Abolish the Commerce Department

If the Senate goes along with President-elect Donald Trump’s pick, then financier Howard Lutnick will be the next secretary of the Department of Commerce.

He should also be the last.

On Tuesday, Trump nominated Lutnick, a personal friend with deep ties to Wall Street who is also co-chairing Trump’s transition effort. In a statement on Truth Social, Trump said Lutnick would “will lead our Tariff and Trade agenda,” and Politico notes that Lutnick has been a defender of Trump’s plans to impose across-the-board tariffs. During an appearance on CNBC in September, Lutnick spelled it out clearly, saying “we should put tariffs on stuff we make and not put tariffs on stuff we don’t make.”

In other words, Lutnick aims to make it more difficult and expensive for many American businesses and consumers to engage in commerce, the very thing that he’s supposed to be overseeing. That contradiction reflects the Commerce Department’s own confused status—an amalgamation of programs and agencies that often have little to do with the exchange of goods and services, or seem determined to make the process more complicated than it needs to be.

Commerce, after all, is something that happens spontaneously, without government approval or direction. Americans are very good at commerce, and that has nothing to do with the fact that the federal government spends $121 billion on a department named after that activity. If the Commerce Department ceased existing tomorrow, we would still buy and sell things as if nothing had changed.

In fact, we’d probably buy and sell more things. As Lutnick seems keenly aware, one of the chief roles of the Commerce Department is to find quasi-economic rationales for the imposition of tariffs and other trade barriers. During Trump’s first term, it was the Commerce Department that cooked up the flawed studies explaining why steel and aluminum imports were a national security threat. The administration tried unsuccessfully to hide an even more embarrassing report claiming foreign-made cars were a threat too (thankfully those tariffs were never imposed).

If the president wants to impose economically damaging tariffs, he has that power—thanks to poor decisions by Congress. What we don’t need is an army of taxpayer-funded bureaucrats churning out reports that justify those delusions. Shut it down.

One might suspect that a large part of the Commerce Department’s portfolio would be focused on protecting Americans’ right to engage in commerce without undue coercion. That’s not true, because that role is already filled by other governmental entities. If someone lies or cheats or commits fraud during a business transaction—and if for some reason the judicial branch couldn’t solve the matter, which it probably would—then it would be the Department of Justice or the Federal Trade Commission that would get involved on behalf of the aggrieved party.

So what does the Commerce Department do, besides tariffs? If you go to its website, you’ll learn that “the department has one overarching goal: Improve America’s Economic Competitiveness.” (The best way to achieve that goal would be to tax American businesses less than similar businesses in other parts of the world, but current Treasury Secretary Gina Raimondo is an advocate for higher corporate taxes—so she’s failing by her own metrics.)

If you care to dig further, you’ll find that there are five “strategic goals” below this main objective. They manage, somehow, to be even more vapid. One promises to foster “equitable economic growth.” Another ensures “21st Century Service with 21st Century Capabilities.” And only 20-some years into the century! Great work, guys, this is totally worth $120 billion annually.

It’s a good bet that Lutnick will scrap some of that rhetorical nonsense when he gets the new gig. It would be better for Congress to shut the whole thing down.

In fairness, there are two big parts of the Commerce Department that seem worth saving—and one of them should never have been in this department in the first place, so moving them around the federal organizational chart shouldn’t be too difficult.

The first is the Census Bureau, which is charged with performing the (constitutionally mandated) once-per-decade counting of Americans and also performs a variety of other data-related tasks. It could be spun off as an independent agency, which might also give the Bureau a bit more independence to avoid politically motivated mandates regarding how it counts heads.

The second is the National Oceanic and Atmospheric Administration (NOAA), which forecasts the weather and charts the oceans. The NOAA could be downsized considerably since the private sector is more than capable of doing most of its work these days. What remains should be relocated to the Department of the Interior, where it obviously belongs—and where it would be if not for the fact that President Richard Nixon was mad at Interior Secretary Wally Hickel for criticizing the Vietnam War. No, that’s really the reason.

The Commerce Department makes little sense, and abolishing it isn’t even that radical of an idea. During his tenure, President Barack Obama (no champion of smaller government) called for downsizing and reorganizing the department so it could be focused more narrowly on trade policy. That would be a fine compromise today—one that would allow Trump and Luknick to trim some unnecessary agencies, relocate the NOAA and Census Bureau, and still pursue their (albeit misguided) tariff agenda.

Reports this week suggest that Lutnick landed in the catbird seat at the Commerce Department after losing an intense internal battle for the gig he really wanted: Treasury Secretary. Some of Trump’s top allies, including Elon Musk and Robert Kennedy, Jr., wanted Lutnick to get that post. “The fight over Treasury secretary has become a proxy battle over the direction of Trump’s term, with Bessent emerging as the clear favorite among some who prefer a more steady approach and Lutnick winning the backing of many of Trump’s more die-hard supporters,” The Wall Street Journal reported.

But the Commerce Department ought not to be a consolation prize. Indeed, the Commerce Department ought not to exist at all.

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Source: https://reason.com/2024/11/20/abolish-the-commerce-department/