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Volume 20, Issue 15: April 10, 2018
- Trump’s Trade War Is MAD
- Pope Francis and the Millennials: Not a Match Made in Heaven
- Violence Against Women Act: Critics Sidelined by Congress
- Venezuela’s Mass Exodus Warrants Neighborly Compassion
- Independent Updates
Contrary to President Trump’s glib utterances on Twitter, tit-for-tat tariff skirmishes aren’t “easy” to win. They provoke mutually assured destruction (MAD). One reason many people still can’t see that the president is playing with fire involves the murky language of international economics. To many ears, “capital surplus” doesn’t sound nearly as positive as “trade deficit” sounds negative. Yet the two concepts together add up to a “balance of payments.”
If all that seems too abstract, another problem is that the issue is regrettably couched in terms of the nation state, as if one country gains at the other’s expense. In fact, both parties expect to gain from a voluntary trade, be they individuals, businesses, or governments. As Independent Institute Senior Fellow Robert Higgs writes in The Beacon: “The location of the trading partners has no economic significance whatsoever.” Writing in Forbes, Independent Institute Research Fellow Art Carden calls for declaring victory and going home: “The wisest course of action in a ‘trade war’ is unilateral disarmament.”
But if the Trump administration doesn’t stop playing with fire, Americans could find themselves victims of the U.S. debt bomb sooner rather than later, as China, the largest holder of U.S. Treasury securities after the Federal Reserve, cries “Enough is enough” and decides to retaliate in the international bond market. Such as move could backfire, however. As Independent Institute Research Fellow Craig Eyermann writes at MyGovCost News & Blog: “To borrow a phrase from J. Paul Getty: ‘If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.’” Fortunately, China’s holdings of $1.17 trillion in U.S. treasuries (as of January) give Beijing a stake in America’s fiscal health. Whether or not the policymakers there (or those in Washington, DC) are rational actors is, of course, a different matter.
Against the Whole Concept and Construction of the Balance of International Payments, by Robert Higgs (The Beacon, 3/27/18)
The Only Way to Win a Trade War Is Not to Fight, by Art Carden (Forbes, 4/5/18)
China’s “Nuclear Option” For Its U.S. Debt Holdings?, by Craig Eyermann (MyGovCost News & Blog, 4/9/18)
The Lighthouse has featured much commentary on Pope Francis’s economic and environmental agenda this year. Our latest op-ed in the series—written by Independent Institute Senior Fellow Lawrence J. McQuillan and Maryland Public Policy Institute Senior Policy Analyst Hayeon Carol Park, and published in The Hill—contrasts the pope’s views on market entrepreneurship and private charity with those of millennials.
According to public opinion surveys, almost six out of 10 millennials think governments have made it too difficult to start a business. Pope Francis’s hostile stance toward market liberalization—the preponderance of evidence suggests he views wealth creation as a zero-sum game—doesn’t help. Similarly, whereas millennials generally value charitable giving, a corollary of their quest to find meaning in their careers, Pope Francis’s call for more government taxation and redistribution implies that millennials should have fewer resources for their philanthropic pursuits.
“Millennials should oppose Pope Francis’s dangerous policy agenda, which hurts their ability to start businesses, innovate, and support causes they care deeply about through effective private charity,” write McQuillan and Park. For a fuller treatment, see their chapter in the Independent Institute book Pope Francis and the Caring Society, edited by Robert M. Whaples (foreword by the late Michael Novak). The book’s reviews, which grow in number virtually by the day, are also worth checking out.
Pope Francis’s Economic Agenda Does Millennials No Favors, by Lawrence J. McQuillan and Hayeon Carol Park (The Hill, 3/31/18)
Pope Francis and the Caring Society, edited by Robert M. Whaples
Written by Senator Joe Biden, signed by President Bill Clinton, and reauthorized by President Barack Obama, the Violence Against Women Act (VAWA) is often depicted as essential for remedying injustices. But if justice were the act’s raison d'être, its critics would get a fair hearing in Congress. Instead, their calls for a seat at the table are summarily rejected, as when the Coalition to End Domestic Violence unsuccessfully reached out to Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa).
“Objections and questions are met with a backlash that demonizes the source as anti-victim or rape apologists,” writes Independent Institute Research Fellow Wendy McElroy in The Hill. “The accusations silence some critics and marginalize those who continue to speak out.”
The critics deserve to be heard. Some charge that VAWA undermines family preservation, shows no real success in reducing domestic and sexual violence, has weak safeguards to prevent misspending, and circumvents due-process protections for the accused. “After a year as president, [Trump] still has not nominated a candidate as director of the Office on Violence Against Women,” McElroy writes. President Trump’s alleged support for VAWA therefore engenders no confidence in a good outcome no matter where one stands on the legislation.
Violence Against Women Act Is a True Produce of Washington’s Swamp, by Wendy McElroy (The Hill, 4/5/18)
Liberty for Women: Freedom and Feminism in the Twenty-First Century, by Wendy McElroy
Already this year half a million Venezuelans have crossed into neighboring Colombia, about the same number as entered in all of 2017. Peru, Brazil, Panama, Spain, the United States, and other countries have also seen an influx as more than 4 million Venezuelans have fled the political repression and economic disaster that President Nicolás Maduro, protégé of the late Hugo Chávez, has inflicted on his people.
“This exodus from Venezuela is expected to continue, since the International Monetary Fund forecasts that by the end of 2018 the Venezuelan economy will have shrunk to half of what it was in 2013,” writes Alvaro Vargas Llosa, Senior Fellow at the Independent Institute and author of Global Crossings: Immigration, Civilization, and America.
Making matters worse, many of Venezuela’s refugees are getting a cold reception from their host countries—countries whose governments in many cases were slow to recognize the dangers posed by Chavez and his successor. “The receiving countries need to put their imagination and compassion to work and come up with the most orderly and least burdensome way to welcome these victims of Chavismo instead of rejecting them,” concludes Vargas Llosa.
Fleeing Venezuelans Need Refuge in the US, Latin America and Elsewhere, by Alvaro Vargas Llosa (FoxNews.com, 3/31/18)
Global Crossings: Immigration, Civilization, and America, by Alvaro Vargas Llosa
The Beacon: New Blog Posts
- Think Twice about Bringing Back U.S. Manufacturing Jobs, by Robert Higgs
- Review: Ready Player One Entertains Using Fear of Tech Oligarchy, by Sam Staley
- Statism’s First Casualty Is the Truthful Use of Language, by Robert Higgs
- FDA Cracks Down on Online Eye-Exam Company, by Raymond March
- The FDA Plans to Regulate Nicotine in Cigarettes, by Raymond March
MyGovCost: New Blog Posts
- China’s “Nuclear Option” For Its U.S. Debt Holdings?, by Craig Eyermann
- Fiscally Troubled Connecticut Bails Out Nearly Bankrupt State Capital, by Craig Eyermann
- Medi-Cal Misery Loves Company, by K. Lloyd Billingsley
