Archive for the ‘Trade’ Category

Sensibility Killed the Penn

Tuesday, April 8th, 2008

George F. Will on Mark Penn’s downfall:

Mark Penn’s sin was to be caught doing something sensible, surreptitiously. That is the only way Democrats can do sensible things regarding trade when their party is pandering to organized labor. Penn’s downfall makes him a member of a species that many Democrats insist is large and about which Democrats theatrically grieve: Penn is a casualty of free trade.

The Democrats are veering more and more toward protectionism. Bill Clinton was an aberration, but Hillary clearly isn’t. Hopefully the Republicans will stand strong on this issue.

Republican Protectionism

Wednesday, January 16th, 2008

Stuff like this (among other things) makes me uneasy about Mitt Romney:

Mitt Romney on Wednesday swapped talk of resurrecting the auto industry that helped him in Michigan with a pledge to pay attention to textile and other industrial job losses that have punished the South.

“You’ve seen it here, in furniture. You’ve seen the textile industry, where Washington watched, saw the jobs go and go,” the Republican presidential contender told a group of senior citizens at the Sun City Hilton Head Retirement Center.

“I’m not willing to declare defeat on any industry where we can be competitive. I’m going to fight for every job,” Romney said.

How exactly is he going to do it? Trade barriers? Government subsidies? Corporate welfare? I guess limited government is out of the question…

Romney obviously is attempting to co-op the “I feel your pain” appeal of Mike Huckabee that worked so well for him in Michigan. It might work for him again in South Carolina, but I’m afraid it won’t be good for the country.

Tom Elia also has some thoughts.

Cross-posted at Tennesseefree

Protectionism on the Rise?

Wednesday, November 21st, 2007

It seems support for free trade is on the decline:

As the 2008 presidential election approaches, anti-trade sentiment is percolating across America. It is particularly strong in places like Ohio, where foreign competition has decimated jobs. The latest Wall Street Journal/NBC News poll conducted earlier this month found that 60% of voters nationwide agreed with the statement that “foreign trade has been bad for the U.S. economy.”

This is bad news for free traders and, I would argue, our country in general. Free trade has allowed Americans to acquire more goods and services at prices lower than would otherwise be imaginable. Personal choices have been maximized, which means more liberty. Any economist worth his salt will tell you that free trade is good for everybody, yet somehow many Americans don’t get it.

Bryan Caplan argues in The Myth of the Rational Voter that people have built in biases against things foreign – foreign made goods and immigrants. That is certainly a partial explanation.

Another reason is simple resistance to change. “Made in America” is becoming a thing of the past. Factories have closed down as companies have outsourced to India. In many ways this is progress, but progress has costs. Technology is advancing more rapidly than at any other time in human history. But some voters haven’t benefited much from this, don’t want to pay for progress.

We are already seeing the effects of this anti-free trade sentiment. More and more Democrats are embracing protectionism. But it’s not just the left that’s responding. Republican candidates Duncan Hunter, Ron Paul, and Tom Tancredo are also openly protectionist (not to mention anti-immigration).

Unfortunately, with 60% of American supporting protectionist policies, we will likely continue to see it being embraced by our political leaders.

UPDATE: This post is taking part in the Beltway Traffic Jam.

Williams On Target (As Usual)

Wednesday, April 18th, 2007

Dr. Walter E. Williams authors a history and economics lesson in one.

Energy Independence and Environmentalism

Wednesday, March 21st, 2007

Glen Dean suggests a coalition of conservatives, libertarians, and liberals to work toward the removal of tariffs on Brazilian ethanol:

That coalition would consist of free market libertarians/conservatives, and environmentalists. Of course some of the right wingers in that coalition might also believe that man is causing the earth to warm, but my guess is that all of them believe in the benefits of unrestricted free trade.

This seems like something people of all political stripes can agree on. Free trade is a major issue for many conservatives and nearly all libertarians (and some liberals too). Environmentalism generally unites the left. Certainly ethanol is much more environmentally friendly than our current fuel, and removing this tariff will make it much more economically feasible. What’s not to like?

UPDATE: This post is taking part in the Beltway Traffic Jam.

Ethanol Update

Monday, March 5th, 2007

President Bush is in Brazil, where is working on an ethanol agreement with that country:

The deal is still being negotiated, but the two leaders are expected to sign an accord Friday to develop standards to help turn ethanol into an internationally traded commodity, and to promote sugar cane-based ethanol production in Central America and the Caribbean to meet rising international demand.

Across Latin America’s largest nation, Brazilian media are billing the Bush-Silva meeting as a bid to create a new two-nation “OPEC of Ethanol,” despite efforts by Brazilian and American officials to downplay the label amid concerns that whatever emerges would be viewed as a price-fixing cartel.

It all sounds well and good, except for one part:

“For the Brazilians, the tariff has utmost priority,” said Cristoph Berg, an ethanol analyst with Germany’s F.O. Licht, a commodities research firm. “They will agree with developing biofuel economies around the world, but the first thing they will say is ‘We want to do away with that tariff.”‘

No one is expecting Bush to give ground on the tariff. The politically sensitive issue essentially subsidizes American corn growers who are rapidly ramping up ethanol production amid Washington’s encouragement of renewable biofuels to ease U.S. dependence on imported petroleum.

Without the repeal of the tariff, sugarcane-based ethanol will never be economical.

The Mexican Truckers Are Coming!

Tuesday, February 27th, 2007

The usual suspects are worked into a lather over the fact that Mexican trucks are going to have access to American highways. Be afraid, be very afraid, we are told. Of course, this whole thing was part of NAFTA, which many of the conservative critics supported. WSJ has a good editorial that debunks most of the demagoguery. Money quote:

It’s nice the U.S. government is finally getting around to meeting its obligations under a trade pact with Mexico ratified a mere 14 years ago. But even that is too fast for some protectionists.

Under the North American Free Trade Agreement, the U.S. was required to lift a ban on Mexican trucks traveling more than 25 miles inside the border. The deadline for doing so was 2000, yet seven years later the ban remains in place. Hence, when Mexican trucks reach the mileage limit, they must off-load and transfer the goods to American trucks, which carry them to their ultimate destination. You can understand why the Teamsters who represent American drivers favor this arrangement, however inefficient, but U.S. consumers pick up the tab.

Freedom and Economics

Wednesday, February 7th, 2007

Walter E. Williams has yet another brilliant column. Money quote:

The economic development lesson is clear: Have a system of economic freedom and grow rich. Extensive government control, weak property rights and government corruption almost guarantee poverty. A country’s institutional infrastructure is critical to its economic growth and the well-being of its citizens. The most critical are protection of private property, enforcement of contracts and rule of law.

Read it all; it’s well worth your time. And share it with any socialists you know!

What did Friedman say about Free Trade?

Tuesday, January 30th, 2007

Protectionism, here we come.

Tackling the Trade Deficit

Wednesday, January 17th, 2007

Both Walter Williams and John Stossel explain the follies of trade deficit doomsayers.