One of the broader reasons I am running for Nevada State Treasurer is to fight the rise of socialism in all forms. I am against political offices that invest taxpayer money to virtue signal by using ESG or DEI to guide investment decisions and philosophy. I am for private markets. I am for reducing as much debt as you possibly can in the most economically efficient manner you can to make room for private markets.

Trump lost at the Supreme Court today on tariffs. Here is what the market thought. Nobody knows where it will end up. It was a 6-3 decision. You can easily guess 50% of the three. The others were Gorsuch, Coney-Barrett, and Chief Justice Roberts.

People who think in terms of Economics 101 will cheer. Tariffs are not a great thing for free trade. As a free market capitalist, I don’t love them at all. Most of the economists who were decrying tariffs also had a bad case of TDS. Few were rational. If you made a Venn diagram, you could lie the two circles right on top of each other.

Two that were rational were Craig Pirrong and John Cochrane. Some of their thoughts are below.

My friend, economics professor Craig Pirrong had a very good blog up in April on tariffs that I agree with.

The confusion over whether this is actually a negotiating tactic, or whether Trump is in fact a true believer that tariffs are great policy is actually necessary for it to be an effective negotiating tactic. Game theory long ago demonstrated that a reputation for doing seemingly irrational things requires that there be a positive probability that someone is in fact irrational. So the uncertainty over whether Trump is truly crazy is a necessary condition for him to implement a crazy-like-a-fox negotiating strategy. Even if he is really just bluffing, he has to credibly signal that he’s not, and he does that by proclaiming his love for tariffs.

In sum, the cramped vision of those melting down and freaking out over Trump’s démarche precludes a serious analysis of it. Econ 101 says–tariffs are bad economic drugs, M’kay. Agreed!–in an otherwise first best world. But since we are clearly not in that world, and that Trump has identified (inarticulately, as is his wont) ways in which the world is fallen, it is not necessarily the case that the extraordinary measures that he has put forward are bad. Especially if he is using them to extract concessions that eliminate or at least mitigate the policies that currently distort world trade, production, and consumption.

That is, contrary to the critics, one cannot conclude that the tariff bomb is destructive a priori, based on Econ 101. One must grapple with the much more daunting challenge of evaluating its effect in a decidedly fallen world.

The Grumpy Economist, John Cochrane responded to Trump’s WSJ op-ed here. Cochrane was no fan of tariffs, but not because of anything except capital flows. I think this point he made is salient and worth thinking about:

Tariffs as negotiating bludgeon is something that I and fellow economists underestimated last spring. A threat of something that hurts the US, but hurts the foreigner more—and especially hurts politically more than economically — can be used to coerce all sorts of behavior.

I worry though about the repeated game theory aspect. Tariffs put on are hard to take off. Domestic producers get used to protection and want more. The multilateral approach allowed the President to say “I’d love to give the chicken-wing industry protection but those darn international treaties won’t let me.” That’s gone.

More importantly, in the economic statecraft angle, we have now bludgeoned allies to do our bidding and carve up markets. They are hurting from the humiliation, and see a more dog-eat-dog world. When China blockades Taiwan, we will want to call them up and say “we really need your help to enforce our sanctions on China.” Will the Europeans, Canadians, and Latin Americans really forsake profitable trade with China to help us on that geopolitical quest? Sometimes flowers and chocolates are better than a big stick.

I think you will have to ignore the hot takes in the press on the potential outcomes of this or why they ruled the way they did. Most of them don’t understand economics, let alone game theory. For sure, the Democrats will spin this as a victory only because they hate Trump. For sure, Trump will lash out.

Locally, do you think the newspapers that are blaming the downturn in tourism on Trump’s tariffs will speculate that tourism will go up? Vegas tourism wasn’t down due to the tariffs. It was the first, second, third, and fourth degree pricing system instituted by casinos to get as much producer surplus from each traveler as they could.

The SCOTUS didn’t make tariffs illegal. What they did do was curb Presidential power. Of course, there are double standards. Biden, Obama, and other Presidents put tariffs on at will with no challenges.

Trump has to go through Congress to put the tariffs on that he wants to put on. But there are other ways. I am sure the administration will examine the legal language and try to re-tariff the countries they want to tariff.

Even with tariffs, many countries didn’t open up their markets because they had internal regulations that stopped free trade. France and wine is one example, but there are plenty of others.

However, if Trump wants to truly make gigantic economic gains for Americans by encouraging foreign investment into the US, he can deregulate. Deregulate with abandon. Democrats, NGOs, and organizations will litigate that in court, too. It is the president who runs the executive branch, and Trump has full power to engage in that. It’s better if he does it through Congress, but see Craig’s statement above. The world has fundamentally fallen.

How do we know it has fallen?

Because America is a capitalist nation, we are seeing the rise of socialism all across America. Socialism is antithetical to capitalism. Socialism is forced servitude. Capitalism brings hope and opportunity.

These downballot state races matter now. If you don’t think they do, simply take a peek at what happened in Minnesota. If a capitalist were the State Treasurer, the house of cards would have fallen sooner. We are overtaxed as a country, and the fraud that exists in government is a large reason why.

If you believe that, support me here. Let’s go.

One of the broader reasons I am running for Nevada State Treasurer is to fight the rise of socialism in all forms. I am against political offices that invest taxpayer money to virtue signal by using ESG or DEI to guide investment decisions and philosophy. I am for private markets. I am for reducing as much debt as you possibly can in the most economically efficient manner you can to make room for private markets.

Trump lost at the Supreme Court today on tariffs. Here is what the market thought. Nobody knows where it will end up. It was a 6-3 decision. You can easily guess 50% of the three. The others were Gorsuch, Coney-Barrett, and Chief Justice Roberts.

People who think in terms of Economics 101 will cheer. Tariffs are not a great thing for free trade. As a free market capitalist, I don’t love them at all. Most of the economists who were decrying tariffs also had a bad case of TDS. Few were rational. If you made a Venn diagram, you could lie the two circles right on top of each other.

Two that were rational were Craig Pirrong and John Cochrane. Some of their thoughts are below.

My friend, economics professor Craig Pirrong had a very good blog up in April on tariffs that I agree with.

The confusion over whether this is actually a negotiating tactic, or whether Trump is in fact a true believer that tariffs are great policy is actually necessary for it to be an effective negotiating tactic. Game theory long ago demonstrated that a reputation for doing seemingly irrational things requires that there be a positive probability that someone is in fact irrational. So the uncertainty over whether Trump is truly crazy is a necessary condition for him to implement a crazy-like-a-fox negotiating strategy. Even if he is really just bluffing, he has to credibly signal that he’s not, and he does that by proclaiming his love for tariffs.

In sum, the cramped vision of those melting down and freaking out over Trump’s démarche precludes a serious analysis of it. Econ 101 says–tariffs are bad economic drugs, M’kay. Agreed!–in an otherwise first best world. But since we are clearly not in that world, and that Trump has identified (inarticulately, as is his wont) ways in which the world is fallen, it is not necessarily the case that the extraordinary measures that he has put forward are bad. Especially if he is using them to extract concessions that eliminate or at least mitigate the policies that currently distort world trade, production, and consumption.

That is, contrary to the critics, one cannot conclude that the tariff bomb is destructive a priori, based on Econ 101. One must grapple with the much more daunting challenge of evaluating its effect in a decidedly fallen world.

The Grumpy Economist, John Cochrane responded to Trump’s WSJ op-ed here. Cochrane was no fan of tariffs, but not because of anything except capital flows. I think this point he made is salient and worth thinking about:

Tariffs as negotiating bludgeon is something that I and fellow economists underestimated last spring. A threat of something that hurts the US, but hurts the foreigner more—and especially hurts politically more than economically — can be used to coerce all sorts of behavior.

I worry though about the repeated game theory aspect. Tariffs put on are hard to take off. Domestic producers get used to protection and want more. The multilateral approach allowed the President to say “I’d love to give the chicken-wing industry protection but those darn international treaties won’t let me.” That’s gone.

More importantly, in the economic statecraft angle, we have now bludgeoned allies to do our bidding and carve up markets. They are hurting from the humiliation, and see a more dog-eat-dog world. When China blockades Taiwan, we will want to call them up and say “we really need your help to enforce our sanctions on China.” Will the Europeans, Canadians, and Latin Americans really forsake profitable trade with China to help us on that geopolitical quest? Sometimes flowers and chocolates are better than a big stick.

I think you will have to ignore the hot takes in the press on the potential outcomes of this or why they ruled the way they did. Most of them don’t understand economics, let alone game theory. For sure, the Democrats will spin this as a victory only because they hate Trump. For sure, Trump will lash out.

Locally, do you think the newspapers that are blaming the downturn in tourism on Trump’s tariffs will speculate that tourism will go up? Vegas tourism wasn’t down due to the tariffs. It was the first, second, third, and fourth degree pricing system instituted by casinos to get as much producer surplus from each traveler as they could.

The SCOTUS didn’t make tariffs illegal. What they did do was curb Presidential power. Of course, there are double standards. Biden, Obama, and other Presidents put tariffs on at will with no challenges.

Trump has to go through Congress to put the tariffs on that he wants to put on. But there are other ways. I am sure the administration will examine the legal language and try to re-tariff the countries they want to tariff.

Even with tariffs, many countries didn’t open up their markets because they had internal regulations that stopped free trade. France and wine is one example, but there are plenty of others.

However, if Trump wants to truly make gigantic economic gains for Americans by encouraging foreign investment into the US, he can deregulate. Deregulate with abandon. Democrats, NGOs, and organizations will litigate that in court, too. It is the president who runs the executive branch, and Trump has full power to engage in that. It’s better if he does it through Congress, but see Craig’s statement above. The world has fundamentally fallen.

How do we know it has fallen?

Because America is a capitalist nation, we are seeing the rise of socialism all across America. Socialism is antithetical to capitalism. Socialism is forced servitude. Capitalism brings hope and opportunity.

These downballot state races matter now. If you don’t think they do, simply take a peek at what happened in Minnesota. If a capitalist were the State Treasurer, the house of cards would have fallen sooner. We are overtaxed as a country, and the fraud that exists in government is a large reason why.

If you believe that, support me here. Let’s go.