Monthly Archives: September 2025

Employee Speech and Its Consequences

18 Thursday Sep 2025

Posted by in Censorship, Free Speech

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I just can’t express any sympathy for those fired from their jobs for publicly endorsing or “celebrating” the assassination of Charlie Kirk. Regardless of how you felt about Charlie Kirk’s words, he was a nonviolent public figure who did everything he could to engage peacefully with those who disagreed with his views. Praising his assassination is morally repugnant.

The fairness and even the legality of these dismissals has been called into question, however. As Eugene Volokh notes, the First Amendment offers protection “against criminal punishment, civil liability” for all speech unless it “is intended to and likely to cause imminent illegal conduct”. It does not protect the speaker from other consequences, however, such as continued employment or social ostracism. It goes without saying that this applies to both sides of any debate.

But job dismissals for expressing controversial opinions should not extend beyond issues likely to threaten the mission of the employing organization, including reputation and the well being of clients and other employees. Even more importantly, prosecution under so-called “hate speech” laws (a flawed construct) should not extend outside the bounds of the First Amendment, and should not be prosecuted selectively on political grounds.

One prominent action with which I’m not comfortable is the “indefinite” cancellation of Jimmy Kimmel, who (like others on the Left) thought it would be clever to make the absurd claim, during his late-night monologue, that Kirk’s assassin was one of the MAGA tribe. Kimmel did not “celebrate” the murder per se, but his statement was enough to get his show pulled, for now. The cancellation was lauded by the Right as a response to the market. That’s plausible: Kimmel’s pronouncement might have damaged ABC’s brand, though it didn’t have far to drop. The Trump Administration seems to have employed some strong-arm tactics in this episode, however, which is awful. In any case, I’d rather keep Kimmel out there making a fool of himself.

Of course, private employers can generally employ whom they want and can often cite agreed-upon codes of conduct as justification for dismissals, if necessary. Who wants an employee announcing to the world that he or she endorses the murder of someone with whom they happen to disagree on public policy or expressions of faith? Or who wants an employee openly stating such a monstrous opinion in the workplace? It’s simply bad business to risk offense to customers, sowing discord in the workplace, or affiliating in any way with an individual willing to demonstrate such depraved values.

Things are a little different for public employees. In his post, Volokh outlined general legal conditions under which a public employee can be disciplined. These are (the full list is a quote):

  1. the speech is said by the employee as part of the employee’s job duties, Garcetti v. Ceballos (2006), or
  2. the speech is not on a matter of public concern, Connick v. Myers (1983), or
  3. the damage caused by the speech to the efficiency of the government agency’s operation outweighs the value of the speech to the employee and the public, Pickering v. Bd. of Ed. (1968).

As Volokh says, strictly speaking, these conditions do not establish categorical grounds for dismissing a public employee for praising violence. He cites case law to support that position. But the third condition listed is critical in many cases. On that point, he notes that the case in question involved a private conversation with the speaker’s co-worker/boyfriend. So that case hardly seems dispositive.

Volokh goes on to say that #3 above, or really the Pickering case, establishes a kind of heckler’s veto for public employers. That is, it:

“… often allows government to fire employees because their speech sufficiently offends coworkers or members of the public. …

“This conclusion by lower courts applying Pickering might, I think, stem from the judgment that employees are hired to do a particular job cost-effectively for the government: If their speech so offends others (especially clients or coworkers) that keeping the employees on means more cost for the government than benefit, the government needn’t continue to pay them for what has proved to be a bad bargain.“

Whether it involves someone in the public or the private sector, concerns about endorsing the murder of an ideological opponent are particularly acute when issued by those in jobs requiring a high level of trust. That covers a broad swath of workers, but especially those in health care, education, and law enforcement. Can you trust a nurse, a surgeon, or any other caregiver who would endorse murder as a proper response to political or ideological differences? Are you willing to allow your child to be instructed by such an individual at any level? For that matter, would you trust a news anchor who spouted that kind of rhetoric?

It’s certainly doesn’t present as “normal” to espouse or praise murder and other violent acts, regardless of ideological passion. In fact, most people would fairly question the stability of anyone cheerleading for murder and the risk they might present to society. Words are cheap, but it might well signal an elevated propensity for acts of violent retaliation for perceived wrongs.

The question of trust really permeates our interactions with the whole of society, so the kind of behavior we’ve witnessed from this quarter is threatening. Will my waitress, overhearing a conversation, befoul or poison the food she serves me? Will my ride share driver deliver me to a torture chamber? Will a neighborhood contact attempt to exact some kind of retribution? It’s not quite there yet, but the encroachment is real. This should be more salient to anyone with an accessible social media profile who wishes to express an honest opinion, particularly on a college campus.

A brief word about some of the Charlie Kirk quotes that have made the rounds. They are often excerpted and divorced from the full context of the argument he was attempting to make. Julie Borowsky on X provides some direct, full quotes of Kirk on several important topics. I happen to think he made valid (if not fully developed) points about the value of the Second Amendment, the divisiveness of DEI, overuse of the word “empathy”, and the downsides of Civil Rights Act. At the same time, I am certain I’d disagree with other positions Kirk held, like his support for tariffs. Still, they were all debating points on policy (or matters of faith), and they did not qualify as “hate speech”, which is a subjective notion and highly resistant to consensus. In any case, his comments could never have justified the insane reaction of Kirk’s assassin or those who cheered his murder.

Tariff Challenges at the High Court

12 Friday Sep 2025

Posted by in Executive Authority, Tariffs

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The world doesn’t ordinarily revolve around tariffs, but so much has happened to make tariffs into an economic and political linchpin of the moment. Donald Trump put them in the spotlight, of course, and while he’s still seeing roses, things won’t turn out entirely the way he hopes. At the tariff levels he’s instituted, this shouldn’t be too surprising.

While tariff revenue is helping to shave the federal budget deficit, the tax falls largely on the backs of American consumers and businesses with all the attending distortions that entails. Sadly, the extra revenue also seems to have offered a handy excuse to put spending cuts on the back burner. Tariffs and tariff uncertainty have businesses attempting to compromise between reduced margins and price hikes. Thinning margins due to tariffs have played a role in the weak employment numbers we’ve seen over the past few months. And tariffs, at least until now, have quite rightly reinforced the Federal Reserve’s cautious stance toward easing policy. However, the weak labor market has likely convinced the Fed to cut its short-term interest rate target, despite inflation stubbornly remaining well above the Fed’s 2% objective. That upward price pressure will remain.

Now, the legal battle over Trump’s tariff authority is about to reach a climax. That’s what I’ll focus on here. The Supreme Court has agreed to fast track the challenge to the President’s discretion to impose retaliatory tariffs unilaterally. There are two cases at hand: V.O.S. Selections, Inc. v. Trump, and Learning Resources, Inc., et al. v. Donald Trump et al. In both cases, small business plaintiffs contend that Trump’s invocation of the International Emergency Economic Powers Act (IEEPA) is unwarranted, and that “most” of the tariff actions taken by Trump have usurped Congress’ power of the purse under Article I of the Constitution. Here’s Ilya Somin, who is a Volokh Conspiracy regular and one of the attorneys representing the plaintiffs:

“… IEEPA doesn’t even mention tariffs and has never previously been used to impose them, that there is no ‘unusual and extraordinary threat’ of the kind required to invoke IEEPA, the major questions doctrine, the constitutional nondelegation doctrine, and more.“

This isn’t the first time a U.S. president has imposed tariffs unilaterally, but it is easily the most drastic such action. Historically, nearly all tariffs were levied by acts of Congress. Prior to Trump II, perhaps the broadest tariff imposed by a President was Richard Nixon’s brief 10% surcharge on all imports, but that was lifted quickly. Presidents Johnson and Obama imposed some selective tariffs. All of these episodes seem piddling compared to Trump’s tariffs, which are both sweeping and in many cases painfully selective.

Eric Boehm notes that when it comes to major constitutional questions, the Court has taken the position that

“… executive power should be construed narrowly, not broadly …. Rather than tying itself into knots to affirm nearly unlimited executive powers over commerce, the Supreme Court should tell the Trump administration to get permission from Congress before imposing new tariffs.“

I believe that will be the general shape of the outcome here. Maybe there’s a way for the Court to allow the tariffs to stand until Congress decides to “man up”, acting one way or the other. SCOTUS would probably like to do just that! Or maybe the Court could stay the lower court’s injunction until the case is heard by the Court in full on the regular docket, or until Congress acts.

There’s a decent chance, however, that Trump’s tariffs will be struck down, leaving it up to tariff supporters in Congress to lay down statutory rules rather than put up with the impulsive craziness we’ve witnessed thus far. If the Court lets the tariffs stand, it leaves the door open for new tests on the limits of executive discretion. Here is Greg Ip at the link:

“There would also be no end to uncertainty. ‘Unlike most other tariff authorities, these tariffs are not enshrined in statute, there’s no process to change them, and they can change very rapidly, in a day, without much notice, as we’ve seen,’ said Greta Peisch, a trade attorney at Wiley Rein and former general counsel for the U.S. trade representative.“

We’ve already seen strong hints that the Administration would like to force businesses to eat the cost of the tariffs rather than pass them along to consumers in higher prices. There hasn’t been any formal action of this kind by the Administration, at least not yet. Still, one can hardly blame businesses who might perceive an implicit threat if they fail to comply. That kind of bullying represents an a massive abuse of power. The Court could do everyone a big favor by clarifying that the authority to impose tariffs rests with Congress.

Trump’s New Corporatist Plunder Will Cost U.S.

05 Friday Sep 2025

Posted by in Central Planning, Protectionism, Socialism

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Since his inauguration, Donald Trump has been busy finding ways for the government to extort payments and ownership shares from private companies. This has taken a variety of forms. Tad DeHaven summarizes the major pieces of booty extracted thus far in the following bullet points (skipping the quote marks here):

  • June 13: Trump issues an executive order allowing the Nippon Steel-US Steel deal contingent on giving the government a “golden share” that enables the president to exert extensive control over US Steel’s operations.
  • July 10: The Department of Defense (DoD) unveils a multi-part package with convertible preferred stock, warrants, and loan guarantees, making it the top shareholder of rare earth metals producer MP Materials.
  • July 23: The White House claims an agreement with Japan to reduce the president’s so-called reciprocal tariff rate on Japanese imports comes with a $550 billion Japanese “investment fund” that Trump will control.
  • July 31: Trump claims an agreement with South Korea to reduce the so-called reciprocal tariff on South Korean imports comes with a $350 billion South Korean-financed investment in projects “owned and controlled by the United States” that he will select.
  • August 11: The White House confirms an “unprecedented” deal with Nvidia and AMD that allows them to sell particular chips to China in exchange for 15 percent of the sales.
  • August 12: In a Fox Business interview, Bessent points to the alleged investments from Japan, South Korea, and the EU “to some extent” and says, “Other countries, in essence, are providing us with a sovereign wealth fund.”
  • August 22: Fifteen days after calling for Intel CEO Lip-Bu Tan to resign, Trump announces that the US will take a 10 percent equity stake in Intel using the CHIPS Act and DoD funds, becoming Intel’s largest single shareholder.

Each of these “deals” has a slightly different back story, but national security is a common theme. And Trump says they’ll all make America great again. They are touted as a way for American taxpayers to benefit from the investment he claims his policies are attracting to the U.S. However, all of these are ill-advised for several reasons, some of which are common to all. That includes the extortionary nature of each and every one of them.

Short Background On “Deals”

The June 13 deal (Nippon/US Steel), the July 10 deal (MP Materials), and the August 22 deal (Intel) all involve U.S. government equity stakes in private companies. The August 11 deal (NVIDIA/AMD) diverts a stream of private revenue to the government. The July 23 and July 31 deals (Japan and South Korea) both involve “investment funds” that Trump will control to one extent or another.

The August 12 entry adds “expected” EU investments with some qualification, but that bullet quotes Treasury Secretary Bessent referring to these investments as part of a sovereign wealth fund (SWF). Secretary of Commerce Lutnick now denies that an SWF will exist. My objections might be tempered slightly (but only slightly) by an SWF because it would probably need to place constraints on an Administation’s control. That might give you a hint as to why Lutnick is now downplaying the creation of an SWF.

I object to the Nippon/US Steel “deal” in part (and only in part) because it was extortion on its face. There is no valid anti-trust argument against the deal (US Steel is the nation’s third largest steelmaker and is broke), and the national security concerns that were voiced (Japan! for one thing) were completely bogus. Even worse, the “Golden Share” would give the federal government authority, if it chose to exercise it, over a variety of the company’s decisions.

The Intel “deal” is another highly questionable transaction. Intel was to receive $11 billion under the CHIPS Act, a fine example of corporate welfare, as Veronique de Rugy once described the law. However, Intel was to receive its grants only if it stood up four fabrication facilities. But it did not. Now, instead of demanding reimbursement of amounts already paid, the government offered to pay the remainder in exchange for a 9.9% stake in the company. And there is no apparent requirement that Intel meet the original committment! This could turn out a bust!

The MP Materials transaction with the Department of Defense has also been rationalized on national security grounds. This excuse comes a little closer to passing the smell test, but the equity stake is objectionable for other reasons (to follow).

The Nvidia/AMD deal has been justified as compensation for allowing the companies to sell chips to China, which is competing with the U.S. to lead the world in AI development. This is another form of selective treatment, here applied to an export license. The chips in question do not have the same advanced specifications as those sold by the companies in the U.S., but let’s not let that get in the way of a revenue opportunity.

While nothing about TikTok appears on the list above, I fear that a resolution of its operational status in the U.S. presents another opportunity for extortion by the Trump Administration. I’m sure there will be many other cases.

Root Cause: Protectionism

The so-called investment funds described in the timeline above are nearly all the result of trade terms negotiated by a dominant and belligerent trading partner: the U.S. My objections to tariffs are one thing, but here we are extorting investment pledges for reductions in the taxes we’ll impose on our own citizens! Additionally, the belief that these investments will somehow prevent a general withdrawal of foreign investment in the U.S. is misguided. In fact, a smaller trade deficit dictates less foreign investment. The difference here is that the government will wrest ownership control over a greater share of less foreign investment.

Trump the Socialist?

Needless to say, I don’t favor government ownership of the means of production. That’s socialism, but do matters of national security offer a rationale for public ownership? For example, rare earth minerals are important to national defense. Therefore, it’s said that we must ensure a domestic supply of those minerals. I’m not convinced that’s true, but in any case, fat defense contracts should create fat profit opportunities in mining rare earths (enter MP Materials). None of that means public ownership is necessary or a good idea.

All of these federal investments are construed, to one extent or another, as matters of national security, but that argument for market intervention is much too malleable. Must we ensure a domestic supply of semiconductors for national security reasons? And public ownership? Is the same true of steel? Is the same true of our “manufacturing security”? It can go on and on. The next thing you know, someone will argue that grocery stores should be owned by the government in the name of “food security”! Oh, wait…

Trump the Central Planner

Government ownership takes the notion of industrial planning a huge step beyond the usual conception of that term. Ordinarily, when government takes the role of encouraging or discouraging activity in particular industries or technologies, it attempts to select winners and losers. The very idea presumes that the market is not allocating resources in an optimal way, as if the government is in any position to gainsay the decisions of private market participants who have skin in the game. This is a foolhardy position with predictably negative consequences. (For some examples, see the first, second, and fourth articles linked here by Don Boudreaux.) The fundamental flaw in central planning always comes down to the inability of planners to collect, process, and act on the information that the market handles with marvelous efficiency.

When government invests taxpayer funds in exchange for ownership positions in private concerns, the potential levers of control are multiplied. One danger is that political guidance will replace normal market incentives. And as de Rugy points out, the government’s potential role as a regulator creates a clear conflict of interest. In a strong sense, a government ownership stake is worse for private owners than a mere dilution of their interests. It looms as a possible taking, as private owners and managers surrender to creeping government extortion.

Financial Malfeasance

In addition to the objections above, I maintain that these investments represent poor stewardship of public funds. The U.S. public debt currently stands at $37 trillion with an entitlement disaster still to come. In fact, according to one estimate, the federal government’s total unfunded obligations amount to additional $121 trillion! Putting aside the extortion we’re witnessing, any spare dollar should be put toward retiring debt, rather than allowing its upward progression.

As I’ve noted before, paying off a dollar of debt entails a risk-free “return” in the form of interest cost avoidance, let’s say 3.5% for the sake of argument. If instead the dollar is “invested” in risk assets by the government, the interest cost is still incurred. To earn a net return as high as the that foregone from interest avoidance, the government must consistently earn at least 7% on its invested dollar. But of course that return is not risk-free!

A continuing failure to pay down the public debt will ultimately poison the debt market’s assessment of the government’s will to stay within its long-run budget constraint. That would ultimately manifest in an inflation, shrinking the real value of the public debt even as it undermines the living standards of many Americans.

One final thought: Though few MAGA enthusiasts would admit it even if they understood, we’re witnessing a bridging of two ends of the idealogical “horseshoe”. Right-wing populism and protectionism meet the left-wing ideal of central planning and public ownership. There is a name for this particular form of corporatist state, and it is fascism.