busy periods without consulting headquarters.

OK, you knew that was going to be the answer, because for the New York Times, more government money is the answer to every known human problem.  And what about the evidence that government spending always and everywhere makes worse the problems that it is supposed to solve?  Please, we can't be troubled looking at actual evidence.  

Along similar lines but on a more consequential scale, David Horowitz's Frontpage Magazine today has an article by John Perazzo titled "How The Liberal Welfare State Destroyed Black America."   It's a familiar story, often discussed here, but it needs to be repeated endlessly because with anything less than endless repetition it just doesn't ever seem to sink in.  Perazzo runs through evidence of how the massive liberal welfare state launched with the War on Poverty in the 60s -- $22 trillion in spending (constant 2012 dollars) over about 50 years! -- has made things worse for the black family on literally every dimension.  He covers the famiiar litany of poverty, child poverty, decline in marriage, and explosion in illegitimacy, particularly emphasizing improvements in these metrics pre-War on Poverty followed by precipitous deterioration post-War on Poverty.  

During the nine decades between the Emancipation Proclamation and the 1950s, the black family remained a strong, stable institution. Its cataclysmic destruction was subsequently set in motion by such policies as the anti-marriage incentives that were built into the welfare system. As George Mason University professor Walter E. Williams puts it: “The welfare state has done to black Americans what slavery couldn't do, what Jim Crow couldn't do, what the harshest racism couldn't do. And that is to destroy the black family.”

However, progressives get to feel really good about themselves because the government is spending boatloads of someone else's money to address the problem.