On Its Last Legs?

The blurb explains the title:

Joe Biden’s new tariffs on Chinese goods mark the decisive rejection of an economic orthodoxy that dominated American policy making for nearly half a century.

Rogé Karma, “Reaganomics Is on Its Last Legs,” The Atlantic, May 18, 2024.

The article explains the bipartisanship of the new economic policy:

On Tuesday, President Joe Biden announced plans to impose steep new tariffs on certain products made in China, including a 100 percent tariff on electric cars. With that, he escalated a policy begun during the Trump administration, and marked the decisive rejection of an economic orthodoxy that had dominated American policy making for nearly half a century. The leaders of both major parties have now turned away from unfettered free trade, a fact that would have been unimaginable less than a decade ago.

And that bipartisan nature is made exceedingly clear:

A president announcing a new policy does not mean that the political consensus has shifted. The proof that we are living in a new era comes instead from the reaction in Washington. Congressional Democrats, many of whom vocally opposed Trump’s tariffs, have been almost universally supportive of the increases, while Republicans have been largely silent about them. Rather than attacking the tariffs, Trump claimed credit for them, telling a crowd in New Jersey that “Biden finally listened to me,” and declaring that he, Trump, would raise tariffs to 200 percent. Most of the criticism from either side of the aisle has come from those arguing that Biden either took too long to raise tariffs or didn’t go far enough.

Mr. Karma explains how this trend is not insignificant, not a blip in the winds of policy change:

The shift on trade is part of a broader realignment that Biden’s national security adviser, Jake Sullivan, has aspirationally called the “new Washington consensus.” What unites Biden’s tariffs with the other core elements of his agenda, including massive investments in manufacturing and increased antitrust enforcement, is the notion that the American government should no longer passively defer to market forces; instead, it should shape markets to achieve politically and socially beneficial goals. This view has taken hold most thoroughly among Democrats, but it is making inroads among Republicans too — especially when it comes to trade.

But this perspective, of how politicians “passively” “deferred” to “market forces,” suggests that active opposition to market forces makes any kind of sense. Truth is, as economist Eugen von Böhm-​Bawerk explained, “there is one … thing that not even the most imposing dictate of power will accomplish: It can never effect anything in contradiction to the economic laws of value, price, and distribution; it must always be in conformity with these; it cannot invalidate them; it can merely confirm and fulfill them.” The consequences of policies that seek to use State regulatory powers to guide market outcomes tend not to conform to politicians’ and regulators’ expectations, for at no point do they magically alter the laws of supply and demand.