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John Yoo is back this week, bringing the 3WHH up to full strength again after last week's astonishingly congenial episode, which can mean only one thing—not even high tariffs, which this week's host (Steve) vainly tried to impose on ths discussion—could stop a vigorous free trade in ideas.
After our discussion of where the tariff matter stands as of the end of this week, we turn our focus to the week's continuing legal and constitutional developments of the Trump juggernaut, most especially his heretofore neglected instruction to regulatory agencies to review and eliminate any and all rules and regulations that might now be considered unconstitutional in light of several Supreme Court opinions over the last few years that have started to curtail the reach and power of the administrative state.
Finally, we try out a slightly new ending for this episode, with topical exit music designed in part to annoy Lucretia. Mission accomplished!
John Yoo
'Lucretia'
Steve Hayward
Discussion (7)
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If I (a lurking economist) had to come up with a rough and ready figure for the impact of all trade barriers, tariff and nontariff, I might offer up the trade deficit for each country as an approximation, rather than try to separately estimate the impact of every tariff, quota, tax, subsidy, regulation, etc., etc., and “buy Burkina Faso” ad campaign for every country and every product bought or sold in the US. That number would tend to overstate the impact of trade barriers, but—like my Grandad Skinner told me after watching him haggle with a retired Methodist minister over the price of a rented mule—you never start the bidding at the lowest price you would accept. Using the trade surplus as a shortcut makes even more sense knowing that the goal of the exercise is to make every painstaking calculated trade barrier estimate, obsolete. So, John’s suggestion for making the full calculation doesn’t fit well with the DOGE goal of government efficiency (and other oxymorons).
So, while not defending every Mr. Trump does, I will attempt to take him seriously , but not literally. I also accept the fact that “All [economic] models are wrong, but some are useful.”
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Didn't US automakers go through a decade long episode where South Korea made minor changes to their safety regulations that prevented US imports? Each time the US complied, a new reg would prevent import and the Korean manufacturers had enough privately - announced advance notice so that their sales were not interrupted.
Non tariff barriers exist all over the world, and the US has its share. Bring a tank of a used Mercedes (originally titled to EU specifications) to the US and it can need reinforcement in doors and bumpers to comply with US Dept. of Transportation standards, and you can't register the vehicle without modification. Not sure what the state of regulations are now but strict EU emission and milage standards were inadequate for US roads and vice versa! There's a lot of game playing.
That's the point of the tariff sledge hammer Trump is swinging. That's why they're being used to engage in trade negotiations, not to to simply match tariff rates.
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US prosperity is currently dependent on printing the global reserve currency. Why make anything if you can just print money? So that's what we do. The asymmetric trade rules amplify this dynamic.
We spend printed money to maintain a global empire with the world's biggest most lavish military and extensive domestic and international patronage networks that solidify the ruling regime. In turn, our global power can be used to ensure the dollar remains the global reserve currency. If well run, it's a virtuous cycle that's very difficult to disrupt.
But it's actually been poorly run for over a decade with really awful people maneuvering to be first in line for the cantillon bucks and the ascension of evangelical gay race communism. It can’t go on forever. When it stops, if not carefully unwound, it’s going to hurt.
The Trump tariffs are disruptive to all of this. Do they correct the problems or will they bring it all crashing down in a really bad way? I don't know what happens next.
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This edition of the podcast, which made brief illusions to FDR, was posted on April 12 -- the 80th anniversary of FDR's death. FDR's death and end of the WWII are now as far in the past as the end of the Civil War was in 1945.
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