The Trump Administration's Latest Protectionist Trick: Call All Foreign Trade "Unfair"

Modern prosperity relies heavily on international trade. No one single country, even one as resource-rich as the United States, produces everything its citizens want or need. The premise of international trade is that people specialize in what they do well and exchange with others who specialize in something, else, and do so across international borders. It is through international trade that countries prosper. From food and clothing to smartphones and automobiles, international exchange allows producers to reach global markets while consumers gain access to goods that would otherwise be more costly or scarce. 

Yet last week, the Trump's Office of the United States Trade Representative (USTR) claimed that foreign exports are inherently unfair by saying "U.S. trading partners producing more goods than they can consume domestically...displaces existing U.S. domestic production." By redefining imports as evidence of unfairness, the argument treats the presence of foreign goods as a problem rather than a benefit. This view of economics and trade misunderstands the purpose of trade and risks harming the very Americans it seeks to protect. 

Imports Are Benefits, Not Punishment

A common mistake in the Trump administration's line of thinking is that is treats nations as if they were corporations competing for market share. Under this "logic", every import is portrayed as a concession to foreign producers while exports are celebrated as national triumphs. This narrative might be effective for political optics, but bears little resemblance to how markets actually function. 

This misunderstanding largely stems from the mistaken belief that the economy is a fixed pie in which one country's gain must come at another's expense. In reality, trade expands the pie by allowing individuals and businesses to specialize in what they do best and exchange with others who do the same. Trade allows both sides to become better off because each is exchanging something they value less for something they value more. By expanding opportunities for specialization and exchange, international trade increases overall prosperity rather than simply redistributing a fixed economic pie. 

The Protectionist Redefinition

Calling foreign exports inherently unfair is not an economic argument so much as it is a bastardization of the word "fair." In traditional trade policy debates, unfair trade practices refer to specific policies that distort competition, such as subsidies and state-owned enterprises. As imperfect as it arguably is, it is why a World Trade Organization exists. The Trump administration throws out that entire framework out the window. What is going on is that the administration is asserting that the act of selling goods to Americans is suspect if the seller happens to be located outside of the United States.

It is absurd because this approach eliminates the need for evidence or analysis. The argument uses circular logic in which foreign exports are declared unfair simply for being foreign exports. Such "reasoning" turns market competition into exploitation, success into cheating, and consumer choice into economic wrongdoing. Any successful foreign business can be labeled as "unfair", thereby making the fairness argument meaningless. It is an approach that replaces serious economic analysis with farcical economic nationalism. 

What is more is that this logic mirrors the rhetoric behind "Buy American" or "buy local". If purchasing foreign goods is harmful, then presumably Americans should only buy domestically produced goods. But why stop there? With that same logic, it should be wrong to buy goods and services from another state rather than one's own community or neighborhood. Taken seriously, this reductio ad absurdum "logic" collapses when applied consistently. Economic progress has always depended on the widening the scope of trading partners. Restricting trade based on geography does not create wealth. It merely limits the ways in which prosperity can flourish.

Making America Pay Again

This protectionist mindset is framed as a way to shield American workers and industries from "big, bad foreign competitors." In reality, protectionist measures like tariffs impose broad costs onto the U.S. economy. Tariffs reduce competition and restrict supply, which results in higher consumer prices, fewer jobs, and lower economic growth. What is framed politically as sticking it to foreign countries ends up being a tax on the everyday American. 

Those higher costs ripple throughout the broader economy. Consumers pay more for finished goods, while American businesses pay more for imported components and raw materials that they rely on to produce their own products. In many industries, these inputs are essential to maintaining competitiveness. By raising their costs, protectionist policies ultimately make American firms less productive and less able to compete both at home and abroad. 

Those Who Trade Together Stay Together

Trade does not merely affect prices; it shapes the broader strength of the nation. Declaring foreign exports unfair and erecting trade barriers risks weakening the very economic foundations that sustain U.S. competitiveness and strategic influence. Driving up costs for American firms leaves them less capable to compete in the global economy. A strong economy is a prerequisite for a strong national infrastructure and robust national security, and protectionism undermines both. 

These costs extend beyond domestic production. They also damage alliances and global relations. Tariffs and other protectionist policies often push allies into the arms of rivals, thereby diminishing national security. At the same time, these measures slow domestic production and reduce the efficiency of U.S. firms, which undermines the critical base for U.S. infrastructure and security. In other words, this approach risks making the country less secure, less innovative, and less influential on the global stage. 

Old Trade Fallacies Make a Comeback

Declaring foreign exports "unfair" substitutes political rhetoric for analysis. By assuming that imports are evidence of wrongdoing, the argument ignores the principles that make international trade beneficial: specialization, voluntary exchange, and consumer choice. This is just the latest manifestation of the same idiotic reasoning behind "Buy American' or "buy local" campaigns: restricting trade based on geography or origin does not create prosperity; it limits it. The zero-sum logic of protectionism is fundamentally at odds with how markets work. 

The consequences of these policies extend much beyond economic theory. These protectionist measures raise costs for consumers, increase inefficiencies for businesses, and undermine the strategic and economic advantages of maintaining robust global trade relationships. Far from protecting Americans or making America great again, these measures punish them, reduce prosperity, and weaken the U.S.' ability to adapt in a competitive world. If the U.S. government treats all foreign goods as guilty by default, the ones who will lose bigly will be the American people. 

COVID Lockdowns & School Closures and How the Children Did Not Developmentally Bounce Back

Sometimes it feels like the COVID-19 pandemic was yesterday, but the truth is that yesterday was the six-year anniversary that the World Health Organization declared COVID-19 a pandemic. We were told shortly after that the effects of the lockdowns would be short-lived and we could weather it because nothing was worse than COVID-19. We all know how that safetyism turned out!

In the years following the pandemic, researchers have been trying to discern what the tradeoffs of the lockdowns were. The body of research continues to grow and show how the lockdowns were far from being harmless, especially for children. 

Last December, I wrote about research that indicates that lockdowns may have contributed to language and social-cognitive delays in young children. A new study from the University of East Anglia (Johns et al., 2026) shows how the lockdown's effect on children is much worse than previously thought.

The new study did not simply compare outcomes before and after the pandemic. This study tracked the same children over time, allowing researchers to measure how quickly their cognitive skills developed and how entering school during the lockdowns affected that growth. Not only does the study show that the lockdowns caused lower growth in executive-function skills and that the impacts were more greatly felt by children in low-income households. That gap persists years after the lockdown and those students still struggle to catch up.

This study cannot tell us whether the delays from the COVID lockdowns are permanent because only time can tell. Even so, this study shows something fundamental. Lockdowns slowed the rate at which key cognitive skills developed during one of the most formative periods of childhood. 

Executive function, which includes such skills as self-control, attention regulation, and flexible thinking, normally grows rapidly when children first enter school and begin interacting regularly with peers. When those experiences are interrupted, development slowed. Even if some of that is made up, it is not as simple as doubling down efforts to make up for lost time. It simply does not work that way. And this is not a trivial development because it is executive function that plays a major role in academic and social success down the road. 

That is what makes this whole debate even more striking. Much like I brought up last December, lockdowns that disrupted children's lives so profoundly and had such adverse effects were often justified by people who spoke passionately about income inequality in the pre-COVID era. Yet policies that shut down schools and isolate children from an environment where they normally develop those skills was asking for trouble. 

Studies like this show that the costs of lockdowns were not temporary or merely inconvenient. The lockdowns are such a calamity where they still have caused considerable harm years later. Draconian COVID measures were not simply a matter of children missing a few classes. These children have been deprived of an important part of growing up and what it means to be a kid. 

The Billionaire Blunder: Why Bernie Sanders' Wealth Tax Wouldn't Deliver

Every few years, the idea of a wealth tax resurfaces in American politics. The concept is simple enough. Instead of taxing income, the government would impose an annual tax on accumulated wealth, whether that is stocks, bonds, real estate, or other assets. Last week, Senators Bernie Sanders (I-VT) and Ro Khanna (D-CA) introduced legislation for a 5 percent wealth tax on the billionaires. Sanders claims that this tax could generate $4.4 trillion in tax revenue over the next decade, revenue that Sanders would like to use to pay for Medicaid expansion, affordable housing, and a $3,000 in direct payments to households.

The theme of a wealth tax is hardly a new topic here at Libertarian Jew. I first covered it in 2014 when economist Thomas Pikkety proposed a global wealth tax. I did so again in 2019 when Senator Elizabeth Warren (D-MA) proposed a wealth tax. While the details of the proposal can change from one to the next, the evidence consistently shows the problematic nature of the wealth tax. I will use my 2019 argument as the basis for my current argument and update the data as needed. 

Other countries have abandoned the wealth tax. In the 1990s, the number of OECD countries with a wealth tax peaked at 12 countries. Now, the figure is at four countries: Norway, Spain, Switzerland, and Colombia. Much of the remainder of this piece will get into the "why" of this decline.  

The wealth tax is difficult to valuate. As the OECD points out (p. 69), a difficulty with the wealth tax is figuring out assets are worth. Unlike income, which is recorded through transactions, wealth often consists of assets that lack clear market prices, such as family businesses, land, or valuable collections. Determining their value requires subjective appraisals that can be expensive, inconsistent, and easily contested. 

High elasticity. Another question is how sensitive wealthy people are to wealth taxes. This responsiveness to a tax increase or decrease, known in economics as elasticity, gets at how much an individual can tolerate a tax change. In the Spanish case study, tax filers' taxable wealth decreased by 42-51 percent. Similarly in Colombia, a 1 percent decrease in the wealth tax led to an immediate 2 percent increase in wealth for those near the threshold. In Scandinavian countries, a one-percentage point increase in the wealth tax led to a decrease of stocks by wealthy taxpayers by 2 percent. 

It is no mystery: people do not want to pay the wealth tax. People can use the legal system with tax avoidance, whether through moving taxes in tax-exempt accounts, underreporting wealth, inflating liabilities, or claiming deductions strategically. These are the types of responses with lower tax rates. Imagine what it would be like with a 5 percent wealth tax rate!

It is also worth noting that Sanders' rhetoric about "millionaires and billionaires" softened in recent years. He conveniently dropped the "millionaires" around the time he himself became a millionaire. I guess it is easy to champion taxing the rich as long as you get to redraw the definition of "rich" to leave yourself out. 

Rosy estimates and evasion rates. Economists Emmanuel Saez and Gabriel Zucman estimated that Sanders' wealth tax would generate $4.4 trillion in the next decade. They were the same economists that calculated the estimate for Elizabeth Warren in 2019. Warren's tax was at 2 percent for wealth between $50 million and $1 billion, and 3 percent for anything above. For Warren's version, the economists assumed a 15 percent tax evasion rate. What I find peculiar is that these economists assume a lower evasion rate with Sanders' version, even though it is a higher tax rate. 

Forget that one of the co-authors, Zucman, co-authored a paper showing that those in the 0.01 percent have a tax evasion rate upwards of 30 percent. Other tax experts are not buying it. As the Tax Foundation points out, if you assume an evasion rate closer to that paper that Zucman co-authored, Sanders' estimate would decline to $3.3 trillion over 10 years. Senior Fellow Kyle Pomerleau at the American Enterprise Institute is even less optimistic. Once factoring in behavioral responses, Pomerleau estimated that it would be $2.3 trillion over the next decade. 

Wealth tax does not generate that much revenue. The issue of unbridled optimism is not confined to these two economists that Sanders hired. Historical experience shows how little revenue wealth taxes truly generate. With Sanders' estimates, his annual average of $440 billion would be the equivalent of 1.4 percent of GDP, given that the most recent GDP figures had it at $31.10 trillion. 

Looking at historical data, it has been quite low. That was a conclusion of that lovely OECD report on wealth taxes (p. 18). The Tax Foundation was kind enough to gather the historical wealth tax data on the few countries that still have a wealth tax to show that with very few exceptions, the wealth tax revenue does not exceed 1 percent of GDP (see below). 

  

Conclusion. All of this adds up to a simple conclusion: wealth taxes are inherently tricky, easy to evade, and historically generate far less revenue than proponents claim. Sanders' proposal may sound ambitious, but experience teaches us that wealth taxes provoke capital flight, creative accounting, and behavioral shifts that shrink the tax base. Let's be real: taxing billionaires at 5 percent is less a sincere fiscal plan and more a social media stunt dressed up as economics.

X Marks the Spot? Why Driver’s Licenses Shouldn’t Be Gender Identity Statements

Last week in Kansas, Senate Bill 244 went into effect. One notable aspect is that this bill mandates that people enter bathrooms in government buildings according to their biological sex. What is interesting is that an individual violating this law can face a civil penalty of $1,000. But that is not the provision I want to cover today. This bill also requires that driver's licenses list biological sex instead of gender identity. 

For transgender individuals, this is not an abstract policy change. It alters a document that they use for multiple activities, which includes driving a vehicle, renting a car, interacting with police, applying for a loan, boarding an airplane, picking up a package, registering at a hospital, checking into a hotel, and signing a lease. Critics of this bill argue that it imposes stigma, creates daily friction, and opens transgender people to harassment and discrimination. 

One criticism of this bill that I will agree with is that there was next to no grace period given for transgender people to acquire a new driver's license. It is true that a retroactive invalidation with no grace period is harmful and an example of poorly drafted legislation. Bureaucracies should do their utmost to not create avoidable chaos, although that might be too big of an ask. 

Yet beneath the procedural misstep is a more fundamental issue, mainly that a driver's license is a form of legal identification, not a canvas for personal self-identification.  As I explained last year, gender identity lacks clear operational boundaries and is not something that the government can consistently or meaningfully verify due to its incoherent and subjective nature. Because gender identity cannot be defined or verified with consistency, it is an unsuitable basis for a legal document and has no practical utility. 

By contrast, biological sex is a stable and verifiable category that reduces ambiguity and keeps administrative processes consistent and secure. While not as crucial as a photo, name, or date of birth, a biological sex indicator on a driver's license still serves functions that gender identity cannot engender (pun intended). 

• Interactions with law enforcement: Driver's licenses are used to confirm identity during traffic stops, match individuals to warrants, and identify suspects from descriptions. Physical descriptions often include biological sex, which correlates with bone structure, facial structure, height and weight distribution patterns, and voice patterns. While an officer may rely most heavily on the photo, name, and date of birth, biological sex remains a verifiable descriptive element that gender identity does not consistently provide. 

• Medical and emergency contexts: Driver's licenses are not designed as medical records, yet biological sex can occasionally aid identification in emergencies and provide context for drug metabolism differences, sex-specific conditions (e.g., ovarian cancer, testicular emergencies), baseline cardiovascular differences, and possible pregnancy. Biological sex has clinical relevance, whereas gender identity does not serve this function.

• Data integrity. Since it acts as an official source for administrative statistics, driver's license data has a downstream effect of feeding into accident statistics, crime reporting, public health research, and transportation safety analysis. Biological sex is empirically measurable and allows accurate sex-based comparisons. Gender identity does not provide such consistency for data analysis.

A driver's license is an administrative document for legal identification. Because the driver's license serves as a foundational identification document in modern civic life, the categories of information it contains should be objective, stable, verifiable, and resistant to self-attestation alone. Since gender identity is a subjective understanding of the self, it has no consistent administrative application. 

In addition to being an objective category, the characteristic should be necessary for identification or administrative purposes. Otherwise, why not add political affiliation, sexual orientation, religion, or Myers-Briggs type on a driver's license? Because legal identification is not meant to capture the fullness of who we are as individuals. 

It serves the narrower purpose of anchoring a person to a stable, administrable record within a broader legal system. The more the state drifts from objective categories toward interior self-conception, the less it identifies and the more it validates someone's self-perception. A driver's license is for identifying people, not a self-affirmation tool. 

When identification becomes affirmation, it stops identifying anything at all. Validating someone's perception of self is not something the government should be in the business of doing because a category that means whatever anyone says it means, especially when it is not grounded in reality, ultimately means nothing. 

Drowning Out Evil: What the Purim Practice of Noisemaking Teaches About Moral Clarity

The news cycle as of late has been filled with reports of Operation Epic Fury, which is the joint U.S.-Israeli campaign targeting the remnants of Iran's military and nuclear infrastructure, as well as various members of Iranian leadership. Regardless of one's political perspective and whether this attack should have been launched, the operation is unmistakably loud. Not only is it loud in the literal sense with explosions and air power, but also in the figurative sense in terms of the Trump administration's foreign policy and how it views its adversaries. 

The idea that evil should not be ignored and should be actively opposed is not a new concept in Jewish history. In synagogues around the world, Jews will gather tonight in a ritualized form of confronting evil: the reading of the Book of Esther, also know as the Megillah. The biblical narrative describes how a Jewish woman, Esther, rises to the queenship of the Persian Empire and thwarts a genocidal plot against the Jewish people. The antagonist of the story is Haman, a royal official who persuades King Ahasuerus to authorize the extermination of the Jews. Through a dramatic reversal, Haman's plan was thwarted and the Jewish people were saved. 

This is where the noise enters the scene. Every time the name of Haman is mentioned in the Megillah reading, synagogues erupt in boos, stomps, hisses, and the rattling clamor of groggers. Although the first documented instance of this practice is in the 13th century, it is derived from the Torah. In the book of Deuteronomy (25:17-19), the Jews are commanded to blot out the memory of Amalek. Haman was the son of Hammedathah the Agagite (Esther 3:1). Agag was the king of the Amalekites (I Samuel 15:8-9), which is why Jewish tradition (Talmud, Megillah 13a).

In an age where moral categories are inverted, Purim is especially relevant. Hamas carried out despicable acts of kidnapping, rape, torture, and murder against Israeli civilians on October 7, 2023. If an attack that was equivalent to multiple 9/11 attacks happened to any other country, the international community would have sympathized with the attacked. Instead, much of the world sympathized with an anti-Semitic, homophobic, authoritarian terrorist organization. Entire populations now reframe those who call for the extinction of the Jewish state as "oppressed" and "freedom fighters.”

Then there is the new low society has reached in that more and more are of the opinion that disagreeable ideas are the same as actual violence. We see this not simply in rhetorical terms, but in real-world consequences It was that warped logic that got Charlie Kirk murdered and can continue to justify violence as a response to political disagreement.

These are but two examples to contrast the Megillah. Haman is not perceived as "oppressed," "misunderstood," or "dealing with systemic inequity." Haman sought genocide: full stop. There was no "this situation is complicated" or "the relation between Jews and Persians were complex and nuanced at the time." The Purim story insists otherwise. Power can corrupt, tyranny is real, and genocide is evil. The Megillah illustrates the moral categories unambiguously. 

At the same time, the Megillah models a form of pluralism that does not compromise moral clarity. The Jews lived among foreigners under foreign rule and navigated a world of different beliefs and customs. That diversity does not mean that we ignore when clear wrongdoing is taking place. Just like Jews in the Megillah existed in a different world were also able to recognize Haman's evil. We too must insist on certain basic truths in a pluralistic world. Acts like genocide, torture, and kidnapping are unacceptable. Purim teaches that we can live amidst difference without equivocating about what is categorically wrong or drifting into the idea that evil is "just another perspective." 

The uproar at Haman's name is not just about a tradition. It is about not having evil become normalized. It is about making sure we can distinguish between right and wrong, even in a pluralistic, democratic society. Sometimes it takes a loud, jarring noise to make sure we do not succumb to moral atrophy and indifference. 

How Institutional Investors Are Good for the Housing Market

Earlier this week, President Trump gave his first State of the Union address during his second term. I found plenty to disagree with, including immigration, how tariffs are necessary for economic growth, imposing price controls on prescription drugs, and how he wants to protect Social Security, Medicare, and Medicaid. There was one aspect that stood out: his take on housing costs. President Trump said that the problem with housing is not zoning, his tariffs, or construction costs: it's BlackRock. Trump touted his executive order to ban investment firms from buying up single-family homes. He also asked Congress to make the ban permanent. For reference, institutional investors are large financial organizations that pool money from many investors and buy assets at scale, such as large numbers of homes to operate as rental properties. 

It is not intriguing simply because it has historically been the Democrats arguing against corporations. It is ironic because Trump rose to prominence as a real estate developer by amassing large amounts of capital to buy and develop property. It seems poetic that he is now arguing that assembling capital to buy property is a threat to the American Dream. When examining further, it does not make sense how institutional investors are a threat. 

Institutional investors account for about one percent of single-family rentals (see below) and less than one percent of overall housing stock. Even if Trump were successful in banning all institutional investors from buying up housing stock, it would barely make a dent in housing supply. These firms operate on a scale that is tiny compared to the millions of homes bought and sold each year by individual buyers and families. Moreover, their purchases often target specific markets (e.g., the Sun Belt) or distressed properties. This means that typical first-time homebuyers are largely unaffected by institutional investor activity.  

Not only do institutional investors have a small market size, but they also improve the housing supply. A professor from City University of New York calculated that institutional investors expanded housing supply by 0.5 units for each unit purchased. In part, institutional investors purchase homes and convert them into rentals. Also, institutional buyers measurably have improved local housing markets by reducing vacancy rates and helping to stabilize neighborhoods (Federal Reserve Bank of Philadelphia). This is because investors buy vacant or distressed homes at a faster rate. Because they buy vacant homes quickly, neighborhoods avoid decay. 

This ripple effect even extends to local employment and home values. This investor activity is associated with statistically significant reductions in local unemployment and increases in employment, especially in construction-related industries (Federal Reserve Bank of Philadelphia). Another paper from the Federal Reserve Bank of Philadelphia that was released in 2023 shows permanent consumer welfare gains for homeowners. Homes within a quarter-mile of an institutionally purchased home sold at a value 1.4 percent higher than those that were not. That is not a rounding error, but real money is people's wallets. Who knew that Wall Street could be the good guy?

If Trump really wants homes for more people, banning institutional investors is a funny way of going about it. Institutional investors barely make a dent in the market. What's more, institutional investors actually help the housing market, whether through expanding supply, stabilizing neighborhoods, reducing vacancies, or boosting nearby home values. The real problem is not Wall Street. It is that local housing regulations make it harder to build a home than winning on The Apprentice. It turns out that banning institutional investors will not build a single house. On the other hand, cities with onerous land-use regulations, zoning laws, and permitting barriers do a fine job of stifling housing development. All the handwringing on the federal level cannot fix the housing shortage when the real bottlenecks are at City Hall. 

Supreme Court Strikes Down Trump's Tariffs: Why SCOTUS Didn't Add $2.4T to the Debt

Last Friday, the U.S. Supreme Court (SCOTUS) announced a much-awaited decision. In a 6-3 ruling, SCOTUS declared that Trump's tariffs under the International Emergency Economic Power Act (IEEPA) are unconstitutional. I took this as a win not only for the separation of powers, but also for the economic wellbeing of the American people. Economic estimates calculated that these tariffs would have cost consumers billions of dollars, reduced GDP growth, and harmed net employment while doing little in the way of measurable benefits. In a previous piece, I also point out that it is not only economic modeling. History has shown these adverse economic effects to materialize as a result of tariffs. As I wrote earlier this month, these tariffs are even affecting U.S. national security. So yes, I am quite happy and relieved to see this SCOTUS ruling. 

Counting Revenue That Does Not Exist

Yet I noticed a couple of estimates that came out in response to the ruling, and they were both budgetary in nature. The first estimate is from the Wharton School of Business, which a leading business school in the U.S. Wharton estimates that unless replaced by another revenue source, future tariff revenues will fall by half. The second estimate is from the bipartisan Committee for a Responsible Federal Budget (CRFB). CRFB writes that "SCOTUS tariff ruling could add $2.4 trillion to the debt [over the next decade]." According to the CRFB, this ruling could raise the debt-to-GDP ratio from the baseline 120 percent to 125 percent. One of the reasons that this SCOTUS ruling matters is because the Trump administration presented the tariffs not only in terms of trade policy, but also as a source of government revenue. 

The Mirage of "Lost Revenue"

Since the administration touted the tariffs as a revenue source, the framing of "the SCOTUS ruling adds debt" is especially misleading. Tariff revenue under the likes of Section 232 or IEEPA are temporary, process-dependent, and potentially disruptive on an international level. Assuming that the tariffs would last indefinitely or that there would not be economic blowback is unrealistic. The SCOTUS ruling does not add to the debt. Pretending that future tariff revenue increases debt ignores the reality that the money has not arrived in the government's coffers. An absence of a tax increase is not the same thing as an increase in the debt. 

Tariffs only shift resources from consumers and businesses to the government temporarily. They do not magically create wealth out of thin air. Calling tariffs "revenue" distracts from the fact that tariffs are a tax. The government does not have first dibs on the gains from private economic activity. Baseline budgeting treats the tax revenue as a permanent fixture once enacted. As I argued last September, the economic and fiscal realities of tariffs made tariffs an unreliable revenue source, especially given the negative economic effects and the risk of retaliation. That disconnect between baseline budgeting and economic reality is why the claim that "SCOTUS ruling causes debt" rings hollow.

The Real Culprit: Congress' Credit Card

The baseline assumption is that Congress does nothing else, that the currently enacted laws are on auto-pilot. This brings us to what really causes debt. U.S. federal debt does not exist because SCOTUS declared Trump's IEEPA tariffs unconstitutional. It is because the government has consistently spent more money than it makes. That is an outcome of basic accounting. As the most recent Congressional Budget Office (CBO) Budget and Economic Outlook shows, the government is projected to create an average annual deficit of 6.1 percent from 2027 to 2036. Keep in mind that this is higher than the 1976-2025 average of 3.8 percent. The fact that the CBO projected before the tariff ruling that the debt-to-GDP ratio would be at 120 percent, a ratio that is higher than it was after WWII military spending, should make us pause and ask what the real issue is.

The Deficit Solution Congress Refuses to Touch

As I detailed in 2024, tax cuts from the Tax Cuts and Jobs Act did not cause the economy to implode. Similarly, the absence of tariffs did not cause the debt "to explode" because of the SCOTUS ruling. It simply exposes how the U.S. economy is becoming increasingly fragile due to Congress' inability to get its spending under control. Tariffs, tax cuts, or emergency powers will not fix that insatiable, profligate spending. If you actually care about government spending (and if you are a U.S. citizen, you certainly should because of how it will directly affect you) and want a smaller deficit, don't go begging for more government revenue. Tell Congress to stop buying things it cannot afford.

Colbert, the FCC, and the Case for Sunsetting the Obsolete Equal Time Rule

Late night television has reached the news cycle once more. Comedian and television host Stephen Colbert was going to broadcast an interview with Texas Democratic Senate candidate James Talarico. However, the interview did not take place. Colbert claims that CBS barred him from conducting the interview to the point where he could not even mention not having Talarico on the show, although the interview was later streamed on YouTube. CBS claimed that it had to do with the equal time rule. 

You are probably wondering what the equal time rule is. This rule comes from the Communications Act of 1934. This particular rule of the Act, which is in §315(a) of the Act, governs political candidates. The rule requires broadcast stations to provide equal opportunities to all legally qualified candidates for public office if they allow any candidate to use their platform. This rule applies to broadcast stations, which include radio and broadcast television. This means that the rule is generally not applicable to cable, satellite, or internet platforms. 

The argument back then was that there were a limited number of radio stations that could broadcast. Those advocating for the rule went under the assumption that broadcast stations had near-control over political speech at the time. The thing is that radio was a nascent form of media communication for the masses. Newspapers, pamphlets, and community meetings were the primary forms of political communication back in the 1930s. 

The scarcity argument did not make sense, and it makes even less sense now. As I brought up last year in my argument about why PBS and NPR should not receive public funding, there is a much more diverse media landscape than there was last century with cable television, satellite TV, internet platforms, podcasts, and social platforms. This rule is downright irrelevant because the free market provides platforms for political candidates better than a subset of broadcasters can. As such, the equal time rule is an incoherent regulation that distorts a market with an abundance of options. 

Not only that, but regulatory relics like the equal time rule risk creating arbitrary burdens and risks political abuse. Last year, late-night television host Jimmy Kimmel made controversial remarks about the assassination of Charlie Kirk. The Federal Communications Commission (FCC) Chairman Brendan Carr threatened ABC, a move that Carr does not regret to this day. Last month, the FCC released guidance saying that talk shows and late-night shows should not be exempt from the equal time rule. 

As I brought up last year in my criticism of the FCC's handling of the Kimmel situation, presidents dating back to Franklin D. Roosevelt have abused federal power to coerce broadcasters, so it is not as if Chairman Carr's coercion is historically unique. At the same time, the equal time rule is what happens when the federal government is given this much leeway to regulate the airwaves. Not only is it ripe for suppressing freedom of speech, but it is a rule built for a media landscape that no longer exists. Scarcity may have been the impetus for the rule, but a rationale from nearly a century ago for a market dynamic that no longer exists does not justify using it a guise for silencing or quashing political speech. Removing this unnecessary and irrelevant rule is long overdue.

Panic Over Data: What a New Study Reveals About the Main Rationale of COVID Lockdowns

In some respects, it feels like the COVID pandemic was a lifetime ago. However, it was only about six years ago that the World Health Organization (WHO) named the disease COVID-19. Aside from countries such as Sweden, humanity collectively freaked out and governments across the world implemented lockdowns in response to COVID-19. The rationale for the lockdowns was not simply that cases were rising, but that if something were not done to flatten the curve, the healthcare systems would be overwhelmed. 

It turns out that needing to implement lockdowns was even more unnecessary than previously thought. A recent study from the Journal of the Royal Statistical Society examined COVID policy, including the lockdowns (Wood et al., 2026). One of their main findings was that most countries reached peak COVID infection before the lockdowns were implemented. This led the authors to say that "the results imply that the full lockdowns were largely unnecessary."

"Largely unnecessary." If only someone warned us beforehand. And no, I am not only talking about when I wrote shortly before the lockdowns in the U.S. that we did not need lockdowns. It turns out that shortly before the pandemic, both the WHO and Johns Hopkins released pandemic guidance stating that there was no rationale for the lockdowns. The authors of this paper try to couch it by saying that the lockdowns might have kept those infection rates down. I have to disagree with that notion. Simply because the lockdowns coincided with the decline does not mean they caused it, as the paper already shows. Many people were already altering their behavior before the lockdowns went into effect. Imagine that: people can adapt to risk during a pandemic without being coerced into a lockdown. It is not as if there has never been a pandemic. These findings from the Journal of the Royal Statistical Society show that the lockdowns were not necessary because the curve for most countries was already bending before the lockdowns began. 

The major implication of this study is that the lockdowns were empirically unnecessary to reverse COVID waves. In other words, the major justification for the lockdowns was weak. The problem, though, is that the costs of the lockdown were neither weak, hidden, nor unpredictable. In April 2020 and May 2020, I covered many costs, whether that was economic devastation, neglected non-COVID healthcare, and social unrest. Sadly, I was right about the havoc that the lockdowns caused.

Rather than save lives, the lockdowns actually increased excess deaths. Lockdowns decreased the U.S. GDP by 5.4 percent and consumer spending by 7.5 percent, which came with an economic cost of $9.3 trillion to the U.S. economy. Then there is the widening global inequality; stunting the educational advancement of an entire generation of children; declining social-emotional skills; ruder people, greater fear, and more authoritarianism; higher obesity, greater substance abuse, and a backlog of healthcare issues; and increased political polarization, conspiracy thinking, mental illness, and violence. 

There is no shortage of the damage that the lockdowns caused. Lockdowns were necessary for and costly for everything. What makes this lamentable is that it was predictable and unnecessary. Yet no one is being held accountable for this carnage, maybe because so many were complicit or because it is easier to avoid inconvenient truths than it is to ignore deleterious policy. So why do I bring this up six years later? Because there will be another pandemic and important decisions will need to be made for pandemic strategy. It is my hope that perhaps next time decision-makers can actually use evidence and basic risk assessment instead of fear, panic, and lockdowns that ruin millions of lives. Because let's be real: a policy that was unnecessary, harmful, and predictable should never have been applauded as "following the science."

2/12/2026 Hodgepodge: Interest on Debt, Who Pays for Trump's Tariffs, and National Guard Costs

This has been quite a busy week for me personally. I wanted to make sure that I got in two entries in this week, so I want to give a grab bag of some of the ongoings within the wonderful world of public policy. I hope to return to providing more in-depth analyses next week. 

Interest on U.S. Debt. Earlier this week, the Congressional Budget Office (CBO) released its Budget and Economic Outlook for the next ten years. This report has some eye-popping findings, such as the debt-to-GDP ratio is expected to hit over 120 percent in the next decade. For context, all that wartime spending for World War II only got the debt-to-GDP ratio to 106 percent. This is not the sort of record that the U.S. should want to break. Because of that profligate spending, the U.S. is paying off more interest on debt than ever. According to this report (p. 82), the U.S. government is projected to spend a whopping $16.2 trillion (yes, that is trillion with a "t") on interest between 2027 and and 2036.

Who pays for Trump's tariffs? Trump and Vance were under the belief that other countries were going to pay for Trump's tariffs, that Trump's tariffs are without cost or consequence. It turns out that is false. When I reported on this topic about three weeks ago, I covered a report by the Kiel Institute that says that the U.S. as the importing country pays 96 percent of the costs of the tariffs. What was not clear from this Kiel Institute report is whether the businesses paid or if it was the consumers. 

This is where the Budget and Economic Outlook comes into play. According to the CBO (p. 30), 95 percent of the tariffs were paid by raising consumer prices on U.S. consumers. This means that businesses have by and large passed on the costs to the everyday American. This lines up with a recent Tax Foundation estimate that Trump's tariffs are a tax of $1,000 in 2025 and $1,300 in 2026 for the average household. 

National Guard. In response to the rampant crime in Washington, DC, President Trump deployed troops to reduce crime in DC. Irrespective of the debate about whether this is effective, we now know how much this cost. The CBO recently released a report on how much all Trump's deployment of the National Guard to all cities cost, which was $496 million from August to December 2025. For DC alone, that was an amount of $223 million. Regardless of what you have to say about the crime rates, there has to be a more cost-friendly route to bring crime down without having to resort to using the National Guard. Perhaps another conversation for another time. 

Plastic Surgeons Draw a Line in the Sand on Youth Gender Surgery...with a Scalpel

Over the past several years, the growing number of medical interventions aimed at treating pediatric gender dysphoria has made its way towards the center of public policy debates. The theme of children's welfare has come up in debates on banning video games, subsidizing school lunches, universal preschool, same-sex adoption, and Drag Queen Story Hour. This is hardly the first time that "Think of the children" has been used as a rallying cry to advance a cause. The Supreme Court's decision in Skremetti v. United States last year was a reminder that we do not have to take the word of activists at face value. Last week, the American Society of Plastic Surgeons (ASPS) released a statement saying that youth gender surgery is not evidence-based. This statement exposes another crack in the framework that assumes that youth gender surgery is a safe practice and settled science. 

Why This Statement Is Surprising

At face value, you would not think that ASPS would sign such a statement. If anything, you would assume that ASPS would be in favor of more youth gender surgery because they have a financial interest in performing more elective procedures. They would be the last medical association that you would expect to be against it, and here we are. And maybe that is the significance of this statement. 

Plastic surgeons are sensitive to malpractice exposure. About 1,000 of these youth gender procedures are done annually, which is small considering the revenue they make from breast augmentation, face lifts, or liposuction. The procedure revenue from youth gender surgery is dwarfed by the liability risk. Plastic surgery is already in a delicate place with regard to reputation. Plastic surgery is seen as elective, cosmetic, or sometimes exploitative. Performing irreversible procedures on minors that lack an evidence base is a recipe for legal disaster and would only create reputational risk. 

The Evidence and the Risk

This statement brings another concern to light: the plastic surgeons are the ones who are charged to treat patients who might deal with long-term side effects. In its statement, ASPS highlights the irreversible bodily changes, including loss of fertility and altered sexual function, as well as typical surgical risks like infection and the need for revisions. Then there are the mental health and developmental outcomes that are poorly understood. ASPS highlights the Cass Review or systematic reviews from European countries that have been carrying out these procedures for longer than the U.S. In addition, they add a systematic review by the ASPS and the 2025 HHS report to the evidence base. 

When the people doing the surgery say that "the evidence is not there," it is insight that would be gained from lived clinical experience. Plastic surgeons profit from the surgery, tend to have a strong belief in bodily autonomy, and routinely defend elective procedures. If they are recommending that individuals under 19 do not undergo the procedure, perhaps there is a very good reason for that recommendation. 

Adults versus Adolescents

There are a number of things that I think are not good life decisions, whether that is having children before getting married, entering a polygamous marriage, smoking cigarettes, eating fast food every day, or not exercising. I also believe that as long as they are not harming anyone else, adults should be allowed to make whatever decisions about their lives, regardless of what I or anyone else thinks about the decision. This issue is not about adults making a decision to undergo these surgeries with informed consent nor is this about whether transgender individuals should be treated with dignity (for the record, they should, just like everyone else). 

We are talking about adolescents here, and the ASPS statement underscores an obvious point. Adolescents do not have the understanding (mens rea), maturity, or capacity to make such a decision. When a procedure is irreversible, the evidence base is against doing the procedure, and the patient is still in a developmental stage in their lives such as adolescence, this stance is both prudent and necessary. 

The Ideological House of Cards

This ASPS statement is not simply a victory for evidence-based science or maybe a chance that people can trust that the medical field will value evidence and safety over ideology. It is another example of how gender ideology is teetering like a house of cards. The MTF transgender athlete debate exposes contradictions between self-identity and biological reality. Gallup polling shows that more adults are in favor of transgender individuals playing on sports teams that correspond with their biological sex (currently at 69 percent). More adults are uncomfortable with pronoun usage, with discomfort increasing from 48 percent of adults in 2021 to 54 percent of adults in 2025. 

Meanwhile, acceptance of someone undergoing these procedures has declined from 46 percent in 2021 to 40 percent in 2025. Pew Research polling data from 2025 shows that 49 percent of Americans believe transgender individuals should use the bathroom corresponding to their biological sex, as well as 47 percent of adults who believe teachers should not teach students about gender identity. Add the medical risks and irreversible consequences for minors highlighted by ASPS, and it's clear as day that when ideology trumps evidence, this house of cards is not merely wobbly; it is poised to collapse. At the rate that it is going, it is simply a matter of when and how hard of a fall it will be. 

Trump's Tariffs Are Helping Push U.S. Allies into China's Arms and Undermining National Security

Last week, British Prime Minister Keir Starmer visited Chinese President Xi Jinping. This is the first time a British PM visited since 2018. The purpose of this visit was to reset Sino-British relations. One of the topics of discussion at this visit was trade. If this were an isolated incident, that would be one thing. But other Western nations are initiating trade talks with China. Last month, Canada struck a new trade deal with China. Finland, Ireland, and Germany are also re-engaging with China. There are multiple reasons for other Western countries to re-engage with China, whether it is economic development, access to a large consumer market, investment flows, or shifting geopolitics. 

Unpredictable U.S. Foreign Policy Adds Fuel

Those shifting geopolitics are particularly notable. In the last month alone, the Trump administration has captured Nicolás Maduro and threatened allies with tariffs in order to chase his dream of annexing Greenland, the latter of which is categorically unwise. Trump's foreign policy unpredictability creates incentives to hedge against an increasingly unreliable ally, which is hardly unsurprising seeing more Western countries gravitate towards China. One major factor that I would like to cover today is Trump's tariff policy and how that is becoming a turnoff for the US' allies. I will caveat by saying tariffs alone do not explain why other countries are re-engaging with China, but it is a major element that is part of the broader drive towards a pivot, as this analysis from the Chatham House details. 

Trade Diversion: Another Form of Tariffs Backfiring

The sad part is that this pivot is wholly predictable. I have talked about trade retaliation before here at Libertarian Jew. There is direct retaliation, which is when a country responds to tariffs by implementing their own tariffs in response. Then there is indirect retaliation, such as trade diversion. Trade diversion is what happens when tariffs or other trade barriers cause countries to shift imports and exports away from the most efficient or preferred trading partner toward alternative countries simply to avoid higher costs. Under trade diversion, the trade does not disappear but rather gets rerouted. 

Historical Evidence of Trade Diversion

Trade diversion has played out in history more than once. During the 1930s with Smoot-Hawley, a National Bureau of Economic Research (NBER) paper shows how U.S. exports to retaliating countries fell by 28-33 percent, and trade diversion also occurred. Another NBER paper discovered trade diversion as a result of US agricultural tariffs from 1990 to 2014. In Trump's first term, tariffs on China caused China to divert $21 billion of trade flows away from the United States to other countries (see below). In its 2025 paper on responses to Trump's tariffs, the International Monetary Fund (IMF) recognizes trade diversion as a response. Additionally, a study from the North American Journal of Economics and Finance shows how the signing of NAFTA and preferential tariff treatment with Mexico and Canada shifted US imports away from Asian sources toward Mexico. 

Trump's Tariff Strategy and Consequences for National Security

Trump's current trade strategy fits within this historical pattern of trade diversion. The problem is that Trump's posture on tariffs will continue to agitate U.S. allies and make it more attractive for some allies to deepen their economic ties with China. What Trump seems to not understand is that national security is not merely about what the U.S. can produce, but also the allies that one can rely on in times of crisis or need. Research shows that economic cooperation lends itself to stronger security cooperation.

Since tariffs make allies economically worse off, they are incentivized to look elsewhere. Having these allies increase trade and investment with China will create increased strategic dependence on China. What is more is that this re-engagement will mean that U.S. allies will invest more in China and Chinese suppliers. This entanglement with the Chinese economy will make U.S. allies less likely to align with U.S. strategic priorities. When allies rely more on China, China gains leverage and the U.S. will have less influence in trade negotiations, diplomacy, and security concerns abroad. This will undermine U.S. influence, which in turn weakens U.S. national security. 

"America First" Becomes "America Alone"

Trump's tariff strategy ultimately defeats its own stated purpose. Trump is not isolating China or strengthening American security. He is weakening the very alliances that give the United States leverage on the global stage. With a tariff-first approach, Trump is treating allies as economic adversaries, which understandably leads allies to diversify their trading partners more, including toward China. As allies partner more with China, the United States loses its global influence. National security is not only about domestic production, but also partners who share risks, supply chains, and strategic goals. By undermining these foundations, Trump is handing China geopolitical leverage. By alienating allies and strengthening a rival, "America first" becomes "America alone" while China has the last laugh. 

Immigrants Aren’t Draining Welfare: The Welfare State Is Draining America

Immigration is one of those peculiar topics in US policy debates that produce durable myths. They sound like plausible claims in theory, but collapse under the slightest bit of empirical evidence. Over the years, immigrants have been accused of spikes in crime, overwhelming public services, and draining this country's finances. These claims are so hard-wired into the political discourse that they harden into "conventional wisdom." Last year, I examined the "migrant crime wave" claim and refuted it by showing how immigrants are much less likely to commit crimes. 

Schrödinger's Immigrant and the Myth about Immigrants and Welfare

The welfare argument is no exception. In policy debates, you see what is jokingly referred to as Schrödinger's immigrant: an immigrant who is too lazy to work but manages to take all the jobs, which is a paradox that plays into an inaccurate, nativist caricature of immigrants. The nativist crowd at the Center for Immigrant Studies argues that immigrants consuming welfare and working can go together, thereby trying to refute the idea of Schrödinger's immigrant. While rhetorically clever, it only focuses on the theoretical possibility of the two co-existing rather than actual welfare consumption patterns. 

This is where research from the Cato Institute that was released last week comes into play. They actually did the work to see how much welfare and means-tested benefits are consumed by immigrants versus native-born US citizens. It turns out that immigrants consume about 24 percent less in welfare benefits than native-born citizens on a per capita basis. This finding lines up with a National Bureau of Economic Research paper from 2020 that looked at welfare use from 1995 to 2018. Guess what? Those researchers found that immigrants consume much less welfare than their native-born counterparts. 

Why Immigrants Consume Less Welfare

Immigrants consuming less welfare makes sense when you think it through. Immigrants are younger, healthier, and are more likely to either be working or actively seeking work. Because they come with a higher labor force participation rate and fewer chronic health conditions, they are less likely to need disability benefits or unemployment insurance. Furthermore, immigrants face legal and administrative barriers to receiving benefits. 

Immigrants as Net Contributors to Society

When you hear this anti-immigrant diatribe of immigrants draining the welfare system, it ignores the other half of the conversation, which is what immigrants contribute to the economy and to society. In 2024, I illustrated how immigrants contribute billions in income, property, and sales taxes every year. When you look at both the costs and the benefits, the picture flips. Immigrants do not merely "pay their own way." It turns out that immigrants are actually a net positive for government budgets. 

The Real Problem: The Welfare State

The evidence is clear. Immigrants are not the ones bankrupting this country. Immigrants use less welfare than native-born citizens and also contribute significantly in taxes. In net, immigrants are a benefit to the economy, not a burden. I have been consistent in critiquing the welfare state, whether it has been Social Security, Medicare, Medicaid, food stamps, or TANF. The anti-immigrant crowd rails against immigrants supposedly "draining the system" (which they don't), yet pays far less attention to the programs that drain this country's finances. If anti-immigrant nativists want to get at the real problem, they would go after the real problem of a large welfare state that costs the American people hundreds of billions of dollars every year. Otherwise, that is not fiscal responsibility or concerns about taxpayer dollars. That's just scapegoating dressed up as moral outrage.

Americans Pay, Trump Tariffs Stay: New Study Confirms Why Tariffs Are Ridiculous

From tomatoes and furniture to automobiles and movies, the U.S. tariff regime has expanded dramatically under President Trump's second term. Trump has insisted that tariffs would be paid by foreigners. Economists have shown that tariffs are hidden domestic taxes paid by the American people. This should not come as a surprise. As I explained last year, it was the American consumer that almost exclusively paid for the cost of Trump's tariffs in his first term. 

Now we have a study from the Kiel Institute released last week showing that about 96 percent of tariffs in Trump's second term have been paid for by the American people. That translates to Americans paying $267 billion in tariffs last year. This study is significant because it uses recent trade data and millions of imports transactions totaling trillions of dollars in trade. This study acts as hard, empirical evidence for the second-term Trump tariffs that goes beyond theory or anecdote. 

So why do Americans end up paying for Trump's tariffs? Tariffs are taxes on imports. When foreign exporters decide to not reduce their prices enough to absorb them (and let's be real...they rarely do, as we see with this new study), U.S. importers face higher costs. Most firms respond by passing the increase along to consumers, either directly in retail price increases or indirectly through higher costs for goods that rely on imported inputs. In effect, tariffs function as a hidden tax on American households, hitting every buyer in the store, from groceries to electronics. 

Trump's tariff rhetoric rested on more than the claim that foreign exporters would pay for them. Trump also promised that tariffs would protect American industries and workers, and that they would strengthen the United States in trade negotiations. The reality, as the Kiel Institute study makes crystal clear is that 96 percent of the cost of Trump's second-term tariffs have been borne by American consumers and businesses, not foreigners. 

As for protecting domestic producers, this protects a small group of well-connected producers, but causes net unemployment. This outcome played out with Trump's tariffs on steel and aluminum. Those modest gains to the protected industries are infinitesimally small in comparison to the cost to the consumers. In net, the tariffs act as a wealth transfer from the American people to the few producers who are protected as a result of Trump's tariffs. 

Regarding the leverage in international trade, it does not fare much better. Trump's logic was simple: raising the cost of exports for foreign countries exporting to the United States and they will capitulate to Trump's demands. What we see is that it is not foreign countries that pay for this bargaining tool, but it is U.S. consumers that foot the bill for Trump's negotiating strategy. This negotiation advantage is rhetorical in its bluster, but divorced from economic reality. 

Whether it is the idea that foreigners pay tariffs, the U.S. economy fares better, or it provides the United States with better negotiating leverage, we see that Trump's tariffs are myths built on a flimsy house of cards. Trump's tariffs ended up being a wealth transfer from the American people to select, well-connected domestic firms. The Kiel Institute study is not merely an academic exercise. It provides a clear and evidence-based counterargument against the populism that drives Trump's tariff policy. Americans get stuck with the bill, economists are shaking their heads, Trump's tariff promises remain unfulfilled, and yet the tariffs remain. If there were a 21st-century textbook example of trade travesty, these tariffs would be it. 

The Weight of Reality and How Fat Positivity Meets the Economics of Airplane Seats

Southwest Airlines made some changes to its airline policy that went into effect today. It might sound relatively uneventful at first glance, but one of its policy changes re-ignited a culture war. No, it was not announcing assigned seating, although Southwest distinguished itself by not having assigned seating. It was its decision to charge obese customers (or what Southwest calls "customers of size") for an extra seat if they take up two seats' worth of space on an airplane. 

Not Just a Tight Fit: The U.S. Versus the World

On the one hand, airline seats have been shrinking since the 1980s. On the other hand, economy seats across the world have a seat width of 16 to 18 inches and a seat pitch of 30 to 32 inches. Yet it is only in the United States that this amounts to a battlefield in the culture wars. Why? The United States is made up of a lot of fat people. I wish that were hyperbole. According to a 2024 study from The Lancet, about three quarters of Americans are either overweight or obese. A 2024 report from the Food and Agriculture Organization (FAO) found that the United States is the most obese country in the developed world. 

Fat Acceptance v. Economic Reality

The National Association to Advance Fat Acceptance (NAAFA), which apparently is a thing, took issue with Southwest's decision and framed it as an accessibility issue. The fact that there is a NAAFA or that the word "fatphobia" made its way into the English language is part of the problem. As I pointed out in my 2022 piece entitled We Should Not Shame the Obese, But We Should Not Glorify Obesity Either, obesity should not be normalized or glorified because obesity comes with serious health and economic consequences. 

While there are genetic and environmental factors that influence weight, too often people treat it like someone else's fault, whether it is the food industry, sedentary jobs, or society writ large. As I wrote last Rosh Hashanah, it is easy to blame circumstances for outcomes, but taking ownership of one's life means accepting the consequences of one's actions. Is it easy to maintain a good diet, sleep hygiene, and exercise regimen? It is not easy, but it is necessary for living a healthy life. As the saying goes, "if you do not make time for your wellness, you will be forced to make time for your illness." Treating being obese as a harmless identity or glorifying it undermines personal responsibility and a public understanding of those consequences.

Whether or not the people at NAAFA want to hear it, one of those consequences and downstream effects of obesity has to do with fitting in airline seats. There is an economic reality that the fat acceptance crowd does not want to hear. The number of seats on an airplane is limited, and this economic scarcity creates constraints. This is complicated by the fact that in spite of high revenue, airlines make about a 3-4 percent profit margin. According to the data from the NYU Stern School of Business (as of January 2026), this is actually a low profit margin compared to the overall average of 9.7 percent. It is especially low compared to pharmaceuticals at 18.5 percent, financial services at 22 percent, or insurance at 12.4 percent.

It's Economics, Not Oppression of Fat People

Rhetoric about discrimination against fat people collapses when it runs into economic reality. Airline margins are thin and airline seats are revenue generators. Because of these economic limits, the choice is not whether to charge, but rather who pays the cost. If the airline absorbs the cost, seats will become more expensive for everyone. If the non-plus-size customers pay for it, it creates crowding and resentment. If it is the plus-size customer, then that is cost-based differential pricing because a passenger who requires more physical space imposes higher capacity costs on the carrier. 

Competition Could Fix This....If the FAA Would Let It

There is another factor that the libertarian think tank Competitive Enterprise Institute (CEI) details in its analysis on this issue: a lack of market competition in the airline industry. CEI points out that airline consolidation and a lack of true competition reduce carriers' incentives to innovate or offer differentiated seating options, which incentivizes airlines to rely on blunt, uniform policies like charging for extra seats. Since competition is constrained, customers are left with few options when it comes to pricing or such customer quality measures as seat sizes. As a result of this market structure, airlines are left to allocate that scarce space in socially awkward and tense ways. CEI identifies such barriers as airline slot controls, exclusive-use gate leases, and barring foreign competitors from competing on domestic U.S. routes as culprits. I personally think it would be great if the Federal Aviation Administration removed those barriers, but whether they get around to it is a whole different story. 

Airline Economics > Culture War Outrage

When all is said and done, this is not about the moral failing of airlines or whether fat people are "oppressed." Blaming Southwest will not alter physics and tweeting about discrimination against fat people does not change such realities as airlines operating on wafer-thin margins, the finite number of seats, the lack of market competition, or that Americans take up more space than they used to. The truth is that this poorly functioning market cannot allocate seats as efficiently as it ought to. This is not personal or a moral condemnation of obese people. Planes cannot defy physics and passengers cannot contort themselves to fit into seats. Until the U.S. airline market faces real competition or until waistlines shrink, airline seating will remain as uncomfortable as the culture war arguments over it.

Trump’s Credit Card Crackdown and the Costly Consequences of His Price Controls

Credit cards are a convenient and safe way to make purchases, but they come at a cost. There are interest rates, annual fees, late payment fees, cash advance fees, balance transfer fees, foreign transaction fees, returned payment fees, the list goes on. These extra costs add up over time. Data from the Federal Reserve shows that U.S. credit card has increased over time and is now over $1 trillion. According to consumer intelligence company J.D. Power, 53 percent of current cardholders are carrying card debt, which is up from 51 percent the previous year.  

Trump has made affordability a top priority for his domestic policy in 2026. One aspect of affordability that Trump has eyed is credit cards. On January 9, Trump used Truth Social to announce his support for a credit card interest rate cap at 10 percent, which is even lower than what Bernie Sanders' 15 percent proposed in 2018. The following Tuesday, January 13, Trump said that he was in favor of the Credit Card Competition Act (CCCA), which includes a cap on credit card swipe fees. Three days later, the Senate reintroduced the CCCA. While capping credit card interest rates and swipe fees sound appealing or helpful on the surface, the truth is that they have unintended consequences for consumers and the credit market. 

Credit Card Interest Rate Caps Cannot Cap Economic Reality

President Trump's proposal to cap credit card interest rates at 10 percent for one year is rooted in affordability concerns. The Competitive Enterprise Institute (CEI) does a fine job at analyzing the empirical evidence and explaining how Trump's premise is based on a fundamental misunderstanding of how credit card markets work. Interest rates on credit cards are not arbitrary price gouging or profiteering by the "greedy credit card companies." They are the price of risk and operation costs for unsecured lending. Setting an artificial ceiling below the market rate does not make credit magically cheaper. It reduces availability by making lending to higher-risk borrowers unprofitable. CEI cites examples across borders and across time illustrating where interest rate caps constrained credit supply, showing that lenders retreat from offering loans when a price ceiling binds. This will mean fewer credit cards, reduced access for lower-income and subprime consumers, and unintentionally harming the everyday American that Trump claims that he is helping. 

Moreover, CEI points out that those who manage to keep their credit cards still pay in the form of higher fees, lower rewards, and reduced credit limits. This will parallel what happened with the Durbin Amendment's cap on debit card interchange fees, which resulted in higher checking account fees and lower rewards for consumers. An interest rate cap will punish consumers with the real potential of pushing Americans towards riskier alternatives, whether that is payday loans, pawn shops, or loan sharks.

Forced Routing Won't Solve Credit Card Woes

The 2026 Credit Card Competition Act (CCCA) continues the approach of earlier versions of the CCCA by requiring large credit card issuers to allow merchant to route transactions over multiple networks, inching at leas one network outside of Visa and Mastercard. The premise of this bill is to encourage competition to loosen the grip of the "Visa-Mastercard" duopoly, which arguably exists. According to the most recent market data, Visa and Mastercard account for about 90 percent of the market measured in purchase volume. While this aims to increase competition and put downward pressure on swipe fees, the bill does not impose a hard federal fee cap like the Durbin Amendment does for debit cards. 

Regardless of the market concentration, this forced routing is not a solution to the problem. Fortunately (or unfortunately, depending on how you view it), this forced routing has been proposed and scrutinized in the past, which gives more to say about the proposal. As International Center for Law & Economics (ICLE) Senior Scholar Julian Morris points out, this routing scheme would incentivize merchants to reroute transactions to the lowest-cost network, regardless of rewards or security. This would explain why a research paper from the University of Miami shows that if implemented, small businesses will lose access to $700 billion in access to revolving credit and $1 billion in rewards (Chakraborty, 2024).

This is plausible because we already saw with the Durbin Amendment's debit card interchange fee cap what happens, as CEI illustrates in its analysis. Rather than lower consumer prices, the cap primarily benefited large retailers while banks recouped lost revenue by charging higher fees and reducing free or low-cost banking services, all of which harmed the consumers that this was meant to help. Research from ICLE details historic examples of these price controls beyond the United States, including Australia, the European Union, and Spain prior to joining the European Union (Morris et al., 2022). 

The CCCA's forced routing mechanism is different than a hard cap, but it is an example of using federal power to try to engineer lower prices with price controls in a complex market, damn the unintended consequences. If this passes, do not be surprised if there are higher credit card fees, lower credit access, lower cash back rewards, and lower rewards points. 

Two Different Policies, One Failed Approach of Price Controls

In the 2024 presidential campaign, Kamala Harris proposed a ban on price gouging for groceries. Aside from me calling her out on economic idiocy, Trump called her proposed price control Communist and "Soviet-style." He was right to do so because price controls are a staple of a communist economy. 

Trump’s critique, however, loses credibility when he embraces that same Soviet-style thinking that price controls work because his intention is to help with affordability. It does not matter whether it is through an interest rate cap or the CCCA's forced routing. Price controls are government meddling that do not eliminate prices, but rather shifts prices and typically does so towards the very customers politicians are claiming to help. 

Smaller competitors like Discover, American Express, or fintech networks do not need government mandates to compete. They can grow organically by offering better rewards, lower fees, superior technology, and innovative consumer experiences that attract both banks and merchants. Meanwhile, the government can remove burdensome regulations, whether it is compliance costs for new entrants (e.g., AML, KYC, PCI), adjust risk-weighting rules to better reflect actual credit risk (especially in Basel III in Dodd-Frank), repeal the existing price controls in the Durbin Amendment, and simplify disclosure requirements for merchants. Real competition arises when incentives alight naturally, not when the government attempts to engineer outcomes. 

Markets do not become more humane when one political party adopts price controls versus another. And they sure do not stop being destructive when it is targeted at credit cards instead of groceries. Economic reality does not change for an election year, no matter how much politicians wish it would.