Professional Documents
Culture Documents
Today’s Tabbloid
PERSONAL NEWS FOR craig.kirchoff+fisccon@gmail.com
This short video takes skyrocketing unemployment data and translates it By Benjamin H. Friedman
into a map of the United States.
Prepare to feel even less secure about the future of the country as you see
the malady take root like a cancer.
As the four people who read my recent book chapter on naval politics
know, that is not going to happen, and Navy knows it. Defense
production facilities are like hungry children that politicians feed by
extracting work from the Pentagon. The six major and several minor
shipyards that sell to the government in this country are largely jobs
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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+fisccon@gmail.com 10 December 2009
programs. They offer far more production capacity than the Navy and FISCALLY CONSERVATIVE BLOG FEEDS
Coast Guard need. Even though General Dynamics and Northrop
Grumman now own all six major yards, the firms have no interest in White House Spokesperson:
achieving economies of scale by closing yards. Politicians protect work
for the yards as long as they stay open. Maintaining extra yards means EPA “Will Regulate in a
that the Navy pays a large overhead premium for its ships, but doing so
widens its base of Congressional support. Command-and-Control Way”
The Navy has been is playing a bit of chicken with the Office of the [Americans for Tax Reform“Will
Secretary of Defense, leaving the cost of boomers out its last shipbuilding
plan in the hope that OSD would find the money elsewhere. OSD may do Regulate in a Command-and-
so yet, but in meantime the Navy is trying to bring around Congress,
taking hostages that powerful Congressmen will have to free. Big surface Control Way”]
combatants are made in Bath, Maine by General Dynamics and DEC 09, 2009 04:08P.M.
Pascagoula, Mississippi by Northrop. Susan Collins (R-ME) and Roger
Wicker (R-MS) are on the Senate Armed Services Committee. Gene Today, fears that President Obama would use the Environmental
Taylor (R-MS) chairs the House Armed Services subcommittee that Protection Agency (EPA) to regulate carbon if Congress does not pass
oversees the Navy. Chellie Pingree (R-ME) sits on it. By targeting surface “cap-and-trade” were confirmed by an unnamed White House ...
combatants, the Navy is pushing those members to go find some money
for it to save local jobs.
The most likely outcome here is that the Navy shipbuilding account will FISCALLY CONSERVATIVE BLOG FEEDS
get a slight planned boost but far from what the service requests.
Meanwhile the fleet will continue to shrink, because the ships’ Before There Was Climategate:
complexity keeps their cost high. No shipyard will close, so each will get
enough work to stay afloat, adding cost. A History Of Scientific
In a more austere and competitive budget environment, we would see Alarmism [Americans for Tax
more hard choices. The other services would start asking the White
House whether it is worth aiming for a three hundred ship Navy with no Reform]
obvious enemy to justify it. The Navy might tell the White House that DEC 09, 2009 04:03P.M.
carriers do what the Air Force’s fighters do, so cut their budget.
Congressional leaders looking for savings might ask why we still need to As the fallout from Climategate - where leaked emails reveal a history of
deliver nuclear weapons three ways, by submarine-launched ballistic lies and deception by global warming alarmists - continues, it is worth
missile, intercontinental ballistic missile and bomber. A monad with noting that this is not the first instance of scientif...
twelve boomers is all the survivable nuclear deterrent we need.
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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+fisccon@gmail.com 10 December 2009
FISCALLY CONSERVATIVE BLOG FEEDS White House to reconsider their Keynesian beliefs and to start
entertaining some market-oriented policies to get the economy moving
Is Keynesian Stimulus again.
The president said that we’ve had to “spend our way out of this A recent policy forum here at Cato discussed the role of the Community
recession.” We’ve certainly had massive spending, but it doesn’t seemed Reinvestment Act (CRA) in the financial crisis. While the forum focused
to have helped the economy, as the 10 percent unemployment rate on the federal push for ever expanding homeownership to marginal
attests to. borrowers, the analysis did not touch directly upon the question of
whether CRA lending undermines bank safety.
It’s not just that the Obama “stimulus” package from February has
apparently failed. The total Keynesian stimulus is not measured by Fortunately this is a question that one economist at the Federal Reserve
the spending in that bill only, but by the total size of federal government Bank of Dallas bothered to ask. While his research findings were
deficits. available before the crisis, they were clearly ignored.
The chart shows that while the federal deficit (the total ”stimulus” In a peer-reviewed published article, appearing in the journal Economic
amount) has skyrocketed over the last three years, the unemployment Inquiry, economist Jeff Gunther concludes that there is “evidence to
rate has more than doubled. (The unemployment rate is the fiscal year suggest that a greater focus on lending in low-income neighborhoods
average. Two months are included for FY2010) helps CRA ratings but comes at the expense of safety and soundness.”
Specifically he finds an inverse relationship between CRA ratings and
safety/soundness, as measured by CAMEL ratings.
The total Keynesian stimulus of recent years has included the Bush
stimulus bill in early 2008, TARP, large increases in regular
appropriations, soaring entitlement spending, the Obama stimulus
package from February, rising unemployment benefits, and falling
revenues, which are “automatic stabilizers” according to Keynesian
theory.
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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+fisccon@gmail.com 10 December 2009
FISCALLY CONSERVATIVE BLOG FEEDS a federal Immigration and Customs Enforcement official, a Colorado
state homeland security official, a federal Department of Homeland
University of Denver Panel Security official, a sheriff, the Colorado Attorney General, and a CIA
officer. It is unlikely that the one “immigrant rights” advocate addressed
Recommends You Have a the privacy issues for U.S. citizens, much less the technical and data
security problems.
National ID [Cato at Liberty]
DEC 09, 2009 02:46P.M. It’s not new for people focusing on one issue to think that a national ID is
their solution. In fact, it’s typical for people to think that sprinkling
By Jim Harper technology over economic and social problems can solve them.
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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+fisccon@gmail.com 10 December 2009
ATR Opposes Gregg-Conrad But Santorum is no Reaganite when it comes to freedom and limited
government. He told NPR in 2005:
Bipartisan Tax/Spending
One of the criticisms I make is to what I refer to as more of a
Commission Bill [Americans for libertarianish right. You know, the left has gone so far left
and the right in some respects has gone so far right that they
Tax Reform] touch each other. They come around in the circle. This whole
DEC 09, 2009 01:24P.M. idea of personal autonomy, well I don’t think most
conservatives hold that point of view. Some do. They have
Americans for Tax Reform President Grover Norquist sent the following this idea that people should be left alone, be able to do
letter today to Senators Judd Gregg (R-N.H.) and Kent Conrad (D-N.D.): whatever they want to do, government should keep our taxes
*** I write to express in the strongest possible terms Am... down and keep our regulations low, that we shouldn’t get
involved in the bedroom, we shouldn’t get involved in
cultural issues. You know, people should do whatever they
want. Well, that is not how traditional conservatives view the
FISCALLY CONSERVATIVE BLOG FEEDS world and I think most conservatives understand that
individuals can’t go it alone. That there is no such society that
Rick Santorum and Limited I am aware of, where we’ve had radical individualism and
that it succeeds as a culture.
Government? [Cato at Liberty]
DEC 09, 2009 12:45P.M. He declared himself against individualism, against libertarianism,
against “this whole idea of personal autonomy, . . . this idea that people
By David Boaz should be left alone.” Andrew Sullivan directed our attention to a
television interview in which the senator from the home state of
Benjamin Franklin and James Wilson denounced America’s Founding
idea of “the pursuit of happiness.” If you watch the video, you can hear
these classic hits: “This is the mantra of the left: I have a right to do what
I want to do” and “We have a whole culture that is focused on immediate
gratification and the pursuit of happiness . . . and it is harming America.”
When you have strong families and respect for life, he says,
“the requirements of government are less. You can have lower
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FISCALLY CONSERVATIVE BLOG FEEDS international network, who typically spend months or even years
plotting significant operations? Are they serious? How does that
The John Yoo Theory of Gun conversation go? “No, no, I’m sorry Osama. Yes, the Wal-Mart clerk, she
would not sell us a pistol! I know, and after Ayman went to all that
Control [Cato at Liberty] trouble making our fake passports by hand. I was disappointed too. But I
DEC 09, 2009 12:40P.M. guess we’d better scrap the plan and head back to Yemen.”
By Julian Sanchez What the other categories of “risky” people the Times lists have in
common is that they’ve been determined to be dangerous by a court,
A modest proposal: Suppose that we decide to streamline our inefficient which is normally the process by which we go about depriving people of
criminal justice system by treating people under suspicion of their rights. It seems perverse to depart from that principle precisely for
involvement with violent crime—whether or not they’ve been arrested, the category of suspects least likely to be hampered by these sorts of
charged, or even informed of this suspicion—as equivalent to convicted limitations.
felons. Suppose, then, that we permit them to be stripped of certain
constitutionally protected rights at the discretion of the executive
branch.
FISCALLY CONSERVATIVE BLOG FEEDS
Outrageous? Some depraved brainchild of the Bush administration’s
Office of Legal Counsel? Actually, it’s the editorial position of The New “Do as I say, Not as I do,”
York Times:
Hypocrisy Rampant at
Under federal law, people who pose a heightened risk of
violence cannot buy or own firearms, including convicted Copenhagen Climate Summit
felons, domestic abusers, the seriously mentally ill and
several other categories. Suspected terrorist is not one them. [“Americans for Tax Reform”
Individuals on the government’s terrorist watch list can be Hypocrisy Rampant at
barred from boarding airplanes, but not from purchasing
high-powered guns or explosives. Bipartisan legislation in Copenhagen Climate Summit]
both houses of Congress would end this ridiculous loophole, DEC 09, 2009 12:37P.M.
commonly known as the “terror gap.
The United Nations Copenhagen Climate Summit kicked off this week
The Times does note, before dismissing the fact with the wave of a hand, with world leaders, delegates, political activists, journalists, and
that “thousands” of people have been found to be on the list improperly. celebrities meeting about how to limit worldwide carbon emissions...
But let’s linger a bit longer over this. The terrorist watch list, at last
count, boasted about a million entries. When you eliminate variant
spellings and duplicate entries—and rest assured that this would be
another enormous source of problems—there are about 400,000 unique FISCALLY CONSERVATIVE BLOG FEEDS
individuals on the list, of whom some 20,000 are Americans. Thousands
more are nominated for inclusion on the list each week. Who Wants to Make Sarah Palin
Employ, for a moment, some common sense and arithmetic. The 9/11 the Leader of the Republican
attacks were carried out by 19 people. (I should add: 19 people armed
with box cutters.) If even one percent of those 20,000 were truly intent Party? [Cato at Liberty]
on staging violent domestic attacks, doesn’t it seem likely we would have DEC 09, 2009 12:33P.M.
noticed? To be sure, some small subset of them really are serious threats.
They are probably the very people the government is actively By David Boaz
investigating, and would prefer not to tip off by, say, having their
attempted gun purchases denied. Could it be the Washington Post? Bannered across the top of the Post’s
op-ed page today is a piece titled “Copenhagen’s political science,”
There’s also, of course, an almost heartwarming faith in formal process titularly authored by Sarah Palin. I’m delighted to see the Post
here. I can imagine circumstances where blocking someone at a point of publishing an op-ed critical of the questionable science behind the
sale might prevent bloodshed—some guy in the heat of passion or the Copenhagen conference and the demands for massive regulations to deal
haze of liquor acting on impulse to settle a score. But trained and with “climate change.”
fanatically committed terrorists, backed by the resources of an
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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+fisccon@gmail.com 10 December 2009
But Sarah Palin? Of all the experts and political leaders a great For more on this subject, go here, here, and here.
newspaper might call on for a critical look at the science behind global
warming, Sarah Palin?
What’s even more interesting is that the Post also ran an op-ed by Palin FISCALLY CONSERVATIVE BLOG FEEDS
in July. But during this entire year, the Post has not run any op-eds by
such credible and accomplished Republicans as Gov. Mitch Daniels; Journalism Will Not Just
former governors Mitt Romney or Gary Johnson; Sen. John Thune; or
indeed former governor Mike Huckabee, who might be Palin’s chief rival Survive, It Will Thrive [Cato at
for the social-conservative vote. You might almost think the Post wanted
Palin to be seen as a leader of Republicans. Liberty]
DEC 09, 2009 12:22P.M.
I should note that during the past year the Post has run one op-ed each
from John McCain, Bobby Jindal, Newt Gingrich, and Tim Pawlenty. By Jim Harper
(And for people who don’t read well, I should note that when I call the
people above “credible and accomplished,” that’s not an endorsement for . . . says Libby Jacobsen of CEI, writing in the Washington Examiner.
any political office.) Still, it’s the rare political leader who gets two Post
op-eds in six months, and rarer still the Post op-eds by ex-governors who
can’t name a newspaper that they read.
FISCALLY CONSERVATIVE BLOG FEEDS
Are and Don’t Know It [Cato at Politico: President Obama to urge banks to lend more President Barack
Obama will meet with chief executives of major banks on Monday and is
Liberty] expected to urge them face-to-face to lend more money to help promote
DEC 09, 2009 12:28P.M. economic recovery, banking sources tell POLITICO. t oppose his
financial reform initiatives, and why they ought to hold the line on
By Tim Lynch bonuses and compensation, the sources said.
There it is. Some of us have been trying to draw more attention to the Last year, drug makers gave Obama $3.58 in donations for every one
dangerous trend of overcriminalization. Judge Alex Kozinski co- dollar they gave to McCain. 35 percent of Republicans want to impeach
authored an article in my book entitled “You’re (Probably) a Federal Obama. Ten million people could lose their health care coverage under
Criminal.” And Cato adjunct scholar, Harvey Silverglate, calls his new the Senate bill, says the CBO. Economist Keith Hennessy examines the
book, Three Felonies a Day to stress the fact that the average President s definitely near the top. Here are the top-selling albums of the
professional unknowingly violates the federal criminal law several times decade.
each day (at least in the opinion of federal prosecutors). Not many
people want to discuss that pernicious reality. To the extent defenders of
big government address the problem at all, they’ve tried to write it all off
as the rhetoric of a few libertarian lawyers. Given yesterday’s back-and-
forth at the High Court, it is going to be much much harder to make that
sort of claim.
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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+fisccon@gmail.com 10 December 2009
Kristol Calls Reid’s Bluff [The Spending Our Way Into More
Club for Growth] Debt [Cato at Liberty]
DEC 09, 2009 11:31A.M. DEC 09, 2009 11:04A.M.
Over at the Weekly Standard, Bill Kristol has a helpful post up calling BS By Tad DeHaven
on Harry Reid s insightful analysis is his almost-superhuman ability to
count to 60. Huge deficit spending, a supposed stimulus bill, and financial bailouts by
the Bush administration failed to stave off a deep recession. President
Obama continued his predecessor’s policies with an even bigger
stimulus, which helped push the deficit over the unimaginable trillion
FISCALLY CONSERVATIVE BLOG FEEDS dollar mark. Prosperity hasn’t returned, but the president is persistent in
his interventionist beliefs. In his speech yesterday, he told the country
Memo to GOP: Big Business is that we must “spend our way out of this recession.”
Not Your Friend [The Club for While a dedicated segment of the intelligentsia continues to believe in
simplistic Kindergarten Keynesianism, average Americans are
Growth] increasingly leery. Businesses and entrepreneurs are hesitant to invest
DEC 09, 2009 11:19A.M. and hire because of the uncertainty surrounding the President’s agenda
for higher taxes, higher energy costs, health care mandates, and greater
Jonah Goldberg today once again picks up a theme — trumpeted every regulation. The economy will eventually recover despite the
week by the estimable Timothy Carney — that too few conservatives government’s intervention, but as the debt mounts, today’s profligacy
grasp and explain: s bad for all Americans, not least the knuckleheaded will more likely do long-term damage to the nation’s prosperity.
politicians who welcomed the wolves into the hen house in the first
place. Earth to DC Republicans: Wall Street and K Street are not your Some leaders in Congress want a new round of stimulus spending of
friends. $150 billion or more. The following are some of the ways that money
might be spent from the president’s speech:
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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+fisccon@gmail.com 10 December 2009
state and local government employees – not more – as they’re doubly ignored (if that’s logically possible) in education, where the
becoming an increasing burden on taxpayers. assumption is that government must provide the schools if they are to be
any good, and that profit-seekers are handmaids of the devil.
The president said his administration was “forced to take those steps
largely without the help of an opposition party which, unfortunately, And so I ask (only slightly tongue-in-cheek): How many more children
after having presided over the decision-making that led to the crisis, have to get E. coli before we allow freedom in education?
decided to hand it to others to solve.” Mr. President, nobody has forced
you to do anything. You’ve chosen to embrace – and expand upon – the
big spending policies that were a hallmark of your predecessor’s
administration. FISCALLY CONSERVATIVE BLOG FEEDS
By Neal McCluskey
This is a basic, basic reality that is all but totally ignored by people who
*Sen. Judd Gregg (R-NH) Budget Cmte. Ranking Member
insist we need government to protect us from evil corporations. And it is
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*Sen. Kent Conrad (D-ND) Budget Cmte. Chair the FEHBP is apparently acceptable to moderate Democrats because the
insurance plans are private rather than government entities, while
ARE THE HOUSE FLIPPERS BACK? liberals like it because it is government regulated and managed.
*Damon Lines, Executive at PostedProperty.com In addition, the compromise plan would expand Medicare, allowing
*Chad Rogers, star of Bravo’s hit TV show Million Dollar Listing workers ages 55 to 65 to “buy in” to the program, and may also expand
Medicaid.
TIGER WOODS FEELS THE SCREWS
CNBC’s Jane Wells reports. A few reasons to believe this is yet another truly bad idea:
Please join us. The Kudlow Report. 7pm ET. CNBC. 1. In choosing the FEHBP for a model, Democrats have actually
chosen an insurance plan whose costs are rising faster than
average. FEHBP premiums are expected to rise 7.9
percent this year and 8.8 percent in 2010. By comparison,
FISCALLY CONSERVATIVE BLOG FEEDS the Congressional Budget Office predicts that on average,
premiums will increase by 5.5 to 6.2 percent annually over the next
Capitalism unleashes passions few years. In fact, FEHBP premiums are rising so fast that nearly
100,000 federal employees have opted out of the program.
of triumph, tragedy, love, and
2. FEHBP members are also finding their choices cut back. Next
victory! [The Club for Growth] year, 32 insurance plans will either drop out of the
DEC 09, 2009 10:26A.M. program or reduce their participation. Some 61,000 workers
will lose their current coverage.
A snow storm roared in to Omaha. Schools closed, bussinesses closed.
Interstates were clogged with many stranded cars. Got to love this thing 3. But former OPM director Linda Springer doubts that the agency
called capitalism! has the “capacity, the staff, or the mission,” to be able to manage
the new program. Taking on management of the new program
could overburden OPM. “Ultimate, it would break the system.”
FISCALLY CONSERVATIVE BLOG FEEDS 4. Medicare is currently $50-100 trillion in debt, depending
on which accounting measure you use. Allowing younger workers
FEHBP Plan Is No ‘Moderate to join the program is the equivalent of crowding a few more
passengers onto the Titanic.
Compromise’ [Cato at
5. At the same time, Medicare under reimburses physicians,
Liberty‘Moderate Compromise’] especially in rural areas. Expanding Medicare enrollment will
DEC 09, 2009 09:58A.M. both threaten the continued viability of rural hospitals
and other providers, and also result in increased cost-shifting,
By Michael D. Tanner driving up premiums for private insurance.
Senate Majority Leader Harry Reid (D-NV) has announced that he has 6. Medicaid is equally a budget-buster. The program now costs
reached a super secret compromise on how to deal with the so-called more than $330 billion per year, a cost that grew at a rate of
public option for health reform. While Reid said the agreement was too roughly 10.7 percent annually. The program spends money by the
important to actually tell anyone what is in it, most of the details have bushel, yet under-reimburses providers even worse than Medicare.
been leaked to the press.
7. Ultimately this so-called compromise would expand government
Rather than set-up a completely government-run insurance plan to health care programs and further squeeze private insurance,
compete with private insurance, Congress would establish a program resulting in increased costs, result in higher insurance
similar to the Federal Employees Health Benefit Program (FEHBP), premiums, and provide a lower-quality of care.
which currently covers government workers, including Members of
Congress. The FEHBP offers a variety of private insurance plans under a No wonder Senator Reid wants to keep it a secret.
program managed by the US Office of Personnel Management (OPM).
Each year OPM uses the Federal procurement process to solicit bids
from insurance companies to be one of the plans offered. Premiums can
vary, but participating plans operate under stringent rules. As a model,
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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+fisccon@gmail.com 10 December 2009
FISCALLY CONSERVATIVE BLOG FEEDS We’ve heard this tune before — but from politicians who are presumably
far less adept at economics than a University of Chicago economics
Senate Dems Reach ‘Broad professor ought to be. Yet, even Chuck Schumer ultimately
acknowledged the banality of his (and Lindsey Graham’s) thrice-
Agreement’ on Health Care [The introduced legislation to impose a 27.5 percent tariff on Chinese imports
as a proxy and incentive for renminbi appreciation.
Club for Growth]
DEC 09, 2009 09:26A.M. If Aliber limited his argument to the assertions that the bilateral
imbalance is unsustainable and that the Chinese government should
Socialism is only a few votes away from becoming law. It outlines, albeit allow the value of the renminbi to be determined by supply and
vaguely, where Olympia Snowe, Joe Lieberman, and Ben Nelson (three demand, I’d have much less to quibble with. I’d still be plenty skeptical
fencesitters) currently stand on the new agreement. that bilateral trade accounting tells us anything meaningful in this age of
cross-border investment and transnational production and supply
chains. I’d still break from the implication that balanced trade should be
an objective of policy or that it is more important than economic growth.
FISCALLY CONSERVATIVE BLOG FEEDS And I’d still remain unconvinced that an increase in the value of the
renminbi alone would have much of an impact on bilateral trade flows.
NYT Room for Debate on But I’d agree that a market-determined exchange rate would increase the
likelihood that investment, consumption, and production decisions
Comcast-NBC [Cato at Liberty] would better reflect underlying conditions in labor, financial, and goods
DEC 09, 2009 09:23A.M. markets, and in that regard would be a more useful guidepost for
informed decisionmaking.
By Jim Harper
But Aliber’s proposal — and the numerous fallacies upon which it is
The Comcast-NBC deal has the traditional media world all predicated — goes well beyond that point, and appears to be the product
atwitter—well, better call it aflutter. “Atwitter” is losing its old media of something like acute tunnel vision. He is so fixated on the bilateral
connotations. trade account that nothing else — including the impact of his proposal on
the economy broadly — commands his attention.
So the New York Times rounded up a foursome of advocates to air their
views, among them Cato alum Adam Thierer and yours truly. Aliber utters all of the classic fallacies about the insidious impact of
China’s currency on U.S. manufacturing; the leverage and sway China
allegedly holds over U.S. policymakers, as our banker of last resort; and,
how China caused our trade deficit by purchasing U.S. securities. I
FISCALLY CONSERVATIVE BLOG FEEDS disagree with all of those assertions, vehemently, and have explained
why in various places, but I want to focus presently on his proposal,
A Trade Proposal Unworthy of which is one of the worst ideas in circulation.
an Economist [Cato at Liberty] Consider this passage, which Aliber apparently considers evidence of
DEC 09, 2009 08:51A.M. the cleverness of his plan (but really exposes its inanity):
Aliber considers the US-China trade imbalance unsustainable and, Neat. But isn’t the fact that Chinese exports contain so much import
because the Chinese government continues to prevent the value of its content enough to soundly reject Aliber’s plan in the first place? Has he
currency from rising sufficiently, proposes that the United States impose forgotten that we don’t import dangling Chinese value added? What we
an across-the-board duty of 10 percent on all Chinese imports, which import are products, some of which comprise 20 percent Chinese value
(after 6 months) would ratchet up 1 percentage point per month every added, some 80 percent, and according to the most recent research, an
month until the Chinese trade surplus with the United States declines to average of about 50 percent Chinese value added. And what does that
$5 billion per month. mean?
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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+fisccon@gmail.com 10 December 2009
It means that on average 50 percent of the value of components, raw but a stronger renminbi also means that Chinese-based
materials, and labor embedded in the typical cargo container from producers/assemblers will pay less for imported raw materials and
China unloaded in Long Beach, California is other countries’ value components, lowering their cost of production/assembly. That cost
added. It means that slapping a duty on imports from China is the same savings should enable Chinese exporters to lower their prices to
as restricting imports from countries indiscriminately (I know, non- American consumers, possibly compensating entirely for the higher
discrimination is what the GATT/WTO rules are all about, but you get renminbi-dollar exchange rate.
my point). It means restricting our own exports to China, which
are embedded in the “high-tech” products that we import from China. Of course, there are plenty of other reasons to eschew Aliber’s proposal,
(High tech is in quotes because the category consists mostly of not the least of which is the fact that it certainly would be found WTO-
computers and electronics, like cell phones and iPods, but protectionists illegal and would invite discrimination against U.S. exporters.
like to exaggerate the security angle of our alleged trade follies by Considering that increased U.S. exports — and not just reduced imports
pointing to a bilateral deficit in “high tech,” even though Chinese value- — can help reduce the bilateral deficit, it is curious that Aliber would
added in those goods is well below average, and our imports of them propose a remedy that would likely curtail U.S. exports. It would also
support high-paying U.S. jobs). raise costs throughout the supply chain directly, and by introducing
enormous uncertainty into the trading system.
Having obviously not read my new paper, Aliber still sees global
commerce as a competition between “Us” and “Them.” He writes: “It Now that he’s seen the light, maybe Chuck Schumer should give Aliber a
should not take long for the Chinese to learn that they are much more call.
dependent on access to the US market than Americans are dependent on
Chinese goods,” and goes on to say that Americans can make those
product here or buy them elsewhere. Of course we could get them
elsewhere, but the fact that we prefer to get them from China means that FISCALLY CONSERVATIVE BLOG FEEDS
there would be costs associated with switching sources.
Supreme Court Wastes Time,
Aliber is a fixed-pie-kinda-guy who fails to recognize the enormous
wealth that has been generated by the elimination of political, trade, Money, and Opportunity to
communications, and transportation barriers, and the highly stratified
division of labor this barrier erosion unleashed. He fails to recognize that Protect Property Rights and
Chinese labor and American labor are more often complementary than
competing, and that the factory floor has broken through its walls and Due Process [Cato at Liberty]
now spans oceans and borders. DEC 09, 2009 08:42A.M.
Imposing 10 percent duties on products invented and designed in the By Ilya Shapiro
United States, consisting of components produced in Japan, Singapore,
Thailand, and the United States, consuming Australian minerals in the This morning the Supreme Court released its first four opinions in cases
production process and Chinese labor in the assembly process is akin to argued this term, the latest first-opinion release in recent history. The
taking a sledge hammer to a random station along a traditional only one that interests me — and it’s not Justice Sotomayor’s maiden
production-assembly line. It impedes the production process and raises effort — is the civil forfeiture case, Alvarez v. Smith.
the cost of bringing products to consumers, inflicting damage that is felt
at all nodes in the design/production/assembly/supply chain, including Civil forfeiture, the practice in which the police seize cars, money and
those in the United States. other kinds of property that they say has some connection to crime, can
raise various legal and policy issues — from property rights to due
It means making it more difficult to support higher value-added U.S. process. The question in Alvarez was the basic one of whether people
manufacturing and service activities because with uncertain or seeking to get their property back are entitled to a prompt hearing before
compromised access to lower cost component production and assembly a judge.
operations in China, it will be more difficult for ideas hatched in
American labs to come to fruition in the form of the next gadget or I blogged about the case here, and Cato adjunct scholar Ilya Somin wrote
convenience or life-saving device. about it here. Cato’s also filed a brief in the case supporting the
individuals whose property was seized.
China’s position as the final point of assembly in so many different
supply chains, as evidenced by the fact that 50 percent of the value of its Unfortunately, because all underlying disputes had been resolved by the
exports to the United States consists of Chinese material, labor, and time of oral argument — cars had been returned and the individuals have
overhead, means that the impact of currency appreciation on the either forfeited their cash or accepted the state’s return of some of it —
bilateral trade account is uncertain. A stronger renminbi vis-a-vis the the Court determined the case to be moot. It thus vacated the lower
dollar means that Americans should pay more for imports from China, court’s opinion and remanded with instructions for that court to dismiss
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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+fisccon@gmail.com 10 December 2009
the case.
FISCALLY CONSERVATIVE BLOG FEEDS
And that’s a shame. While the dispute does seem to be moot with respect
to the particular petitioners, this is obviously a situation “capable of Use Your Law Deferment to
repetition” but “evading review” — along the lines of that little-known
case of Roe v. Wade. That is, just like the case of a pregnant woman is Work for Liberty! [Cato at
moot within nine months, disputes over civil forfeiture get resolved one
way or the other long before the slow turn of litigation reaches the Liberty]
Supreme Court. By avoiding the merits of this case, the Court guarantees DEC 09, 2009 08:35A.M.
that the important constitutional questions presented by this case
remain perpetually unresolved. By Ilya Shapiro
What is more, by vacating the Seventh Circuit’s opinion – an Many law firms are asking their incoming first-year associates to defer
extraordinary remedy — the Court deprives Illinoisans of a well- their start dates (from a few months to a full year) and are offering
reasoned and just ruling that could be used as precedent in future cases. stipends to these deferred associates to work at public interest
It also – and this is no small matter — wastes the time, effort, and organizations. Cato has been running a deferred associates program for
resources of the parties and their attorneys, taxpayers (who obviously the last few months and we are now extending it for as long as top-notch
paid for the petitioners’ legal work here, as well as that of the judiciary), candidates want to ride out the economy with us.
and, of course, amici (including Cato).
The Cato Institute invites third-year law students and others facing firm
Justice Stevens was correct in his partial dissent: if the Court disagrees deferrals to apply to work at our Center for Constitutional Studies. This
with the argument I made in the preceding paragraph, it should have is an opportunity to assist projects ranging from Supreme Court amicus
applied the general rule against vacating judgments that have become briefs to policy papers to the Cato Supreme Court Review. Start and end
moot because the parties settled. The proper disposition here would have dates are flexible. Interested students and graduates should email a
been to DIG the case — dismiss the writ of certiorari as improvidently cover letter, resume, transcript, and writing sample, along with any
granted (which allows the lower court ruling to remain on the books specific details of their deferment (timing, availability of stipend, etc.) to
undisturbed). Jonathan Blanks at jblanks@cato.org.
Please feel free to pass the above information to your friends and
colleagues. For information on Cato’s programs for non-graduating
FISCALLY CONSERVATIVE BLOG FEEDS students, contact Joey Coon at jcoon@cato.org.
By Ian Vasquez
In 2008, there were some 6,300 drug war killings in Mexico, double that
of the previous year. El Universal newspaper in Mexico reports that
deaths related to the drug war have just surpassed 7,000 since the
beginning of 2009, with more than 1000 of those homicides in the last
48 days. That’s a daily rate of 21.3 deaths for the year.
Drug traffickers have long operated in Mexico, but the rise in drug
violence is a direct result of President Calderon’s all out war on the drug
trade, which he announced upon coming into office December 2006.
Annual drug war deaths have more than tripled since then. As
Washington starts to spend the bulk of the $1.3 billion Merida Initiative
to help Mexico fight drugs (Washington has spent $24 million so far), we
can expect the violence to continue increasing. (For a review of Mexico’s
futile war on drugs, see Ted Carpenter’s study.)
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