Adam Liptak tells us that the Supreme Court is pondering whether to hear a case from Ramsey County, Minnesota, which confiscates money from people it arrests. That's what happened to Corey Statham, who was arrested and charged with disorderly conduct, and then released:

But the county kept $25 of Mr. Statham’s money as a “booking fee.” It returned the remaining $21 on a debit card subject to an array of fees. In the end, it cost Mr. Statham $7.25 to withdraw what was left of his money.

....Kentucky bills people held in its jails for the costs of incarcerating them, even if all charges are later dismissed. In Colorado, five towns raise more than 30 percent of their revenue from traffic tickets and fines. In Ferguson, Mo., “city officials have consistently set maximizing revenue as the priority for Ferguson’s law enforcement activity,” a Justice Department report found last year.

....Through his lawyers, Mr. Statham declined a request for an interview. He lost in the lower courts, which said his right to due process had not been violated by the $25 booking charge or the debit card fees, which were both, the trial judge said, “relatively modest.”

Lovely. It's OK to confiscate money as long as you don't confiscate too much. Unless, of course, you're engaged in civil asset forfeiture, in which case the sky's the limit. All you have to do is attend one of the many classes that teach your police officers how best to steal people's money under the pretense that they "just know" it's drug money.

I continue to be gobsmacked by all of this. I've heard all the arguments about due process and civil vs. criminal and so forth, and not a single word of it strikes me as anything but an obvious sham. And yet courts—all the way to the Supreme Court—and judicial agencies—all the way to the Department of Justice—accept them without blinking. It's the kind of thing that makes me wonder if I'm stuck in some kind of Kafka-based virtual reality. How can something so obviously wrong be approved with a shrug by so many people?

Matt Yglesias tweeted yesterday about mortgage interest rates going up after the election, and that got me curious about just how quickly they spiked upward after we all learned that Donald Trump would be our next president. The chart on the right shows the answer: pretty darn quickly.

On November 8, the average 30-year fixed mortgage was available at a rate of 3.53 percent. Within two days it had gone up 21 basis points, and within a week it had gone up 43 basis points. Adjustable mortgages spiked upward too, though not as dramatically, and both rates continued to drift upward until December 14. Then they spiked upward again thanks to the Fed's decision to increase interest rates.

So what does this mean for your ordinary working-class joe who voted for Trump? Well, for a 30-year fixed mortgage on a $200,000 loan, the monthly payment has increased from about $900 to $950. That's an extra $600 per year.

Generally speaking, this spike was due to the fact that everyone panicked after Trump won, causing treasury bond yields to jump 35 basis points in a week. More specifically, however, is it due to China selling US treasuries in greater quantities than usual? Maybe! But whatever the cause, if you waited until after the election to buy a house, you're paying a pretty stiff Trump penalty.

Happy Boxing Day!

We humans got all sorts of books, electronic devices, food items, and other doodads for Christmas. As usual, though, the cats made out much better than us, having a grand time with all the packing ephemera. Later they climbed a few trees and looked longingly at some hummingbirds who were perfectly safe, but seriously annoyed at all the feline prowling near their feeder. Life in the wild is pretty tough these days.


The star, who launched his career with Wham! in the 1980s and later continued his success as a solo performer, is said to have "passed away peacefully at home".

Thames Valley Police said South Central Ambulance Service attended a property in Goring in Oxfordshire at 13:42 GMT.

Police say there were no suspicious circumstances.

Rest in peace.

Here's the latest version of the Arctic meltdown, this time in cheerful Christmas colors:

For a while there, it looked like maybe things were heading back down to normal, but then a few weeks ago temps started spiking again. It's now more than 30 degrees warmer than normal at the North Pole.

Data since 1958 is here. If you click through the years, you'll see that the previous record was somewhere around 15 degrees above normal for maybe a week or two. Current Arctic temps are not only higher than they've ever been, but they've lasted for about four months so far. I am pretty sure this means Santa's workshop has long since fallen through the thin ice and disappeared forever into the inky depths of the Arctic waters. Sorry about that, kids.

So let's suppose that Donald Trump really does impose a 10 or 15 percent tariff on all goods entering the United States. Or maybe only Chinese and Mexican goods.1 What would happen? Who would be the winners and losers?

The simplest way to think about this is to remember what happens when tariffs are reduced. Textbook economics says that overall GDP will grow, prices will go down, but certain groups of people will be disproportionately harmed. So if tariffs are increased, the opposite should happen. Economic growth would suffer, prices would go up for most people, but certain groups would benefit. It's not always clear what those groups are, but generally speaking workers in the sectors most vulnerable to foreign competition would probably benefit: textiles, clothes, shoes, rubber products, computer assembly, and so forth.

That's the theory, anyway. The reality is sometimes different. Free traders, for example, often point to the example of automobile tires. In 2009, President Obama slapped a huge tariff on Chinese tires in order to protect the US tire industry. The chart on the right shows what happened: other countries rushed to fill the void and tire imports skyrocketed. The usual estimate is that about 1,200 jobs were saved at a cost to US consumers of $1.1 billion. That's $900,000 per job, which is obviously a bad deal, but it's also a diffuse deal. Unions and tire workers were happy regardless of how things turned out, while consumers probably barely noticed that they were paying an extra dollar per tire.

If Trump enacted a tariff only on China, this is roughly what would happen: some of China's business would move to other countries, and net US imports would stay about the same. China would lose, other countries would gain, and in America it would be a wash.

But what if Trump enacted a 10-15 percent tariff across the board on every country? Economically, that would act like a sales tax on foreign goods. Prices would go up, which would allow American companies to increase production in sectors where a 10-15 percent advantage was enough to make them competitive.2 The exact way this would shake out depends on the elasticity of demand for various goods, but in the end American workers in certain sectors would almost certainly make gains, while all American consumers would pay higher prices. Is this tradeoff worth it? I'd say no, but plenty of people would disagree.

That's the 100-thousand-foot view, anyway. In real life, other countries would almost certainly retaliate—maybe via tariffs of their own, maybe in other ways. Boeing, for example, usually suffers when the Chinese get annoyed with us, because Chinese airlines develop a sudden fondness for Airbus planes. Or the authorities in Beijing could make life harder for American companies doing business in China. Or they could get nasty in any of a dozen other ways. Ditto for the rest of the world, which would appeal to the WTO at best and retaliate with their own trade barriers at worst.

And no matter what the rest of the world did, American companies would face headaches for years as they tried to rework their supply chains, which are global for nearly every product you can think of. American products use lots of parts made overseas, and lots of overseas products use parts (and services) from America. For example, a San Francisco Fed paper estimates that 55 percent of the value of Chinese goods is actually US content. To make this concrete, think about iPhones: If China ends up making fewer iPhones, that also means fewer jobs for the Apple sales force and lower sales for the plant in Texas that makes iPhone processors. The whole thing is a mess—and it's especially a mess if companies have no assurance about how long the tariffs will stay around or what's around the corner from the rest of the world as they figure out ways to get back at us.

The bottom line is this:

  • The impact on workers in certain sectors would be anything from negative (in the case of a big trade war) to fairly positive (if the tariffs worked and the rest of the world decided to ride it out).
  • Prices would go up for everyone. And since low-income workers buy more goods as a share of their income, higher prices would hit them the hardest.
  • Economic growth would almost certainly slow down.

Most likely, Trump's tariffs would be a bad deal for nearly everyone, and maybe—maybe—a good deal for a few workers and CEOs in the sectors that have been hardest hit by foreign competition.

More generally, you can't really talk about "trade" in the abstract. Basically, there's China and there's everyone else. China is our big problem, but the trouble with retaliating against China is that it's too late. We have lost a lot of jobs to them, but the damage was mostly done years ago. By the time Obama took office there was little he could do, and there's even less that Trump can do now. It's also true that China was a bad actor on the world economic stage for a long time. But again, their worst practices are mostly in the past. Their export subsidies are fairly low these days, and their currency manipulation is mostly to push the yuan up, not down. This benefits America, not China.

There is one best-case scenario, though: Trump threatens the Chinese and ends up getting some concessions from them without ever enacting any tariffs. Is that likely? I guess that depends on how good a negotiator you think Trump is. Unfortunately, his record in the business world doesn't give much cause for optimism on that front.

1Yes, he could do it. Details here.

2For example, if China makes clocks for $2 and America makes clocks for $3, a 15 percent tariff wouldn't do anything for American clockmakers. Even at a Chinese price of $2.30, Americans still couldn't compete. However, consumers would end up paying $2.30 for clocks instead of $2.

On the other hand, if China makes cars for $9,000 and America makes cars for $10,000, a tariff could have a big effect. Chinese cars would now cost $10,350, and that means consumers would buy a lot more American cars. Unless, of course, they really prefer the Chinese cars even at a higher price. It all depends, you see.

As you can see, Hopper is getting ready for Christmas. She has spurned this particular cat bed since the day we bought it, but as soon as we put it under the tree she claimed it as her own.

Does our tree look a little sparse? I assure you we have plenty of ornaments higher up, but we decided to keep the bottom foot of the tree free of distraction. I assume this needs no explanation.

To celebrate the Grinch version of Christmas, here's my 2016 list of stuff I've gotten tired of over the past year. I'm not suggesting that nobody should use any of these memes in the future. Go ahead! Who cares whether I'm annoyed? Nor are they the the worst cliches or most overused examples in the world. They're just things I've grown weary of. They are in no particular order. Enjoy!

  1. Side-eye tweets about "takes." This is mostly annoying coming from people who all write takes themselves. Stop the self-hatred! Some people are makers (i.e. reporters) and some people are takers. You should revel in your role in the journalistic ecosystem.
  2. The madman theory. Yes, yes, we all know that Richard Nixon tried to make Russia and China think he was a madman who needed to be treated with kid gloves. This strategy lasted, what? A year? And it didn't work. We've also heard it "explained" a thousand times by analogy to two cars speeding toward each other on a one-lane road, and one guy throws away his steering wheel. We get it.
  3. Correlation is not causation. If you're a serious researcher making a serious point about a serious study, you're fine. However, this usage is vanishingly rare. Most often it's tossed off by someone who thinks it's a brilliant riposte to anyone who demonstrates a correlation. Knock it off. It's not nearly as smart as you think it is.
  4. Container shipping revolutionized world trade. This is a true fact. I know it's true because people keep writing articles about it, as if it's some kind of revelation. Maybe it was 20 years ago. Today, not so much.
  5. Van Halen's brown M&Ms. If you don't know what this is, Google it. As for the rest of you, please find some other example to make whatever point you're trying to make.
  6. _____ is wealthier than the bottom 50 percent of the world. Look, the wealth of the bottom 50 percent of the world is zero. Everything is wealthier than the bottom 50 percent of the world. Headlines that use this format are nowhere near as amazeballs as many people appear to think they are.
  7. Ironic criticism of the White House Correspondents' Dinner from people who go to it. I know: you think this shows that you're a regular joe who's in on the joke. It doesn't. It just shows that you're afraid of people thinking you're part of the DC press corps.
  8. ____'s Terrible, Horrible, No Good, Very Bad ____. This is not the most overused cliche in the world, but it might be the laziest. You don't even have to think of some kind of clever construction. You just fill in the blanks and call it a day. Let's all give it a rest.
  9. Bloggers who complain about the press covering Donald Trump's tweets even though they obsess over them too. These guys are the worst.

Oh man:

Sam Brownback, the Kansas governor whose tax cuts brought him political turmoil, recurring budget holes and sparse evidence of economic success, has a message for President-elect Donald Trump: Do what I did.

....“My critics, which are many, they only want to look at the budget,” Mr. Brownback said in an interview. “They won’t look with any depth or detail at the impact on small-business growth or private-sector job growth. That’s the target, that’s what we’re after.”

....Mr. Brownback said a number of states face budget problems and said Kansas has “never had more private-sector jobs.”

It's technically true that Kansas has "never had more private-sector jobs." What that really means, however, is that despite five years of population growth and economic expansion under Sam Brownback, Kansas has only barely passed its previous peak from 2008—while the rest of the country passed that mark long ago. The chart on the right shows total Kansas private-sector employment vs. US private-sector employment starting in January 2011, when Brownback took office. His tax-cutting policies didn't work from the start, and the longer he's stayed in office the worse they've done. Kansas is the poster child for the failure of betting on tax cuts for the rich to supercharge the economy.

If you want a more sophisticated analysis that takes into account all the excuses people will toss at you (drought, airplane manufacturing, etc. etc.), check out Menzie Chinn. His latest is here, and you can search Econbrowser for all the gory details you want. Spoiler alert: None of them change the picture on the right.