Category Archives: political economy

How to Handle Federal Lands

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Terry Anderson, of Stanford University’s Hoover Institution, has some thoughts on how best to handle Federal lands, a unaggregated expanse of some 640 million acres, 28% of US land. In their essence, his ideas are to handle those lands in a business-like manner.

…three options: raise the price of goods and services (timber, minerals, visits to national parks), reduce labor costs and liquidate money losers.

He’s right, but those are the second steps that need to be taken, not the first step.

Twenty-eight percent is far too much of American land to be retained by the Federal government. The necessary first step is the transfer of those lands to their respective States.

Anderson’s ideas, fleshed out some in the fulness of his op-ed, does recommend [t]urn[ing] ownership of some federal lands over to the states, but that’s wholly inadequate. The vast majority of those lands should be turned over.

The amount that might be retained by the Federal government, to suggest a percentage for opening discussion, would be less than 5%, and the retention purposes might be limited to protecting some historical and scenic areas for public park use, to finishing cleaning up Superfund sites of their contamination—following which those sites should be returned to the States—to maintaining (and I say expanding) our Strategic Petroleum Reserve, to siting military installations, and to setting up, or finishing, nuclear waste storage sites.

The Federal government has no legitimate interest in withholding from State and private use so huge an expanse of our land. Selling it to the States and to private citizens would raise funds for paying down our national debt, too. The modern equivalent of a dollar an acre comes to mind for a suitable sale price—that original one dollar price wasn’t so much for raising money—though it did for that then small Federal budget—than to transfer the land to owners who, by paying for it, would have some incentive to make economic-based use of it.

The retained land then should be managed IAW business principles.

Reciprocal Tariffs

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National Economic Council Director Kevin Hassett says that negotiations are underway with a variety of nations regarding tariffs.

Reciprocal tariffs are absolutely a high priority for the president, [they] have been forever. You know, our trading partners charge us way more in tariffs than we charge them. And it’s something he talked about before[.]
…
And there’s got to be a lot more action on it today[.]

A lot more action. Recall that, during his first term, President Donald Trump (R) offered the G-7 nations and EU a tariff-free trade zone. All of those nations and the EU blew him off.

It’s time to renew that offer: let tariffs reciprocally drop to zero and create a true free trade zone. See if those nations, and especially the EU are serious about doing honest business with us. American producers will have no trouble competing in that zone.

Two More Panic-Mongering Lawsuits

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Newly installed OMB Director and Acting CFPB Director Russell Vought has moved to curb the abuses of the CFPB by ordering staff to issue no more new rules, to stop new investigations, and to suspend existing investigations and litigations pending a general review of the CFPB’s activities. Vought also has authorized DOGE personnel to audit CFPB’s financial activities, including its payroll.

The National Treasury Employees Union is mightily upset, and it has filed two suits to stop these cease and desists and the audit. The NTEU alleged in the first case

It is substantially likely that these initial directives are a precursor to a purge of CFPB’s workforce, which is now prohibited from fulfilling the agency’s statutory mission[.]

In the second case, the union alleged that the CFPB

granted access, and by extension, disclosed employee records to individuals associated with DOGE without employee consent to such disclosure.

I will be brief, and the NTEU will not find it pleasant.

The union’s first case is entirely speculative as no harm has yet occurred, nor has the union alleged any harm actually has occurred. The suit should be tossed on that ground alone. Regarding the union’s allegation of prohibition, this is pure fantasy: the activities are HIAed, not prohibited, and whether the CFPB is functioning as statutorily required in this context is a political assessment, not one that is justiciable.

In the second case, the union’s allegations are, once again, purely speculative, and no harm has yet occurred, nor has the union alleged any actual harm has occurred. All it has done is raise a series of scary boogieman possibilities for some time in a nebulous future. This case ought to be tossed on that ground as well. Regarding the consent allegation, the CFPB’s employees—all Federal government employees—agreed to have their pay records audited on demand when they signed on to their government employment. That allegation also should be tossed even if the larger case is continued.

The evident frivolousness of these two suits is one more reason why government unions are destructively counterproductive and why the sinecure nature of civil service jobs needs to be severely curtailed.

Defanging the PRC

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At least by a little. As part of the People’s Republic of China’s economic war that it’s waging against us, they have moved to block important mergers involving American and non-PRC companies and today are threatening our major tech companies (and by extension our smaller tech companies and those companies that supply or otherwise do business with these).

Beijing has already said it is investigating Nvidia and Google over alleged antitrust issues. Other American companies in its sights include Apple, Silicon Valley tech company Broadcom, and semiconductor-design software vendor Synopsys, said people familiar with the matter. Synopsys has a $35 billion acquisition awaiting approval by Beijing.

And

[The PRC] said it had opened an antitrust probe against Google.

And

In 2018, amid US-China trade conflicts in the first Trump administration, Qualcomm terminated its proposed purchase of Dutch chip maker NXP Semiconductors after failing to obtain clearance from China.

And

US chip maker Broadcom’s takeover of VMware, valued at $61 billion when it was unveiled in May 2022, was in peril until a meeting between Biden and Chinese leader Xi Jinping in November 2023.

If these companies did no business with companies domiciled in the PRC and did no business within the PRC, that nation would be unable to go after them at all, including having no ability to block mergers between US and non-PRC companies. The PRC’s ability to damage our economy would be restricted commensurately. Of course, withdrawing from the PRC would be expensive in the short run, but it’s a large economic world, and while the PRC is a major player in it, that nation is not the only player. The magnitude of its role, too, would shrink as we reduce our economic ties with it.

Another, central, question is this: what’s the cost of letting an enemy nation have so much influence over our economy?

It Could be made to Work

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President Donald Trump (R) wants a sovereign wealth fund for “promot[ing] fiscal sustainability,” “establish[ing] economic security for future generations, and promot[ing] United States economic and strategic leadership internationally.” This is a slush fund with a gussied up label.

It could work, nonetheless, under a very narrow Critical Item-level set of circumstances.

• slush fund dollars can be loaned only, not committed as grants or investments
• slush fund purposes and scope clearly defined and limited
• scope and types of enterprises to which slush fund dollars may be loaned clearly defined and limited
• slush fund loans to be made at annually adjusting rates equal to the prime rate plus 12.75%, which is roughly comparable to today’s credit card interest rate markup
• slush fund loans to be repaid in full within two years
• principle to be returned to the slush fund; interest payments to be sent to Treasury for the explicit purpose of paying down the national debt
• bankruptcy can be used to discharge slush fund loans, but only via liquidation bankruptcy

Those are stiffly limiting criteria for a Federal government slush fund, but the WSJ editors are correct in every respect in their concerns about the dangers of such a fund. Setting up such a device under these criteria is likely a pipe dream chasing a chimera, but the idea is worth serious consideration: under these criteria, the idea could work; alternatively, the idea could be put to rest for a useful period of years.