So why is President Donald Trump taking Harley-Davidson—another U.S.-based global super-brand—to task?

A day after the company announced plans to serve the European market with motorcycles built in Europe, the president thundered: “A Harley-Davidson should never be built in another country—never!” He accused the company of hoisting the “white flag” of surrender and predicted “If they move, watch, it will be the beginning of the end.”

Harley-Davidson, Inc., made its announcement after the European Union raised tariffs on U.S.-made motorcycles by 25 percent—in retaliation to the 25 percent tariff on European exports of steel to the U.S. imposed by the Trump administration. Noting that the higher EU tariff would add approximately $2,200 to the average cost of a motorcycle exported from the U.S. to Europe, the company said:

Increasing international production to alleviate the EU tariff burden is not the company’s preference, but it represents the only sustainable option. Europe is a critical market for Harley-Davidson. In 2017, nearly 40,000 riders bought new Harley-Davidson motorcycles in Europe, and revenue generated from the EU countries is second only to the U.S.

The president said that he had “chided” Harley-Davidson executives on an earlier occasion for moving production to India as a way around high motorcycle tariffs in that country. But is it reasonable to expect a profit-seeking enterprise to keep all production and employment in the U.S., regardless of the cost in lost sales, profit, and overall competitiveness?

Certainly, the Trump Organization has not followed such a policy. Under licensing or other arrangements, it has fancy hotels bearing the Trump name in four different cities in India (Mumbai, Delhi, Pune, and Kolkata). Apart from Chicago, however, the Trump Organization has no luxurious hotels anywhere in the great American heartland. Why not?

Presumably, it made more sense from a business perspective to build hotels for the super-rich in India—though other cities in the American Midwest would have welcomed the same investment.

The president faulted Harley-Davidson for not being more “patient”—suggesting that his deliberately provocative approach to trade negotiations would force other nations to bend to his will for fear of losing access to the rich U.S. marketplace. As he said a couple of months ago— “Trade wars are good, and easy to win.”

But as Joe Haslag, the chief economist for the Show-Me Institute, notes, the president is playing “a very dangerous game,” because “the size, scale, and scope of the products that we are now talking about in increasingly acrimonious trade negotiations are staggering—a potentially U.S.-GDP-changing event.”

A grand strategy? Maybe, but early results are not promising. Mid Continent Nail in Poplar Bluff says its orders have dropped in half as a result of having to raise prices to make up for the higher cost of importing steel from Mexico. It has laid off 60 workers and says it may have to dismiss all of its 440 remaining workers by Labor Day.

In 2017, the Trump administration withdrew from the Trans Pacific Partnership—an agreement that would have reduced tariffs in Asian markets on motorcycles made in the U.S. That seems to have prompted Harley-Davidson’s earlier decision to build a manufacturing plant in Thailand. It may also have been a factor in the company’s decision to close its Kansas City manufacturing facility by 2019.

What caused the world-famous company with the “HOG” stock exchange symbol to make those choices? Surely it was rising tariffs on manufactured goods—a problem that does not exist in the luxury hotel business.

The post Trump vs. Harley-and the World appeared first on Show-Me Institute.

A quarter of a century ago, Margaret Thatcher threw the British House of Commons into an uproar when she mocked the concept of a United State of Europe in no more than three words. Punctuating each one, she said:

“No. No. No.”

This wasn’t just verbal overkill.  More precisely, she was saying “No” to a European Parliament comparable to the U.S. House of Representatives, “No” to a European Council of Ministers comparable to the U.S. Senate, and “No” to a European Commission approximating the power of the White House and executive branch.

Nevertheless, senior members of her party railed at her vehement rejection of a new conventional wisdom.  They challenged her leadership—and forced her resignation.

After eleven years (the most of any British prime minister in the 20th century), she was booted out of office on the issue of European integration. She resigned on Nov. 28, 1990.

Since her departure, every British PM (two Conservatives and two Laborites) has waved the pro-Europe flag. Support for the European Union (EU)—supplanting what began as the European Common Market—has been the consensus view of the British political establishment EST (Ever Since Thatcher).

However, with the “Brexit” vote last month, this era may also come to an abrupt close. After 26 years, will the British public  have swung around to her thinking? 

Thatcher foresaw many of the difficulties today’s Europe.

In 1975, as opposition leader, she campaigned to keep Britain in the Common Market. However, after winning a third term as prime minister in 1987, she worried about the metamorphosis of the Common Market from free-trade zone into the “Babel Express”—a new super-state with many different languages and national identities. Ironically enough, the EU was taking shape just as an older super-state (the Soviet Union) was falling apart.

A new super-state centered in Brussels, Thatcher thought, would be as antithetical to democratic freedom and democratic accountability as the older one centered on Moscow.  In her memoirs she wrote: It would have “the same inclination toward bureaucratic rather than market solutions” . . . and it would make distant and unelected elitists the masters rather than the servants of the people.

“Ultimately,” she wrote, “there was no option but to stake out a radically different position from the direction in which most of the Community seemed to be going, to raise the flag of national sovereignty, free trade, and free enterprise—and fight.”

Here are eye-opening excerpts from a major speech she gave less than two years out of office.  At the Hague, she predicted worsening problems of:

Insecurity—because Europe’s protection will strain [relations with the U.S.] on which the security of the Continent ultimately depends.

Unemployment—because the pursuit of policies of regulation will increase costs, and price Europeans out of jobs.

National resentment—because a single currency and centralized economic policy . . . will make [people in various countries] feel angry and powerless.

Ethnic conflict—because the wealthy European countries will not be the only ones faced with waves of immigration from the south and east.

Suffice it to say that all she predicted has come to pass.

The post Leadership Lessons from Attila the Hen: Margaret Thatcher on Europe-and the United States appeared first on Show-Me Institute.

Greece ill-temperedly rattles a tin cup—desperate for another handout from the European Union but feeling far more anger than gratitude toward its would-be benefactors.

Italy shares Greece’s pain—and its deeply ingrained sense of resentment and entitlement. Italy may follow Greece in bellying up to the EU’s bailout line.

Whatever happened to “the glory that was Greece and the grandeur that was Rome”?

In his famous funeral oration, delivered in 431 BC, the Greek leader Pericles sought to capture what it was that characterized Athens at the peak of its glory. In his words, the Athens of that time did not need a Homer to sing its praises, or even imperishable monuments, such as the Parthenon, completed only a few years earlier: “What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others to be eternally remembered.”

So how did the Greeks of this golden age manage to make such great and enduring contributions to Western civilization? Believe it or not (and progressives will find this especially hard to fathom), it was individual freedom, self-reliance, and an absence of class envy—combined with a powerful sense of Greek (and especially Athenian) exceptionalism.

Pericles began his speech with several observations about the nature of democracy in the city-state of Athens. As recounted by his contemporary, the historian Thucydides, Pericles said:

We are called a democracy, for the administration is in the hands of the many and not the few. Our laws afford equal justice to all in their private differences.

The freedom that we enjoy in government extends to ordinary life. Far from exercising a jealous surveillance over each other, we do not feel called upon to be angry with our neighbor for doing what he likes.

We regard wealth as something to be properly used, rather than as something to boast about. As for poverty, no one need be ashamed to admit it, but the real shame is in not taking practical measures to escape from it.

The great statesman, general, and patron of the arts went on to say how the freedom and openness of their city did not weaken but served only to redouble the valor, resourcefulness, and generosity of the citizenry:

Trusting in the native spirit of our citizens, we throw open our city to the world, and never exclude foreigners from any opportunity of learning and observing, although the eyes of an enemy may occasionally profit from our liberality.

To sum up, I say that Athens is the school of Hellas, and that the individual Athenian in his own person seems to have the power of adapting himself to most varied forms of action with the utmost versatility and grace.

It would take a Margaret Thatcher if not a Pericles to make a case for real reform—and there is no such champion of individual freedom and self-reliance anywhere to be seen.

The post A Periclean Solution To the Problem of Self-Pitying Greeks Demanding Gifts appeared first on Show-Me Institute.

These schools are not perfect — far from it, in some cases — but, for most of these students and parents, the system works relatively well. There is a well-known correlation between academic achievement and socioeconomic status, and students from higher-income families outperform lower-income students on practically every measure. This disparity is also reflected in the achievement gap between white and minority students. Tino Sanandaji, a Ph.D. student in public policy at the University of Chicago, recently compared the scores of non-Hispanic white American students with those of non-immigrant Europeans on the Programme for International Student Assessment (PISA) test, and found that the American students performed admirably. White Americans scored seventh out of 28 countries, beating students from Denmark, Sweden, and France, as well as an average of 15 European Union countries.

On the other hand, our educational system routinely fails poor and minority students — those least able to choose a different school by moving to another district. Although the racial achievement gap has narrowed somewhat in recent years, at age 17, black and Hispanic students still score about 10 percent worse on average than white students on the reading portion of the National Assessment of Educational Progress (NAEP). There a number of proven ways we can expand choice and improve academic achievement for those students.

Missouri has already experienced some success with charter schools. According to a 2009 study by the Center for Research on Education Outcomes at Stanford University, students attending charter schools in Missouri show more improvement in both mathematics and reading than similar students in traditional public schools, and this remains true when looking only at black and Hispanic students. Unfortunately, state statute limits the existence of charter schools to the cities of Saint Louis and Kansas City. If that restriction were removed, the gains of charter schools could be expanded to students in other struggling districts.

Furthermore, we could provide parents and students with more options in existing public school districts simply by restructuring how the schools are funded. Under a weighted-student-formula program (also known as “backpack funding”), students can attend any school within the district, and the schools are funded based upon the number of students they attract — with more dollars devoted to students who typically require more resources to educate (e.g., those with disabilities). Schools are then allowed more autonomy to experiment and compete for students — and for the money attached to them. In California, the cities of San Francisco and Oakland both implemented backpack funding and saw large gains in student achievement across ethnic and socioeconomic lines. San Francisco is now the top performing large urban school district in California. There is no reason, outside of political intransigence, that the Saint Louis and Kansas City school districts could not enact the same reforms.

It would be difficult to design an educational system worse for the disadvantaged than one that assigns students to schools based on the housing that their parents can afford. Although our best schools, public and private, are the product of parental choice, poor and minority students are frequently stuck in monopolistic urban school districts. School choice is not a panacea for this problem, but giving parents the power to choose is a necessary step toward ensuring a quality education for all of Missouri’s students.

John Payne is a research assistant for the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy.

The post Real School Choice Options Would Help to Narrow Educational Achievement Gap appeared first on Show-Me Institute.

I believe the main reason for this disparity is that foreign languages are treated by our public education system as less important than math, science and English. In contrast, E.U. governments expect their citizens to become fluent in at least two languages plus their native tongue.

Another panelist laments the fact that “unlike Europe, the U.S. has no coherent strategy for making our society bilingual.”

I suspect European countries’ policies are a reflection of their citizens’ interest in languages, rather than the cause. Europeans have ample reason to study languages; they all live within a short distance of other countries where different languages are spoken. As Norman Matloff notes in his response to the Room for Debate question, Americans who live close to the border with Mexico show more enthusiasm for learning Spanish than do their fellow citizens to the north.

Could it be that although proximity to foreign language speakers can spark people’s interest, policies are what really make them use other languages? If that’s the case, I’d be hard pressed to explain what happened in Ontario, Canada, where a ceremony was conducted in English a few weeks ago. That was despite French’s status as an official language of Canada, and despite the French-language public school boards and community colleges that are established throughout the province. When a language isn’t useful to people, policymakers who promote it are wasting their time.

The United States shouldn’t order everyone to learn languages, but the education system should give opportunities to become bilingual to people who are interested. Magnet schools and charter schools are good environments for language specialization, as are the optional language-immersion programs offered by some traditional districts. (Examples in Missouri are Academie Lafayette, the St. Louis Language Immersion Schools, and the Kansas City School District’s Foreign Language Academy.) Parents who want their children to have a lot of foreign language exposure can enroll them in these schools.

If Chinese language education is to continue growing, more people must be free to choose schools that teach it. Policymakers who are worried about American students learning English only ought to try to make it easier to open new language-immersion choice schools.

The post “No Coherent Strategy” for Teaching Foreign Languages appeared first on Show-Me Institute.

The bar on producing Stilton cheese here is a curious consequence of EU efforts to protect revered local foods by limiting the geographical area where they can be made.

Here is the ponderous statute. It looks like the people of Stilton, the village, could make Stilton, the cheese — but they couldn’t market it as such, so it wouldn’t do them any good. The law also forbids them to label their cheese “Imitation Stilton” or “Stilton Style,” proof that the regulations enforce a monopoly for producers without helping consumers at all. Were the goal to protect consumers from misleading advertising or inferior products, it would be fine to label products as imitations and let consumers choose between them and the “real thing.”

As more Americans become interested in where their food comes from and in giving preference to products from certain areas, I hope the United States doesn’t model any legislation on Europe’s detrimental policy.

The post Food Protectionism in Europe appeared first on Show-Me Institute.