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Here’s a letter to the Wall Street Journal.

Editor:

Desmond Lachman correctly explains that Trump’s tariffs won’t reduce U.S. trade deficits (Letters, November 8). In doing so, however, Mr. Lachman uses language that mistakenly suggests that trade deficits are necessarily a problem. He writes: “A basic economic truth is that a trade deficit is simply the result of a country spending on consumption and investment more than it produces.”

Although conventional, this language subtly misleads. A country isn’t a person or an organization, and so “it” doesn’t consume, save, invest, or produce. When we economists say, for example, that “America invests,” what we really refer to are the investments made in the geopolitical region known as “America” by individuals and organizations. Some of these individuals and organizations are American and others are foreign. Yet in discussions of the balance of trade these investment decisions are all lumped together into the phrase “America invests.” When this investment exceeds the amount that Americans save, the impression is created that we Americans are living beyond our means – that in order to make up the difference between what we save and what is invested here, we must borrow the funds from foreigners.

This impression is false because “we” don’t make all of these investments. Many of the investments in America are equity investments made by foreigners. When Ikea builds a store in Ohio the U.S trade deficit rises, but the investment is done by foreigners, not by Americans. This investment is neither a result nor a symptom of us Americans living beyond our means. It is, instead, a happy indication of the attractiveness to global investors of America’s economy.

Evidence confirms that U.S. trade deficits haven’t drained Americans of wealth. The real net worth of the average American household today is 236 percent higher than it was in 1975, the year when America last ran an annual trade surplus.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

The post A Country, As Such, Doesn’t Consume, Save, Invest, or Produce appeared first on Cafe Hayek.

That is the new William Easterly book, and the subtitle is The West’s Conquest of the Rest.  I liked this book very much, but found the title and also book jacket and descriptions misleading.  I think of this work as a full-throated examination and study of the classical liberal anti-imperialist tradition.  We have been needing such a thing for a long time.  It is not that I expected Easterly to be poorly informed, but it amazes me how well he knows this material from a historical point of view.  A lengthy (and good) discussion of E.D. Morel!

So recommended, and here’s hoping these traditions find some new legs and less crazy adherents.

The post *Violent Saviors* appeared first on Marginal REVOLUTION.

Factories of Ideas? Big Business and the Golden Age of American Innovation (Job Market Paper) [PDF]

This paper studies the Great Merger Wave (GMW) of 1895-1904—the largest consolidation event in U.S. history—to identify how Big Business affected American innovation. Between 1880 and 1940, the U.S. experienced a golden age of breakthrough discoveries in chemistry, electronics, and telecommunications that established its technological leadership. Using newly constructed data linking firms, patents, and inventors, I show that consolidation substantially increased innovation. Among firms already innovating before the GMW, consolidation led to an increase of 6 patents and 0.6 breakthroughs per year—roughly four-fold and six-fold increases, respectively. Firms with no prior patents were more likely to begin innovating. The establishment of corporate R\&D laboratories served as a key mechanism driving these gains. Building a matched inventor–firm panel, I show that lab-owning firms enjoyed a productivity premium not due to inventor sorting, robust within size and technology classes. To assess whether firm-level effects translated into broader technological progress, I examine total patenting within technological domains. Overall, the GMW increased breakthroughs by 13% between 1905 and 1940, with the largest gains in science-based fields (30% increase).

That is the job market paper of Pier Paolo Creanza, who is on the market this year from Princeton.

The post In defense of Schumpeter appeared first on Marginal REVOLUTION.

On her Thursday night program, MSNBC’s Jen Psaki accused the Trump administration of wrongfully using the name of well-known Jeffrey Epstein victim Virginia Giuffre as a means to discredit the recent unveiling of Epstein e-mails. Many Democrats have held that pushing for a full-disclosure of information relating to the late sex offender could expose potential co-perpetrators and would bring justice to his many victims. But Psaki didn’t seem to care about what the late Giuffre had to say. She shamed the White House for naming her. The Briefing host claimed: “... Trump and the White House are already trying to discredit everything in this trove of documents. They're working overtime to do this. And they are trying to use the name of Epstein survivor to get away with it.” Here’s the background: the Epstein scandal was reignited on Wednesday when House Oversight Committee Democrats, in an attempt to shift attention away from the ending government shutdown, released three emails from Jeffrey Epstein’s estate that referenced Trump, in which victims’ names were redacted. In response, the Republican majority released over 20,000 documents and chastised the minority for deceptively redacting Giuffre’s name.     What was Psaki’s spin? Defending Democrats for giving victims’ their space and denouncing Republicans for calling foul: The Democrats on the committee redacted that victim's name, as they’ve tried to do with the names of all of Epstein survivors, in part to allow them to tell their own stories on their own terms if they want to. But within an hour of the release, the Republican majority on the House Oversight Committee promptly outed the victim as Virginia Giuffre, apparently doing so just so they could point to past statements of Giuffre's in which she said she had never seen Trump do anything wrong. So again, they're outing an Epstein survivor for political gain. Considering that Epstein died over six years ago, the argument that authorities and public officials still needed time to redact victims’ names has gotten old and unbelievable. But just because Trump wasn’t necessarily implicated by the newly uncovered documents didn’t mean he was trying to distort the truth. Republicans weren’t “outing” Giuffre since she was already publicly known to be a victim and spoke publicly about Trump. The deceased Giuffre had already recalled Trump not participating in any illicit activity relating to Epstein. The former Press Secretary then went after current post-holder Karoline Leavitt for mispronouncing Giuffre’s last name and for daring to defend her boss: “The reason Karoline Leavitt and House Republicans were invoking and have been invoking Virginia Giuffre’s name is not to help tell her story or to push for releasing more documents like her family wants, but to try to cover Trump's butt.” Democrats and the left-wing media clearly hoped the latest development in the ongoing saga would finally damn Trump. The full extent of what those new documents revealed wasn’t yet known. But considering that the Oversight Democrats hand-picked only a few (and intentionally edited them to make Trump look bad), it begged the question of how much ammunition they really had to begin with. And Psaki didn’t intend to stop psucking. The transcript is below. Click "expand" read: MSNBC’s The Briefing with Jen Psaki November 13, 2025 9:07:14 p.m. EST (…) JEN PSAKI: Now journalists have only had the documents the House Oversight Committee released for a little more than a day now. But Trump and the White House are already trying to discredit everything in this trove of documents. They're working overtime to do this. And they are trying to use the name of Epstein survivor to get away with it. Yesterday, the very first email that the Democrats on the House Oversight Committee released showed Epstein writing Ghislaine Maxwell to say that Trump was the, quote, “dog that hasn't barked,” and that a victim spent hours at Epstein's house with Trump. The Democrats on the committee redacted that victim's name, as they’ve tried to do with the names of all of Epstein survivors, in part to allow them to tell their own stories on their own terms if they want to. But within an hour of the release, the Republican majority on the House Oversight Committee promptly outed the victim as Virginia Giuffre, apparently doing so just so they could point to past statements of Giuffre's in which she said she had never seen Trump do anything wrong. So again, they're outing an Epstein survivor for political gain. And just to be clear, this was not a one off. White House Press Secretary Karoline Leavitt promptly did the same in a press release, and then at the White House press briefing yesterday, Leavitt had the gall to again invoke Giuffre's name to defend Trump without even learning how to pronounce it. [Cuts to clip] WEIJIA JIANG [on 11/12/25]: Did the President ever spend hours at Jeffrey Epstein's house with a victim? PRESS SEC. KAROLINE LEAVITT [on 11/12/25]: These emails prove absolutely nothing other than the fact that President Trump did nothing wrong. [Transition] In this email you referred to with the name of a victim that was unredacted now and has since been reported on in this room, so I will go ahead and say it, Virginia Giuffre. [Cuts back to live] PSAKI: It's Virginia Giuffre — Giuffre. Sorry, that's just incredibly insulting. But here's what she went on to say. [Cuts to clip] LEAVITT [on 11/12/25]: Miss Guthrie maintained — and God rest her soul — that she maintained that there was nothing inappropriate she ever witnessed, that President Trump was always extremely professional and friendly to her. [Cuts back to live] PSAKI: Now, again, the reason Karoline Leavitt and House Republicans were invoking and have been invoking Virginia Giuffre’s name is not to help tell her story or to push for releasing more documents like her family wants, but to try to cover Trump's butt.

The obnoxiously liberal Orlando Sentinel, one of Florida's largest newspapers, tried smear-by-association against Florida’s Republican Gov. Ron DeSantis with an 1,800-word front-page hit job Friday. The headline was unbelievable in its tone of moral blackmail and disinformation: Ron DeSantis is a veteran. So are 7 inmates he's sending to execution. It’s the brutal murders the inmates committed, some of the victims young children, that is sending them to execution, not the governor, no matter how much the Sentinel loathes him. This comes from the same left-wing paper that published an op-ed on the war in Gaza that mangled the truth about Hamas and their "alleged violence against civilians." The byline on this story came from Oishika Neogi of The War Horse, a liberal military news site, and was listed as a “Special to the Orlando Sentinel,” meaning the Sentinel bypassed their own journalists to plaster this hit on its front page -- a story that doesn’t appear on the Sentinel’s website. Downplayed or left out of the story – the awful details of why these convicted killers were being executed. The caravan of executions started with a U.S. Army veteran in March. It continued in May with a former Army Ranger who served in the Gulf War, then an Air Force veteran in July, a former National Guard member in August, and a Navy veteran in October. On Thursday, a former Marine became the latest casualty, and next week, yet another Army veteran is scheduled to die in what Florida Gov. Ron DeSantis has called the "most veteran-friendly state in the nation." He's the one who signed all seven of their death warrants. The governor wielding the executioner's pen is a Navy veteran himself. .... While veterans represent an estimated 12% of Florida's 256 death row inmates, they account for nearly 40% of the 18 death warrants that the governor has signed this year. DeSantis, a former JAG officer who served as a legal adviser to SEAL Team One in Iraq, has ignored the pleas of some veteran advocates and refused to address the disproportionate ratio of former service members he is sending to the Florida State Prison's execution chamber. The story was based on a report from the Death Penalty Information Center, which warned of a ​"battlefield-to-prison" pipeline. Only briefly are the actual heinous crimes of these supposed victims of DeSantis aired out. Victims' advocates argue that Hutchinson's horrific crimes speak for themselves: He was convicted for the murder of his girlfriend and her three children, after busting down the front door of their north Florida home on Sept. 11, 1998, and finding them in the master bedroom. He shot mom Renee Flaherty and her kids, seven-year-old Amanda and four-year-old Logan, all in the head. Then he turned the gun on nine-year-old Geoffrey. Neogi wailed, "the governor has failed to address why so many of those inmates this year are veterans." Her contrary evidence was larded with unrelated political gripes. In 1982, Bates was an active member of the National Guard when he was charged in the brutal murder of Janet Renee White. Prosecutors say he abducted White from her office, stole her diamond ring, attempted to rape her, and stabbed her to death. The trial of Bates, who was Black, opened with a prayer from the victim's minister, who asked for the judge and the all-white jury to have "wisdom." With no mention of Bates' military background, he was sentenced to death within an hour of deliberations. But the Florida Supreme Court threw out his original death penalty and ordered the trial court to reconsider his sentence. This time, attorney Tom Dunn, a U.S. Army veteran, represented Bates with one aim: to persuade the jury that Bates was not the "worst of the worst," and that life in prison, not death, was appropriate. .... ....Bates was among thousands of National Guard members sent into Miami after an all-white jury acquitted four white police officers in the beating of Arthur McDuffie, a Black Marine Corps veteran, left in a coma after a traffic stop in December 1979…. Gov. DeSantis took to X to respond to a related story filed by Axios Tampa Bay, which used the same report from the Death Penalty Information Center. Why do legacy media outlets try so hard to make mass murders sympathetic? How about showing sympathy for the woman and three young children that this “veteran” brutally killed?

Sydney Sweeneyhasn’t quite managed to find the same success at the box office as she has on the small screen. Despite acclaimed performances in shows like The White Lotus and Euphoria, Sweeney has had a tough run of appearing in films that underperformed in comparison to expectations. While she’s shown an interest in transforming herself in order to play real people, Sweeney gave her greatest performance to date in an underseen biopic that debuted on HBO. Reality was picked up by HBO Films shortly after its debut at the Berlin Film Festival, and it's not entirely surprising to see why it skipped theaters; when compared to more straightforward biopics, Reality takes an unconventional approach to replicating recorded conversations.