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No Predictions, Just Clues

Dave Davis Commentary, Policy, Uncategorized , , , ,

As I alluded to in my last post, I was optimistic a year ago. Wrong on a lot, but I had some idea of how things might go. Right now, I have to admit, I’m clueless. The Ukraine War still rages. We’re bombing boats on the high seas and suspected terrorist sites in Nigeria. Not exactly peace on earth.

Inflation is still uncomfortably high. The national debt gets scarier by the minute. Employment is dicey, and manufacturing jobs are falling. Consumer sentiment is weak:

Yet the stock market keeps hitting new highs, and the economy is growing. What gives? Darned if I know, given today’s crosscurrents. I’ll share the clues I’m looking for that clarify the situation.

The first, expected early in 2026, is the Supreme Court’s ruling on the executive branch’s tariff powers. So many of Trump’s second-term actions depend on his ability to slap tariffs on anyone at will; any limits will change the face of his administration. Without knowing what restrictions the court will put on the executive, it’s hard to plan.

If the court narrowly decides that the law underlying the tariffs fails to cover them, but no further, the administration can invoke another law and reimpose the tariffs. Those who are negatively affected will sue again, and we’re back to square one, confused. Previously, I complained that the court was taking way too much time to decide a fundamental constitutional question: Does the first article of the Constitution mean what it clearly states, only Congress has the power to levy tariffs?

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A Tale Of Two Assessments

Dave Davis Commentary, Policy, Uncategorized , , , ,

On foreign policy and national security, we were recently treated to two assessments that provide guidance on the underlying foundations of the administration’s policy and American attitudes in these areas. The National Security Strategy(NSS) was issued in November 2025 by the Trump administration. At the recent gathering of many of the country’s best minds on foreign policy at the Ronald Reagan Presidential Library, the Reagan National Defense Survey was widely discussed.

Karl Rove, in the Wall Street Journal, points out that many of the government’s positions are in stark opposition to the attitudes of the American Public.  For instance, our policy towards Europe. In Ukraine, the Reagans Survey found, “A strong majority (62%) want Ukraine to prevail in its war with Russia, and 64% support sending U.S. weapons, up  9 points from last year, with bipartisan gains (59% of Republicans, 75% of Democrats).”  “Favorability toward NATO has reached its highest level ever at 68%, with strong bipartisan support for Article V commitments.”

The NSS says, “as a result of Russia’s war in Ukraine, European relations with Russia are now deeply attenuated, and many Europeans regard Russia as an existential threat.” The American public agrees that Russia is a threat. We want Ukraine to prevail.

Reading both, you get a sense that Americans still want to stand by our friends, especially those who share our values. On the other hand, the administration’s NSS takes a harder line with our longtime friends and allies than with Russia and China. One can’t help but wonder if down the road we might find ourselves without any friends.

We’ve seen Japan and South Korea hammered and forced to make U.S. investment commitments while facing higher tariffs. Our friendly neighbor, Canada, has incurred Trump’s ire, even though he updated the NAFTA trade treaty with Mexico and Canada in his first term.

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Ballroom Or Royal Court

Dave Davis Commentary, Policy, Uncategorized , , , ,

While we’re waiting for some possibly momentous news, such as the Israeli Defence Force finally finishing off Hamas in Gaza, a Russia-Ukraine ceasefire, and a court ruling on Trump’s Tariffs, it might be a good time to reflect on some rules for leading to better government. A few posts ago, I featured an observation of the poorest performing nations, which were the ones where the state allocated resources and selected winners and losers rather than allowing the market to do the job.

What is the purpose of government other than providing the framework for its citizens to thrive? This structure must begin with the protection of body and property from arbitrary loss. Whether it’s an invader, thieves, or the government itself, you and your property are safe from capricious forces.

One of our great blessings is inheriting the English common law and the principles of representative government. We codified and expanded on these principles. An American citizen can’t be deprived of freedom or property without due process, as enshrined in our Constitution and its amendments, especially the first ten. Rather than a supreme leader doling out favors either directly or through subordinates, people should interact without government interference as much as possible.

These freedoms resulted in heretofore unheard-of economic growth, first in the British Isles, but followed closely by the young United States. The closer other nations emulated these two, the more their people benefited.

If you lack the basics of food, clothing, and shelter, not much else matters. In countries that provide a framework where people are free to choose not only the basics but also much more. (“More” in the sense of my series”The Long Journey to More”) The nations where rulers direct the economy struggle with even the essentials.

Marxists and other progressives claim that the expertise of an elite class can lead us to the promised land. The “best and the brightest,” rather than people interacting, know better. Those comprising the ruling elite live well, but the rest do not. In Cuba, Venezuela, or Argentina, where the state directs the economy, living standards fell.

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Topping Out?

Dave Davis Commentary, Policy, Uncategorized , , , ,

Could we be at the apex of the second Trump administration? The president is claiming victory on every front. Major trade deals with the E.U. and Japan, among others, were announced, with markets reaching new highs. Everyone is bending a knee to the master of the deal. Everyone knows because Donald Trump is on TV around the clock, telling us how great everything is going. To hear him tell it, there is almost too much winning.

Just under the surface, one can see some big rocks that the Administration is approaching. Both Japan and the E.U. imports are subject to a fifteen percent tariff. This rate seems stiff and protective of our manufacturing industries, such as the automotive sector, but a closer look reveals a different picture.

Reason’s economic and trade writer, Eric Boehm, points out that our domestic carmakers are dependent on inputs from Canada and Mexico, which are subject to a 25 percent levy. Using lower-cost parts and materials, Toyota could build autos completely in Japan, pay the tariff, and still undercut our auto manufacturers. The companies and the auto workers are already complaining about the disadvantage.

71% of Toyota cars sold in the U.S. are made here. This production supports hundreds of thousands of jobs in the U.S. With the price advantages afforded by the agreement to produce in Japan, these jobs are at risk.

If the 15% rate is suitable for Japan to produce at home, the E.U., subject to the same rate, will find itself in a similar position. European auto makers also employ a large number of people in the U.S. The Street put it this way, “The Big 3 now has a similar problem with EU competitors, as their 15% duties pale in comparison to the 25% duties U.S. manufacturers have to pay to get their cars from their Canadian and Mexican plants.” 

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Some Things On My Mind

Dave Davis Commentary, Policy, Uncategorized , , , ,

Catching up on some things I’ve commented on in the past. Remember when Donald Trump said he would end the Ukraine War in 24 hours? I made some suggestions on how he might accomplish this goal. Mainly, it consisted of ways to bring the pain of War to Russia—longer-range weapons to shoot back. As usual, the President ignores my advice. He still tells Ukraine not to hit key cities in Russia. Over half a year into his term, and the War rages on worse than ever.

After several pauses in aid to Ukraine, Trump has concluded that Putin is jerking him around. A former KGB officer can’t be trusted, who knew? Now he’s arranged to ship more arms to the embattled nation that our NATO allies will pay for. To many, this suggests a shift in Trump’s stance on the War.

I’m skeptical. The Washington Post’s David Ignatius, who in the past had good sources, says the new aid includes longer-range weapons and lifts range restrictions on some they already have. Still, unless these weapons hit the political centers of Moscow and St. Petersburg, it won’t matter that much. Till the people of these cities face the same terror that the citizens of Kyiv experience now, Putin has no incentive to change. Yet, Trump says Ukraine shouldn’t hit Moscow.

The President also threatened tough action on the sanctions-tariff front but gave Putin 50 days’ notice before any implementation. After more than six months, why so much time? Is it to head off the Senate from passing the Graham-Blumenthal sanctions bill? The Senate should pass the bill now with its significant bipartisan majority to send a message to both Putin and Trump.

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