Monthly Archives: May 2025

A New US International Trade Regime

Posted on by
Reply

As thought of by me.

The beauty of it, if I do write so myself, it that it’s wholly independent of tariffs, whether foreign policy or protectionist.

The idea, at a level of generality, is this. Congress, the President, and his Cabinet Secretaries develop a list of all goods and services critical to our national defense. The list must necessarily include dual use goods and services, those items that can serve both the private economy and our defense systems.

Then Congress and the President draw a hard line and require that 15% (to pull a number from the æther) of everything needed for production of those critical goods and services, from ore through intermediate components to the last components needed for final assembly or service provision, be produced entirely domestically. This would serve two purposes. One is that it would relieve our dependence on other nations, particularly enemy nations, for any of those goods or services, the denial of any one of which would stop our economy and our ability to defend ourselves beyond stocks already in place—a few weeks to a couple of months worth in an active shooting conflict.

The other purpose is that it would give us an extant production core from which we could surge production and expand production facilities much more quickly than if we had to attempt to start from scratch just to begin to surge.

The last step is to require a review of the list of goods and services every five years, de novo, adding to/removing from the list as necessary to keep it current. Every five years to relieve the review cycle, at least a little bit, from political cycles while keeping the update rapid enough to keep up with evolving technologies.

Of course, this will cost more than a classical Ricardian free trade, Smithian free market environment, but that’s the cost of national security. If we can’t protect a capacity for self defense, we’ll pay a far higher price.

Price Fixing

Posted on by
Reply

And this time it’s by the Republican caucus in the House. Among the moves they’re making in the reconciliation bill currently being debated in the various House committees is a badly needed move to reform the cost of college/university education and so improve the value of that education. The goal is to hold colleges accountable for student outcomes and curb the open-ended loan buffet.

The specific plan under consideration, though, is a terrible idea.

The House would reduce the aggregate limit for undergraduate loans to $50,000 from $57,500. The bill would also impose a $100,000 borrowing limit for master’s degree and doctoral programs and $150,000 for professional programs like law degrees. Graduate student loans are currently uncapped.

This is just price-fixing by another name, though, and worse than not addressing the underlying problem, it hides—like any price-fixing scheme does—the true costs and gains of the services being offered.

Better, and more efficient, would be to let free market forces solve the problem. I’ve offered this alternative before; it bears repeating, with a couple of additions.

• statutorily require colleges and universities to publish the average, median, and range of income at the five years employment mark for their graduates in each of the major fields offered
• [added] statutorily require colleges and universities to publish their graduates’ employment percentages at the five year post-graduation mark for each of the major fields’ graduates
• statutorily require student loans to be originated by private lenders or colleges and universities
• statutorily require colleges and universities to guarantee at least 50% of each loan granted their students [added:] by private lenders
• [added] bar any government or government-affiliated entity from guaranteeing any part of any student loan
• statutorily allow current and future student loans to be discharged in “ordinary” bankruptcy proceedings

With private lenders and colleges/universities having skin in this student loan game—and being the only players in the game—loans and their borrowers would be carefully screened for repayment risk. Just as importantly, prospective students and parents could better evaluate which majors to pursue and which schools best teach those majors. A happy side effect of that will be better use of us taxpayers’ money.

A Correct EO

Posted on by
Reply

In early March, President Donald Trump (R) wrote an Executive Order that rescinded the security clearances of the law firm Perkins Coie and its lawyers individually. The EO also barred Perkins Coie from access to a number of Federal buildings and instructed other Executive Branch agencies to exam contracts with Perkins Coie with a view to ending them.

Last week DC District Judge Beryl Howell ruled the EO unconstitutional. Among other things,

Howell wrote that the text of the executive order, and Trump’s statements about it, made clear that he targeted Perkins Coie because it represented clients he doesn’t like, and clients challenging some of his actions.
“That is unconstitutional retaliation and viewpoint discrimination, plain and simple,” wrote the judge, an appointee of former President Barack Obama.

She’s not far wrong in that, and this is a case where Trump’s rhetoric contaminated the legitimacy of his move. Perkins Coie made an argument in its suit, though, that is and should have been so considered wholly irrelevant.

It told the court it was at risk of losing its most lucrative clients, as they frequently work with the federal government, and many are major government contractors. In fact, the firm told the court, it did lose clients.

That confers no obligation on the government to grant or continue security clearances to Perkins Coie or any other enterprise. No business must be allowed to arrange its business model in such a way as to compel our government to grant it a security clearance.

The President of the United States is the final arbiter of security clearances, of what is classified, and of who has declassification authority.

From that, this: a better—and entirely constitutional—Executive Order would require all Departments and agencies in the Executive Branch, including the President and his White House, that have security clearance authorities to rescind all security clearances of personnel who leave their Departments or agencies on the day of their departure—even if those employees are transferring to another Department or agency. The new Department or agency, and any nongovernment entity who employs the departed person, if they want the person to have a security clearance, must do a de novo background investigation before granting a clearance, and the Department, agency, or outside entity must justify the level of clearance requested.

The EO should do this, as well: recast security clearances, extant or newly granted, held by nongovernment enterprises and their employees as for the duration of the particular contract with automatic rescission on the end of the contract. New contracts must have de novo background investigations of all enterprises and individual employees contemplated for work on the contract. If an existing contract is extended for a second time, those security clearances must be explicitly renewed via de novo background investigations.

Security clearances give access to our nation’s most important secrets, and no person and no entity has an intrinsic right to one. No person and no entity has any sort of Constitutional right to a security clearance. Neither does our government have any obligation to grant a security clearance, of any level, to any person or entity. This fundamental concept is one that is too often unconsidered in disputes over clearances.

There’s the Problem

Posted on by
Reply

In an article centered on President Donald Trump (R) centralizing foreign policy in his office, Richard Haass, former president of the Council on Foreign Relations and staffer at State, NSA, and Pentagon, had this to say:

This is the most top-down administration in recent memory. This isn’t a staff-driven administration.

And there it is, in so many words. In the particular case, the President of the United States is, by Constitutional design, our nation’s foreign policy chief. The foreign policy-influencing centers in the Executive Branch—State, NSA, et al.—all work for him. And so do those centers’ staffers, albeit through their Department and agency Secretaries and Directors.

More broadly, this is a career government staffer (before joining the left-leaning think tank) decrying the reduction in control exercised by the deep state/bureaucratic state/staffers. He’s an echo of Fiona Hill’s angry objection that earlier-President Trump wasn’t listening to and obeying her ad hoc committee regarding Ukraine.

Tariffs and Economic Growth

Posted on by
Reply

The good editors at The Wall Street Journal spent a lot of ink and pixels decrying President Donald Trump’s (R) tariff moves. They saved the money bit for the end, though maybe not in the way they intended.

The best response to the warning from the first-quarter GDP decline would be for Mr Trump to call the whole tariff thing off. Short of that, settle for 10% across the board and call it a day. If that’s too much of a come-down, Republicans will need to pass a pro-growth tax cut and accelerate their deregulatory push as their best chance to liberate the economy from its tariff kidnapping.

Those first two sentences are irrelevant, whatever one might think of Trump’s tariff moves. Republicans need to pass a pro-growth tax cut and accelerate their deregulatory push—and pass serious spending cuts—independently of any tariff moves.