Some Thoughts on our Trade Imbalance

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Phil Gramm and Donald Boudreaux had an extensive op-ed in last Thursday’s Wall Street Journal. I have a couple of thoughts on their piece.

Overall, they presented a typical argument regarding international trade balances, and it was sound as far as it goes. However, I’ve never seen an argument for or against US trade deficits/surpluses that take into account the dollar as the world’s reserve currency.

For international trade, how much, really, are local currencies traded for dollars in order to purchase American goods and how much are local dollars traded for foreign currencies in order for Americans to buy foreign goods? How much of those currency exchanges are really just taps of the foreign nation’s dollars held as reserves and similarly replenished into those reserves through ordinary trade-of-goods-and-services exchanges? In other words, how much to buyers and sellers themselves do the currency exchanges and how much of those currency exchanges are actually done from government to government out of government reserve holdings?

Maybe a lot is government to government, maybe a little, but the question needs answers.

Also this:

Has the expansion of global trade “hollowed out” US manufacturing, as Joe Biden claimed in 2022? No. US industrial production today is more than double what it was in 1975, the last time we ran a trade surplus.

What is produced by today’s “industrial production” compared to that of 1975? Or immediately after WWII? That never gets specified. Nor does “industrial production” ever get normalized to account for changes in technology and manufacturing techniques.

A similar definition disconnect exists for services.

Until those specifications are made, claims of industrial production or services changes in either direction are meaningless.

Why Not?

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The press’ “government officials” now say that President Donald Trump (R) is planning to eliminate the US Postal Service’s Board of Governors and fold the USPS into the Department of Commerce. On the other hand, a “White House official” says that’s not so.

For the hyperventilators in the audience, here is the sum and total of what our Constitution says about a postal service. It’s in Article I, Section 8:

[The Congress shall have Power…] To establish Post Offices and Post Roads

Nothing in there about establishing or maintaining a postal service, only the post offices, useful for dropping off and collecting mail and packages for transporting over those post roads—of latter which we have an enormous network of roads over which to carry that mail and those packages, along with extensive railroad and air shipping networks capable of the same. Those post offices are directly analogous, and no more useful than, FedEx and UPS drop-off and pickup offices.

A move to consolidate the USPS into Commerce has the potential of reducing duplicative governance. It also would give those with commerce expertise—to the extent such exists in the Federal government—control over what is, essentially, a commerce enterprise—the movement as shipper of First Class mail and packages as well as intermediary shipper of other shippers’ packages.

Of course, the better move would be to completely privatize the USPS and let it compete with existing shippers for the movement of all mail, including First Class, just as it does now with packages. USPS already has a serious advantage in such competition: a last mile network that reaches every household and business in the nation, which none of its potential competition (with the possible exception of Amazon, for its own exclusive use).

Still, consolidation would be a good start.

Speculative Lawsuits

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A collection of Leftist State Attorneys General led by New York’s Letitia James has filed an amicus brief in an existing suit against the Federal government over President Donald Trump’s (R) move to defund the Consumer Financial Protection Bureau. That might leave American banks without a government watchdog, they claim in their brief.

Furthermore, [t]he AGs didn’t accuse any banks of wrongdoing. These AGs further claim

The absence of a functioning CFPB…creates a regulatory vacuum even greater than what existed before the Great Recession. The very large financial institutions that compete with state-chartered banks will have carte blanche to loosen their regulatory compliance and profit accordingly.

Further, as cited by The Wall Street Journal,

The AGs argued that the administration is creating a regulatory gap that will encourage the largest banks to game the system by taking a more lax approach, while smaller state-chartered banks will still be subject to state supervision.

Might. Will have. And those two possibles in the latter: “will encourage” and “will still be.” These are purely speculative, with no harm being alleged. No actual wrong doing, in so many words, is being alleged. Basing a law suit, or even an amicus, on speculation about an unknown future—however likely plaintiffs might claim that future to be—is anathema in the American legal system. The requirement to allege—credibly—actual harm already done prevents a potful of frivolous, of politically motivated, of purely fee-seeking lawsuits where no harm exists, even where no harm is likely to exist in some nebulous future.

The Leftist AGs’ move is typical of the Left’s and their Progressive-Democratic Party politicians’ lawfare business.

This is yet another reason why it’s so difficult for us average Americans to have nice things in our nation. It’s time to start requiring plaintiffs to pay the defendants for the costs of lawsuits which plaintiffs bring and lose, and to require those providing amicus briefs on the side of plaintiffs to share in paying those costs.

Presidential Authority

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President Donald Trump (R) is moving to reassert a President’s authority over the Executive Branch of our Federal government, lately signing an Executive Order that imposes new White House supervision over so-called independent agencies.

The editors of the WSJ center their support for this on

Article II’s command that the President “take Care that the Laws be faithfully executed.” If Congress has charged such agencies with enforcing laws, then the President should be able to supervise how they do their job.

They’re right as far as they go, but the matter is far more basic than that. The first sentence of Section 1 of our Constitution’s Article II lays out the foundational nature of an American Presidency:

The executive Power shall be vested in a President of the United States of America.

Our Executive Branch is run by a single executive officer, not by a committee of board members, especially not by an executive and a number of other executives operating independently of him and of each other.

This is the unitary executive, as some legal scholars term it. It’s long past time it got restored. Trump is entirely correct in this matter.

Birthright Citizenship for Children of Illegally Imported Slaves

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Jason Riley, Upward Mobility columnist for The Wall Street Journal, in his op-ed last Wednesday has hung his hat on the universality of birthright citizenship on the citizenship granted the children of slaves who were illegally imported, and so as persons were present illegally. In support, he cited the 14th Amendment’s All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States clause and noted, correctly IMNSHO, the centrality of that subject to the jurisdiction thereof phrase to the hook for his hat.

Riley’s claim vis-à-vis those illegally imported slaves’ children is this:

Although the US banned the importation of slaves in 1808, an illegal international slave trade continued for decades. ….
According to the legal scholar Gerald Neuman, by the time the 14th Amendment was ratified, there were tens of thousands of black people in the US who had been brought here illegally. Naturally, some of them later bore children. It thus would seem that for authors of the Citizenship Clause, “subject to the jurisdiction thereof” included the children of parents in the country without authorization.

Therein lies the failure of Riley’s argument. The Trump administration’s argument—and one I’ve made in these pages—is that illegal aliens and birth tourism mothers are not subject to our nation’s jurisdiction because, in the first instance, they’ve placed themselves outside our jurisdiction from the beginning by entering our nation illegally—in direct and deliberate contravention of our jurisdiction’s laws—and in the second instance, withholding themselves from our jurisdiction however legally they may have entered because they have no intention of staying or in any way breaking the bonds of their loyalty, citizenship, or still-accepted jurisdiction of their home nation.

Those illegally imported slaves, on the other hand, on their emancipation actively and consciously accepted the jurisdiction of our nation and our nation’s laws. They accepted and sought American citizenship, whether before or after their children were born.