If you're like us, you just watched Steve Rattner on Morning Joe do a frankly surreal bit as a post-debate fact-checker, focusing of course exclusively on Trump “lies.” Why does a private equity baron want to do stints as a contributor on a small cable news channel? It's bizarre. 

What's even more bizarre is that his bit included stylized charts, which are not the actual charts. One of the charts made the claim that washing machine tariffs increased prices, and that when the tariffs expired, the price came down. This, however, appears to be false.

As Jeff Ferry of Prosperous America notes, washing machine prices rose by less than inflation. The piece, which is interesting throughout, also claims that “[t]he 2018-2023 washing machine tariffs led to a larger, more competitive U.S.-based residential washer industry, including the creation of over 2,000 new jobs at two Korean-owned companies which opened U.S. manufacturing facilities in the southern U.S.”

The debate around trade, so vital given the state of US manufacturing and the state of the presidential race, has been disappointing. When listening to many trade supporters, one feels that one is listening to a religious zealot, not an economic analyst. 

For example, it's one thing for Kamala Harris to claim that the entirety of the cost of tariffs would be passed on to customers. It's quite another to see ostensibly serious policy analysts repeat this claim, assuredly, and never with data, and never, even, with more than a vague gesture at theory. 

Nobody, least of all tariff proponents, denies that some portion of the cost of tariffs is borne by consumers. But the idea that all of it, 100%, would be borne by consumers is absurd. That's not how taxes work. That's not how any tax has worked, ever, in the history of any country. As anybody who has even glanced at this issue knows, tax incidence—the measure of who ultimately pays a tax—is an enormously complex and contentious field of tax policy. Perhaps tariffs are unique in this regard. If so, nobody has explained why they think that.

Tariff proponents believe that some part of the cost of tariffs will be borne by consumers, naturally, and yet they still support tariffs, because they believe they will bring other benefits to the economy, which will therefore leave those same consumers (who in many cases are also producers, and savers) better off overall. Tariff opponents like to pretend they are unaware of this.

For now we can only endorse this outburst by Carnegie economist Michael Pettis, which we will quote in extenso because it is so good:  “[M]ost discussions of tariffs and inflation completely miss the point. The discussion assumes that a tariff raises the price of the tariffed product (of course it does) but has no other impact on the overall economy. The discussion assumes, among other things, that tariffs have no impact on tax collection or profits, when clearly they do. Much more importantly, it assumes tariffs have no impact on demand for non-tariffed goods or (most astonishingly) on total domestic production. But this makes the discussion totally surreal. Inflation is not what happens when the price of a single product rises. It is what happens when total demand rises relative to total supply. But the whole point of tariffs is to boost domestic production, i.e. total supply. This doesn’t mean they always do, but they have for much of US history. What’s more, countries that more aggressively implement policies that boost domestic production (the manufacturing surplus economies) seem to have lower inflation than deficit economies like the US.”

Adds Pettis, and we strongly co-sign: “I am not arguing that tariffs don’t affect prices, or that they are always a good thing. I am just pointing out that for most economists and policy advisors, discussions over tariffs have more to do with proclaiming one’s faith than with the analyzing the economy.”

We need to have better arguments about trade.

Policy News You Need To Know

#SpaceX – Given what we wrote yesterday on how various government bodies seem intent on sabotaging SpaceX, it's a good time to point out how extraordinary the company's successes are, with the latest being the first private spacewalk from the company's Polaris capsule.

#SpringfieldHaitians – The story of Haitians capturing and eating animals in Springfield, OH is in some sense irrelevant to the broader policy question. In another sense it is very relevant. It is first of all a media story: the local authorities said they didn't happen, so it didn't happen, full stop, in spite of dozens and even hundreds of eyewitness or secondhand reports. This is unserious. The media simply doesn't do a very good job, especially in ideologically contentious matters. And the story relating to immigration is a reminder that many people from third-world cultures simply have very different presuppositions and attitudes than people who live in Western, first-world cultures. Yesterday at lunch a friend told us the story of a friend of his, a thoroughly elite-Western-educated man from the third world who, after a short stay in London, asked about Hyde Park: “I wonder who this park belongs to. It must be a very powerful man, because nobody dares to steal his birds.” The notion of a public space, where special rules obtain, is not intuitive, and is in fact a Western particularity. This is why, for example, some people like to play loud music on public transportation, and other people find it offensive. Elon Musk shared this video of a young Haitian woman discussing the practice of animal sacrifice in Haitian voodoo. Her story of her father immigrating to the US in the 1960s and looking down on the majority of Haitians practicing voodoo matches with what we wrote about the history of Haiti several days ago: “Haitian dictator François “Papa Doc” Duvalier, who ruled from 1957 to 1971, had a deliberate policy of kicking out the country's educated elites as a threat to his power. Since France had no explicit laws against racial mixing (or racial laws period, though of course in practice virtually all the slaves were black Africans), even before independence Haiti had a mixed-race educated bourgeoisie. So this policy from Papa Doc, who was an overt black nationalist, had a racial as well as political and socioeconomic component. Anyway, the point is: refugees fleeing from Haiti, an incredibly violent society whose previous regime heavily selected against intelligence and bourgeois norms generally, for all that their plight elicits sympathy are, in large part, not people equipped for life in a first-world country.” We do not consider the issue of Haitians kidnapping and eating pets or animals in public parks settled, at all, and neither should you.

#Environment – FAI's Thomas Hochman, an excellent regs and infrastructure expert, has a very astute observation about a recent controversy. First the controversy. The LA Times reports that “[c]rews have begun chainsawing and shredding thousands of protected Joshua trees to make way for a sprawling solar field in the Mojave Desert. Century-old trees become a pile of dust.” Conservation activist Benji Backer commented that “[t]here’s nothing pro-environment or pro-climate about decisions like this.” Thus Hochman's comment that “this is actually precisely the tension [between] conservation and climate action that will play out hundreds and hundreds of times across the [A]merican [W]est in the next two decades.” He is totally right. For right-of-center people this will be the occasion for much mirth, as in many cases that tension will involve well-off liberals who are all about saving the environment until an environmental project blocks the view from their multimillion dollar mansion. The obvious response here is that we should build nuclear modular reactors instead of solar panel farms. But since we apparently don't want to do that, Hochman's prediction will play out.

#Life – The post-debate battle of the fact-checkers continues. During the debate, President Trump correctly pointed out that Democrats support abortion until the moment of birth, and even infanticide in the case of children born during botched abortions. Legacy media fact-checkers are universal in denying this. As NR's Dan McLaughlin (who is anti-Trump, for what it's worth) points out, this is simply true.