Carpe Diem

Bonus chart of the day: Expected inflation from the bond market using the 10-year Treasury-TIPS spread = 2.23%

spreadThe monthly 10-year Breakeven Inflation Rate over the last ten years is displayed above and represents a market-based measure of expected inflation derived from the spread between 10-Year Treasury Constant Maturity Securities and 10-Year Treasury Inflation-Indexed Constant Maturity Securities as calculated and reported by the St. Louis Federal Reserve. The latest value from the Treasury spread in June implies that bond market participants expect inflation to average 2.23% annually over the next 10 years. In other words, the current bond market-determined measure of expected inflation, based on thousands of bond market participants who are putting millions of dollars at stake, suggests that inflation will remain low and stable over the next ten years at less than 2.50%. More market-based evidence that there are currently no inflationary pressures building in the US economy, even over a ten-year horizon.

See Jimmy P’s related post about inflation (“Why Amity Shlaes is Dead Wrong About Inflation”) here and my recent post (“More on Why Amity Shlaes is Dead Wrong About Inflation”) here.

Update: Here’s a related chart below of the “Expected Inflation Yield Curve” from 2015 to 2044, based on the Cleveland Fed’s estimates of inflation expectations for one-year periods out to a time horizon of 30 years. According to the Cleveland Fed:

The Cleveland Fed’s estimate of inflation expectations is based on a model that combines information from a number of sources to address the shortcomings of other, commonly used measures, such as the “break-even” rate derived from Treasury inflation protected securities (TIPS) or survey-based estimates.

The Federal Reserve Bank of Cleveland reports that its latest estimate of 10-year expected inflation is 1.83% (see chart below). In other words, the public currently expects the inflation rate to be less than 2 on average over the next decade.

clevelandMore empirical evidence that future inflation, out to a time horizon of 30 years, is expected to remain low and stable in a range between 1.5% and 2.25%.

Carpe Diem, Economics, Energy and the Environment

Chart of the day: The Great American Energy Boom

gasoilThe chart above helps to illustrate the significance of America’s shale oil and gas boom by showing the combined domestic output of US oil and gas (in quadrillion BTUs, EIA data here). After production of conventional oil and gas peaked around 1970 at almost 45 quadrillion BTUs, there was a gradual, steady decline that continued until about 2005, when combined production had dropped to a 43-year low of 31.85 quadrillion BTUs, the lowest level since 1962. If that trend had continued, the US would now be producing only about 30 quadrillion BTUs of oil and gas (or less), which would have put us back to the production level of the late 1950s.

But then on the way to an era of increasing energy scarcity, a fortuitous series of technological drilling and extraction technologies emerged, thanks to the efforts of a dedicated group of American “petropreneurs”, and those technologies pumped life back into the country’s oil and gas production. By tapping into previously inaccessible reserves of tight oil and gas trapped in shale rock formations miles below the Earth’s surface, US drillers increased domestic production of oil and gas by 40% between 2005 and 2013, bringing America’s output up to the highest level (44.11 quadrillion BTUs) last year since 1973, and just shy of the all-time record of 44.85 quadrillion BTUs in 1971. Last year’s output was also 17.7 quadrillion BTUs above the estimated output level that would have prevailed if the declining trend in conventional oil and gas resources through 2005 had continued. Based on the current pace of production increases, I estimate that combined oil and gas production in the US will reach 47.7 quadrillion BTUs this year and set a new all-time record that will be three quadrillion BTUs (and more than 6%) above the previous 1971 record.

MP: As I have said before, the Great American Energy Boom that has allowed us to access oceans of shale oil and gas is at the forefront of America’s economic recovery and provides the best reason to be optimistic about our country’s economic, energy, and geopolitical future. The chart above helps to put that energy-based economic optimism into perspective graphically.

Carpe oleum.    

Carpe Diem

Quotation of the day on the great harm done by the ‘professional do-gooders’….

…. is from Henry Grady Weaver’s 1947 book The Mainspring of Human Progress (in reference to material that originally appeared in Isabel Patterson’s book The God of the Machine):

Most of the major ills of the world have been caused by well-meaning people who ignored the principle of individual freedom, except as applied to themselves, and who were obsessed with fanatical zeal to improve the lot of mankind-in-the-mass through some pet formula of their own. The harm done by ordinary criminals, murderers, gangsters, and thieves is negligible in comparison with the agony inflicted upon human beings by the professional do-gooders, who attempt to set themselves up as gods on earth and who would ruthlessly force their views on all others with the abiding assurance that the end justifies the means.

Related: In his 1996 book The Vision of the Anointed Thomas Sowell explores the great social and economic harm done by professional do-gooders, or by the elite, liberal intelligentsia that he refers to as “the anointed”:

Sowell presents a devastating critique of the mind-set behind the failed social policies of the past thirty years. Sowell sees what has happened during that time not as a series of isolated mistakes but as a logical consequence of a tainted vision whose defects have led to crises in education, crime, and family dynamics, and to other social pathologies. In this book, he describes how elites—the anointed—have replaced facts and rational thinking with rhetorical assertions, thereby altering the course of our social policy.

HT: Dennis Gartman in today’s The Gartman Letter (for the first quote)

Carpe Diem

Sunday afternoon linkage/chart-fest, all automotive edition

autoexports1. US auto exports. The US exported more than one million motor vehicles in 2012 (1,030,500) for the first time ever (see chart). Last year, auto exports rose by 13% to a new record high of 1,165,300 vehicles. During the first four months of this year at 404,700 vehicles, auto exports are 8.2% above the same period last year (374,200), and will likely set another annual record in 2014 of more than 1.2 million units. In 2009, the US exported only 455,700 vehicles, so the rebound by 2012 to more than one million vehicles is pretty impressive.

2. Which automaker in the US exports the most cars to markets outside North America? Hint: It’s not GM, Ford, Chrysler and it’s not Toyota or Honda. It’s BMW, which exports its US-made cars and SUVs to more than 140 countries from its single US plant in Spartanburg, South Carolina. That’s according to a recent profile by Bloomberg of BMW and its Spartanburg plant’s 20th anniversary. Bloomberg also reports that BMW exports more vehicles from Spartanburg to markets outside North America than all of the automotive facilities combined in the entire state of Michigan. Here are some more interesting facts from the Bloomberg article:

  • BMW plans to increase capacity in Spartanburg by 50%, from 300,000 vehicles a year currently to 450,000 within a few years.
  • Pushed by spiraling energy costs and tightening labor rules in Germany, Munich-based BMW will have poured $7.3 billion into the site once the latest expansion is completed in two years.
  • Auto workers in the U.S. are about 47% cheaper to employ than their counterparts in Germany.
  • Almost all of BMW’s SUVs, including the new top-of-the-line X7, are made in Spartanburg, and 70% are exported to more than 140 countries from what was BMW’s first test of full-scale auto production outside Germany.

cars13. Motor Vehicle Assemblies. According to the Federal Reserve, motor vehicle assemblies in the US in May at 11.74 million units were the highest since April 2006, more than eight years ago, and almost three times higher than the recession-driven low of fewer than 4 million units in January 2009 (see chart above). June assemblies (11.65 million units) declined slightly from May, but were up by almost 4% on a year-over-year basis, and were up by almost 2.5% compared to June 2007 in the summer before the Great Recession.

carip4. Motor Vehicle and Parts Production. The Federal Reserve also reported last week that its index measure of total manufacturing activity related to the production of motor vehicles and parts increased to a new record high in June, and was above last year’s level in June by almost 7% (see chart above).

truckshare5. Truck Market Share. The chart above shows the increasing trend over time going back to 1955 of truck sales as a share of total auto sales according to data from Wards Auto. In 1955, fewer than one out of every eight new vehicles sold was a truck (11.96%), but by 1978 the market share of trucks went above 25% for the first time, by 1989 more than one out of every three new vehicles was a truck, and in 1999 the market share of trucks went above 50% for the first time. The peak market share for trucks was reached in 2004 at 56.7%, before falling below 50% in 2008 and 2009, likely due to the effects of the recession. Since the recovery started, truck market share has been back above 50% and was 52.2% last year.

big3share6. Big 3 Market Share. The chart above also features data from Wards Auto and displays the annual US market share of the Big Three (GM, Ford, and Chrysler), which peaked at 90.6% in 1965, fell below 75% for the first time in 1980, below two-thirds market share for the first time in 2000 and below 50% for the first time in 2008. Last year, the Big 3 market share was 44.6%.

carindex7. American-Made Index (AMI). The graphic above displays the results of the 2014 American-Made Index from, showing that Japanese-based automakers Toyota and Honda captured 7 of the top 10 spots for the most “American-made cars.” In the three previous years’ rankings (2011, 2012 and 2013), Honda and Toyota had 5 of the top 10 spots and shared the Top Ten most American-made vehicles equally with the Big Three. Some interesting commentary from

Only these 10 cars [above in the list] were eligible for the AMI, the fewest in the study’s nine-year history. For the 2014 model year, just 13 models assembled in the U.S. have domestic-parts content of 75% or higher, according to the National Highway Traffic Safety Administration, but three of those, including the Avenger, were disqualified because they’re being discontinued. In the 2013 model year, 14 cars met that threshold. Twenty cars met the threshold in the 2012 model year, and 30 cars met it a year before that.

More evidence (along with items #1, #2 and #7 above) that the automotive industry has become increasingly globalized to the point that the distinction between an “American” and “foreign” car has become more and more meaningless, as has the importance of to what degree a car is “American-made.” Hopefully, most consumers are now buying cars based on value, price, service and quality, and aren’t discriminating based on a car’s “national origin” – which doesn’t mean much any more.

carscpi8. New Car Prices vs Overall CPI. Finally, the last chart above shows the CPI for All Items (blue line) and the CPI for New Vehicles (brown line), annually from 1982 to 2013. As can be seen, the overall price level has risen more than 141% compared to less than a 50% increase in the CPI for new vehicles. For the last 20 years starting around 1994, the CPI measurement for the cost of new vehicles (adjusted for quality, options, safety, fuel economy, durability, carrying capacity, comfort and reliability) has remained flat during a period when overall consumer prices have increased 57.2% (and average hourly wages by 82%).

Bottom Line: As I’ve commented before, I don’t think there has ever been a better time to own or buy a car than today, considering all of the factors that are important to consumers: price, value, safety, quality, durability, comfort, options, selection, warranty coverage, etc. And probably the main reason that car buyers have it so good today: international competition and the increasing globalization of the marketplace for new vehicles. I’ve also said before that “competition breeds competence,” and I don’t think there’s any doubt that intense global competition has bred much, much greater competence into America’s auto industry. We’re all much better off today as consumers compared to past periods when the Big 3 enjoyed a 90% market share, and the UAW enjoyed an ever bigger share — 100% — of the US autoworker market!

Carpe Diem

Global income inequality has been falling for the last 20 years, moving the world in a fundamentally better direction

povertyAn excerpt from Tyler Cowen’s excellent op-ed in today’s NY Times Income “Inequality Is Not Rising Globally. It’s Falling.“:

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough.

The finding comes from a recent investigation by Christoph Lakner and Branko Milanovic. And while such a framing may sound startling at first, it should be intuitive upon reflection. The economic surges of China, India and some other nations have been among the most egalitarian developments in history (see chart above showing declining world poverty rates, especially in East Asia).

Of course, no one should use this observation as an excuse to stop helping the less fortunate. But it can help us see that higher income inequality is not always the most relevant problem, even for strict egalitarians. Policies on immigration and free trade, for example, sometimes increase inequality within a nation, yet can make the world a better place and often decrease inequality on the planet as a whole.

International trade has drastically reduced poverty within developing nations, as evidenced by the export-led growth of China and other countries. Yet contrary to what many economists had promised, there is now good evidence that the rise of Chinese exports has held down the wages of some parts of the American middle class. At the same time, Chinese economic growth has probably raised incomes of the top 1 percent in the United States, through exports that have increased the value of companies whose shares are often held by wealthy Americans. So while Chinese growth has added to income inequality in the United States, it has also increased prosperity and income equality globally.

From a narrowly nationalist point of view, these developments may not be auspicious for the United States. But that narrow viewpoint is the main problem. We have evolved a political debate where essentially nationalistic concerns have been hiding behind the gentler cloak of egalitarianism. To clear up this confusion, one recommendation would be to preface all discussions of inequality with a reminder that global inequality has been falling and that, in this regard, the world is headed in a fundamentally better direction.

The message from groups like Occupy Wall Street has been that inequality is up and that capitalism is failing us. A more correct and nuanced message is this: Although significant economic problems remain, we have been living in equalizing times for the world — a change that has been largely for the good. That may not make for convincing sloganeering, but it’s the truth.

Yes, we might consider some useful revisions to current debates on inequality. But globally minded egalitarians should be more optimistic about recent history, realizing that capitalism and economic growth are continuing their historical roles as the greatest and most effective equalizers the world has ever known.

Carpe Diem

Who’d a-thunk it? Socialism is demoralizing, socially corrosive, and promotes individual dishonesty and cheating?

Here’s the abstract of the research paper “The (True) Legacy of Two Really Existing Economic Systems“:

By running an experiment among Germans collecting their passports or ID cards in the citizen centers of Berlin, we find that individuals with an East German family background cheat significantly more on an abstract task than those with a West German family background. The longer individuals were exposed to socialism, the more likely they were to cheat on our task. While it was recently argued that markets decay morals (Falk and Szech, 2013), we provide evidence that other political and economic regimes such as socialism might have an even more detrimental effect on individuals’ behavior.

And here’s part of the conclusion:

If socialism indeed promotes individual dishonesty, the specific features of this socio-political system that lead to this outcome remain to be determined. The East German socialist regime differed from the West German capitalist regime in several important ways. First, the system did not reward work based to merit, and made it difficult to accumulate wealth or pass anything on to one’s family. This may have resulted in a lack of meaning leading to demoralization (Ariely et al., 2008), and perhaps less concern for upholding standards of honesty. Furthermore, while the government claimed to exist in service of the people, it failed to provide functional public systems or economic security. Observing this moral hypocrisy in government may have eroded the value citizens placed on honesty. Finally, and perhaps most straightforwardly, the political and economic system pressured people to work around official laws and cheat to game the system. Over time, individuals may come to normalize these types of behaviors. Given these distinct possible influences, further research will be needed to understand which aspects of socialism have the strongest or most lasting impacts on morality.

Here’s a link to an article in The Economist about the paper “Lying Commies: The more people are exposed to socialism, the worse they behave.”

Related: My 1995 article “Why Socialism Failed.”

Carpe Diem

Crony crapitalism, NFL edition……

Reason’s Nick Gillespie in a December 2013 article “Football: A Waste of Taxpayers’ Money” asks a very good question: Why are we subsidizing such a hugely profitable sport?

It’s just not right when governments shovel tax dollars at favored companies or special interests, even when those firms are called, say, the Minnesota Vikings or the Scarlet Knights of Rutgers University. The NFL’s Vikings are lousy at scoring touchdowns – they have the worst record in the NFC North – but they’ve proven remarkably adept in shaking down Minnesotans for free money. Next year they’ll be playing ball in a brand-spanking new $975 million complex in downtown Minneapolis, more than half of whose cost is being picked up by state and local taxpayers. Over the 30-year life of the project, the public share of costs will come to $678 million. The team will pay about $13 million a year to use the stadium, but since it gets virtually all revenue from parking, food, luxury boxes, naming rights, and more, it should be able to cover that tab.

Not that the Vikings were ever hard up for money: Forbes values the franchise at nearly $800 million and the team’s principal owner, Zygi Wilf, is worth a cool $310 million. When the Minnesota legislature signed off on its stadium deal for the Vikings, the state was facing a $1.1 billion budget deficit. Priorities, priorities. And the Vikings deal isn’t the exception, it’s the rule.

Carpe Diem

More on why Amity Shlaes is dead wrong about inflation

pricesIn a recent National Review Online article (“Inflation Vacation”), Amity Shlaes complained that taking a summer vacation today is a lot more expensive than it was in 2000. She pointed to higher prices for gasoline, coffee, haircuts, movies, postage and college tuition (a topic of discussion while vacationing). These nominal price increases (none were adjusted for inflation or wages) are “discomforting” to Amity and that discomfort is summarized here:

You’re on vacation. Other people are water skiing, so you have a few hours to think about this [the fact that many nominal prices are higher than in 2000]. When you wake up from your sofa snooze, you see there is another way to look at the discomfort you’re experiencing: The price zap is an inflation zap.

Shlaes then goes from complaining that the nominal prices of three different goods (gas, coffee, stamps) and three services (haircuts, college tuition, movies) have risen in the last 14 years (no big surprise there), to buying into the fringe-crank conspiracy theory of John Williams (and his Shadow Government Statistics website) that the BLS has been manipulating its calculation of consumer price indexes to intentionally present biased, and significantly understated official measures of inflation. Both Jimmy Pethokoukis (“Why Amity Shlaes is dead wrong about inflation”) and Romesh Ponnuru “(Inflation Cranks Keep Cranking”) responded to Shlaes, and then Paul Krugman, in his typical conservative attack style, responded to both of them on his post “Understanding the Crank Epidemic.”

I think there is a general consensus (at least among Jimmy, Ramesh, Krugman and myself) that we should: a) “stop using John Williams and his ShadowStats site as source for inflation arguments” (Jimmy), b) “stop paying attention to statistical cranks” (Ramesh) and c) “stop turning to cranks peddling conspiracy theories about inflation” (Krugman). Case closed there.

Setting aside the “statistical crank” issue, I heartily agree with Jimmy P. that Amity Shlaes is “dead wrong about inflation.” Jimmy cited some macro data on the general level of recent inflation (from the BLS and MIT’s Billion Price Project) and some data on inflationary expectations from the Cleveland Fed, all showing very moderate rates of inflation, both actual and expected. A more micro analysis of specific goods and services associated with taking a vacation also fail to demonstrate conclusively any significant inflationary pressures.

Let’s do some number-crunching and see why Amity’s “inflation fretting” is unsupported by the actual evidence on some of the actual vacation-related prices in 2000 vs. 2014, once those prices have been adjusted for inflation (or wages). In addition to Amity’s examples, I’ve also included some additional price data that would suggest that the inflation-adjusted costs of many goods and services associated with taking a vacation are actually lower today, not higher, than in 2000. The table above summarizes those comparisons to accompany the discussion below.

1. Let’s start with average hourly earnings for private workers, which increased by 47.2% from $13.98 in June of 2000 to $20.58 in June 2014. Adjusted for overall price inflation of 37.7% during that period, there was an increase in real wages of 6.9% between 2000 and 2014 (calculated as [(1.472 / 1.377) – 1 = 0.069 or 6.9%]), see table above. Accounting for wages on an annual basis, the typical full-time worker today would earn about $2,500 more per year than a worker in 2000 (in today’s dollars). For a family with two-full time workers, they would have $5,000 more in income this year than in 2000, making a summer vacation more affordable now than 14 years ago.

And yet Amity tells us that: “In other words, you’re beginning to realize that maybe you don’t have it so good….. Wage growth overall is slower than it should be…”

Bottom Line: Measured by average hourly earnings adjusted for inflation, real wages have gone up by 6.9%, making the cost of a vacation today more, not less, affordable than in 2000, before even considering any specific prices.

2. Since we’re talking about taking a vacation, let’s analyze the products and services that you would use to book your hotel room – cell phone, computer, and Internet access. Adjusting for inflation, we find that the cost of using your cell phone has fallen by 46% since 2000, the cost of your laptop computer has fallen by more than 91% and the cost of your Internet access has fallen by almost 41%. The CPI for lodging at hotels and motels has fallen by 10% since 2000 in real terms, so you’re off to a pretty good start – you’ve already saved a lot of money just getting your vacation booked compared to 2000, and you haven’t even left home yet.

3. If you’re flying, you’ll save a lot of money today compared to 2000. Adjusted for inflation, the average airfare in 2000 was $434.44 according to data from Airlines for America, compared to the average price of a ticket in 2013 of $362.85 (most recent data available). Therefore, your real airfare is 16.5% lower today than in 2000, and you’ll save about $72 per person, and $286 for a family of four if you travel by air for your summer vacation.

4. If you drive for your family vacation, it is true that gasoline, adjusted for inflation, is about 64% more expensive this year than in the summer of 2000. But the average fuel economy of today’s cars at 24 miles-per-gallon is 23.7% higher than the 19.8 mpg average in 2000. Also, the cars and highways today are 27.5% safer than in 2000 measured by the number of annual highway deaths adjusted for miles traveled. Further, adjusted for inflation and quality improvements, new cars today are about 25% more affordable than cars in 2000.

5. What about food? Amity complained that coffee has increased by $3.40 to $5.20 per pound between 2000 and 2014, a 53% increase, but makes no adjustment for inflation or wages. That would be an 11% real increase in the price of coffee, but the series CPI-Coffee shows a real decrease of almost 8% and the CPI series for Coffee and Tea shows a real price decline of more than 12%. Coffee is just one price, and tells us nothing about overall food inflation. The two much broader CPI series for full service meals and limited service meals that would apply to meals while on vacation increased by 45% and 49% respectively between 2000 and 2014, which are both greater than the 37.7% increase in the CPI but about the same as the increase in nominal wages.

6. What about clothing? Adjusted for inflation, the overall, inflation-adjusted price of clothing has fallen by 28% since 2000, so you’ll save money on your summer vacation wardrobe this year compared to a vacation in 2000.

7. Amity also complained about the cost of a haircut today — $45 — compared to supposedly only $20 in 2000, a whopping increase of 125%. But the CPI for Haircuts shows a 2000-2014 increase of only 36.2%, almost exactly matching the 37.5% CPI increase during that period. And compared to the 47.2% increase in wages over that period, a haircut today is cheaper than it was in 2000, measured in the amount of time (hours) working to earn enough income to pay for a haircut.

8. Another of Amity’s “price zaps” was the 100% increase in movie ticket prices from $5 to $10 since 2000. But again, the CPI series for “Movies, Theaters and Concerts” show an increase of only 45% since 2000, just slightly above the 37.7% rate of overall consumer inflation, and slightly less than the 47.2% increase in nominal wages over this period. Further, there are lots of options today for watching movies in your hotel room, including purchasing movies through the hotel, and watching movies on your computer with DVDs or through Netflix, options that are probably much cheaper today. For example, the CPI series for “video disks and rentals” has fallen by 39% since 2000 (see table above).

9. It is true that the cost of college tuition and college textbooks, and the price of postage stamps, have all significantly increased since 2000 by more than inflation (real increases of 65.7%, 59.1% and 7.9% respectively). But those goods and services are heavily influenced by government funding and financing (student loans) in the case of college tuition and textbooks, and in the case of postage stamps, provided by government monopoly. In contrast, the CPI for “recreational books” has fallen in real terms by 8% since 2000, which helps to illustrate that when a good is provided in market setting (recreational books) the cost falls over time in real terms. Once government funding and/or financing are introduced, distortions take place that have fueled cost increases in college tuition and college textbooks far above overall consumer price inflation.

Conclusion: Where does that leave us in our comparison of a vacation today versus 2000? A lot of the main components of a vacation are cheaper today in real terms: airfare is 16.5% cheaper and hotel lodging is cheaper by 10.4%. The electronic devices (cell phones and laptops) associated with planning a vacation and their costs of operation (monthly cellphone plans and Internet access) are all much cheaper today, as are the costs of buying or renting movie DVDs or streaming live movies. Food prices have increased slightly more than overall consumer inflation since 2000, but about the same as nominal wages. On the other hand, clothing is much cheaper today by 28% adjusted for inflation compared to 2000, and vacation reading materials are cheaper today by 8% (recreational books). The price of haircuts is about the same, and movie tickets are more expensive than in 2000. Gasoline is more expensive than in 2000, but cars today are cheaper, more fuel efficient, and more durable, reliable and safer. College tuition and postage stamps are both more expensive today, but that’s largely because of a government monopoly for first-class mail, and government funding and financing of higher education.

Bottom Line: Comparing nominal prices in 2000 to prices today tells us nothing until we compare those price increases to overall inflation or wages. Once we make those adjustments, and account for all of the goods and services associated with vacation travel, I would say that taking a vacation today is probably cheaper than in 2000 based on the “micro” analysis above. And I would have to agree with Jimmy P’s conclusion from his “macro” analysis that Amity Shlaes is dead wrong about inflation in general and “vacation inflation” in particular. Finally, we should all ignore statistical cranks and conspiracy theories about biased government reporting of inflation.

Carpe Diem

Quotation of the day on exposing the immorality of protectionism….

… is from George Mason economist and Cafe Hayek blogger Don Boudreaux in response to the recent WSJ editorial about steel tariffs and the “protectionist racket known as antidumping enforcement”:

1. Protectionism is government intimidation unleashed against consumers to oblige them to buy products that they prefer not to buy.

2. Protectionism is force that enriches the politically powerful at the expense of the politically impotent.

3. Protectionism is business people capturing rents from receiving special favors from the state rather than earning profits from giving good service to the public.

4. Protectionism is the myth that money belongs not to consumers who earned it peacefully but to suppliers who steal it coercively.

5. Protectionism is the corrupting lie that absurdly and insult​ingly insists that mass flourishing results from monopoly and dearth rather than from competition and abundance.