Friday, July 29, 2005

 

My Take on CAFTA

In the end, I view the passage of CAFTA as a net positive. Both sides in this issue (as they do in EVERY trade pact) vastly overstate the costs or benefits, depending which side of the issue they're advocating. So digging through the claims of the various camps was a bit of hard work, but in the end, I think it's good policy.

Economically, CAFTA will have very little impact from the US's perspective. 80% of imports from CAFTA nations already receive duty-free treatment. The other 20% will have very little impact on US jobs, mostly because we don't compete in the same industries as a Costa Rica or a Honduras, etc. On the other hand, our businesses will now have improved access to CAFTA markets, where our goods currently face substantial duties. This will be, unquestionably, a net positive for the US economy. Not a huge gain, but a net positive none the less.

The main criticism with CAFTA, from a pure policy perspective, is that it's weak on labor. I agree, and it's a shame, because we easily could have included stronger labor standards if we had tried (incorporating labor standards in trade policy is most likely going to be the focus of my masters project). That said, CAFTA is not going to result in a "race to the bottom" in CAFTA countries. Multinationals are seldom able to go into a country and attract workers by offering worse working conditions than the options currently available. While they might not offer US-calibre working standards, they usually offer better standards that what's currently available in the foreign country. Many are recognizing that you will have a more productive workforce if you offer decent standards. Furthermore, name-brand companies are under pressure from labor NGOs, and desperately want to avoid the bad publicity of operating a sweat shop.

The main reason I was almost against CAFTA, was due to the process of how this legislation was created. Traditionally, free trade agreements have been crafted with bipartisan input. In this case, Dems were completely excluded from the process. Completely...as in no input whatsoever. So CAFTA sets a very bad precedent in using free trade to advance a partisan agenda, versus seeking consensus and trying to create as good of a policy as possible.

A further positive that people should consider is the impact of CAFTA on advancing the Doha development round of the WTO. If we wouldn't have passed CAFTA, there was fear that the already sticky Doha negotiations would end. After all, if the US wouldn't agree to what is (from our perspective) an economic no-brainer where we were forced to give up virtually nothing, why would we ever be willing partners in advancing an agenda where we can and should make legitimate sacrifices?

UPDATE: I forgot to mention a few things. First, the expanded intellectual property protection for US drug companies will make drugs more expensive for the Central American countries. The patent system creates huge economic distortions. That's why many economists refrain from calling CAFTA a "free trade" agreement. Hopefully we can reach some sort of supplemental agreement to make sure people aren't dying because their medicine is now too expensive. I haven't seen any reliable studies on how big or small of an effect this will have, so if somebody can point me in the right direction, it would be greatly appreciated.

Second, while I still believe that the number of US workers affected by CAFTA will be quite small, there will still be some job losses. Unfortunately, W has tightened the eligibility criteria for Trade Adjustment Assistance. It would have been nice if he would have loosened the requirements in order to help those who will end up on the losing side of CAFTA.

Finally, I neglected to mention the costs of W's last minute horse-trading. By all accounts, it was open season on pork for those Congressmen whose votes were up for sale. The pork-laden Highway Bill and Energy Bill are testaments to this fact. How many taxpayer dollars were wasted in order to pass CAFTA? It's unknown, but given the size of the CAFTA economies (about the same as New Haven, CT by some estimates), it wouldn't surprise me if the losses from wasteful spending outstripped the potential economic gains from the deal.

Does this change my conclusion? Were Democrats right to vote against it? I think I'm leaning "yes" right now. Can someone out there convince me that my original analysis was correct?

UPDATE 2: Here's the World Bank's take on the effect of expanded IP rules on pharmaceuticals:

Thursday, July 28, 2005

 

"Free Trade Stops Wars"

That was the cry of an exasperated Toby Ziegler, as he railed against WTO protestors in a fine West Wing episode, "Somebody's Going to Emergency, Somebody's Going to Jail". And you know what? He's right.

Unfortunately, it's eminently clear that not enough people watched it, or that encouraging hemispheric peace wasn't important enough...given that CAFTA passed the House yesterday by a vote of only 217-215.

Kudos to the Bush administration for pushing this through...and shame on any representative of any party who opposed it. The economic arguments are there. The security arguments are there. The ideological arguments are there. Any member of Congress standing in the way simply lacked the stones to say to their constituents, "The economies of the US, Central America, and the world at large all need to evolve, and this is a step in the right direction."

Wednesday, July 27, 2005

 

Christmas in July (or April)

Looks like the fat man has come early for everyone's favorite Swedish Socialist:

U.S. May Significantly Reduce Troops in Iraq Next Spring

Merry Christmas, Nordy.

Tuesday, July 26, 2005

 

Enthalpy and Entropy

Today's Post runs a story critiquing the Administration's energy bill, which will likely clear Congress next month after conference resolution (Here are the House and Senate versions, courtesy of THOMAS). The main thrust of their argument? The bill would not accomplish its stated goal: reducing American dependency on foreign oil. It even includes a bombshell admission from Ben Lieberman at the Heritage Foundation:
"We'll be dependent on the global market for more than half our oil for as long as we're using oil, and the energy bill isn't going to change that. There's a few measures to increase domestic production...and that would not do much."
Well, gee, thanks for the news flash, skippy. It's no secret that expanding domestic production, waning naturally for 30 years, is only a stopgap measure for our energy problems...though many with backgrounds in business would argue that stopgap measures are the best way to ensure the viability of your new technologies. But we'll hold onto that for a minute.

See, most analysts will, as I just did, jump on the end of Lieberman's quote...but it's the first sentence they should hang on...."as long as we're using oil."

There has been a slow but steady change within the Republican Party to embrace the idea of renewable energy. Sen. Richard Lugar (R-IN), the Senate's expert in security issues, joined with a former CIA director to claim that renewable energy development is an issue of national security. And President Bush went to a Virginia biomass facility to offer his personal endorsement of the development of agroenergy.

No, it's not because the GOP is getting more eco-friendly...I think we can safely say that's not the case...but rather, they recognize the development of a new market. Oil and gas are on their way down in the US, and for good reason. They are expensive, they are pollutants, and they are imported. These three things are generally not a great combination for market retention. In supporting the development of renewable energy, the GOP is simply seeing where the market is going, and placing their investments appropriately.

Which returns me to the energy bill. The analysts quoted by the Post are quite right: the oil production provisions in the energy bill will not reverse the trend of foreign petroleum dependence. But, more importantly, the measures to encourage alternative fuels WILL have an impact on oil imports. On top of that, the quoted analyses don't take into account the continued development of biofuel and hydrogen technology in the private sector...which, oh by the way, will be supported with billions more in federal grants. And both the GOP and Democrats were pushing for the spending this time around.

Time will tell if the energy bill will have its desired effects. But observers would be wise to note that there is a change in energy in Washington...not only of the kind produced, but of the kind exerted.

Monday, July 25, 2005

 

Some wish he would go away

The (Raleigh) News & Observer reports that some North Carolina Democrats are upset with former Sen. John Edwards. Seems that Johnnie Boy has been jetsetting across the country, promoting efforts to raise state minimum wages...while ignoring an initiative in the NCGA to do the same in his home state.

His rep claims its because Edwards is focusing on ballot initiatives rather than legislative action. I say that's bull. Two things drove Edwards' Dean-esque voyages to Michigan, and Arizona, and Ohio...but not to NC:
  1. Johnnie Boy is just delusional enough to think he can win the Presidency in 2008, and thus needs to keep his hat in the ring (and name in the news, nationwide), and...
  2. He smartly realizes that he has no political future in North Carolina.
I could rant about Edwards for a while (my hatred of him is fairly well known...if you'd like more information, please email me)...but I'll sew it up with this: are there ANY good Democratic candidates out there? Christ, you can't challenge us in Congress...do you have ANYONE capable of winning an election?

UPDATE: The question remains open, but darned if there aren't people trying to volunteer. Yesterday's DLC summer meeting in Columbus featured four hopefuls for the 2008 Democratic nomination in three years...with Hillary, of course, the most prominent...and Virginia's Mark Warner the most promising.

Friday, July 22, 2005

 

Bush Officials Defend India Nuke Deal

My post over at Miblog Weighs a Ton on the India nuclear deal sparked some pretty lively discussion, with most commenters defending the deal. I still say it's a terrible idea. Wednesday's Post ran an article laying out the government's thinking behind the deal.

First and foremost, it looks like a pay-off to US arms manufacturers: "Pentagon officials, speaking on condition of anonymity, said they expected India to start purchasing as much as $5 billion worth of conventional military equipment as a result of the deal."

Second, the deal is meant as a counterbalance in the region against the power of China: "Pentagon officials said they considered many of the potential sales, including anti-submarine patrol aircraft that could spot Chinese submarines in the Indian Ocean and Aegis radar for Indian destroyers operating in the strategic Straits of Malaka, as useful for monitoring the Chinese military."

Do those sound like adequate benefits to US interests? They don't to me. Especially when given the costs, which include the further proliferation of dangerous weapons, and abandonment of decades of nuclear-control policies.

I ask defenders of this policy two questions:
1) What message does this send other countries with nuclear ambitions?
2) Aren't there ways to "engage" a budding world power that don't involve giving the proliferation of nuclear weapons?

Tuesday, July 19, 2005

 

The lesson, as always...

...is that I'm an idiot. The President nominated an old ally, Judge John G. Roberts of the DC Circuit.

More importantly, the lesson is that it's easy for both the press and hacks like myself to talk ourselves out of the obvious. When O'Connor retired, Roberts was one of the first names mentioned as a possible successor. And indeed, given his relatively short judicial paper trail, clear credentials as a jurisprudential scholar, and friendly relations with both sides of the aisle, it appears the primary difference between him and Judge Clement is that he has a penis.

Having read more of his work both as a litigant and judge, two comments are necessary:

1) I was too harsh to call him a party hack; his record as a litigant for Hogan & Hartson speaks otherwise. My claim was based more on his work as a solicitor for both Reagan and Bush 41's DOJs.

2) I'm more pleased with this nomination than the potential nod to Judge Luttig (though I find it unfortunate that Judge Roberts went to Harvard twice...yuck).

I'm far more interested in your opinions, though. Is he a good pick? What snags to see in his confirmation? Will we face another judicial showdown, or smooth sailing? If confirmed, what can we expect out of him on the bench?

 

Down to the wire

Two hours to go, and the press still doesn't know. Good God, I thought the whole buzz was that this White House was full of leakers! All day, we've heard buzz about Judge Edith Clement of the 5th Circuit...who has publically implied she would uphold Roe...but instead, it appears that it will be J. Michael Luttig of the 4th Circuit.

Don't get me wrong, I'm thrilled to see fellow UVA lawyer nominated...but couldn't it have been J. Harvie Wilkinson from the same court? Yeesh. I don't know if this is the right call. But then again, I'm an intern for an education policy shop.

Anyway...we'll see if, with 100 minutes to go, the press finally got it right. Here is a good overview of Judge Luttig's judicial history.

UPDATE! How could I have neglected to mention that the new buzz about Judge Luttig is based on...I can't believe this...the fact that he and his family are getting dressed for "some sort of event" tonight. For chrissakes, the family could be going to the Clyde's down the street, and we think he's going to the Bench.

Monday, July 18, 2005

 

Official Guesses!

The Washington Post reports that President Bush may announce his nominee for the bench this week...so it's time for some official guessing! The problem is...which President Bush will show up? Knowing the answer to that question allows you answer the question at hand: who is the new Justice?

Which will it be? Christ, I dunno. Since O'Connor resignation, I've said in numerous forums that the President will seek to build political capital with this nomination, not spend it. That fits with his political history: he only puts his wealth where long term, guaranteed victories exist, and despite the lifetime appointment, a court nomination is not one of those. So, I think the President will go with a safe choice: a strong conservative, but one who will likely be too popular to look beyond. Someone with political experience...someone with wise judicial opinions, but no paper trail on really controversial subjects...and someone who will cause little controversy. In other words, while I'm loathe to say this...politically, he needs a slightly more conservative Sandra Day O'Connor.

Ladies and Gentleman, my official guess: Maura Corrigan of Michigan.


Wednesday, July 13, 2005

 

Does the president stand by his pledge to fire anyone involved in a leak of the name of a CIA operative?

MCCLELLAN: Yes, but this question is coming up in the context of this ongoing investigation, and that’s why I said that our policy continues to be that we’re not going to get into commenting on an ongoing criminal investigation from this podium.


Q: Scott, if I could point out: Contradictory to that statement, on September 29th of 2003, while the investigation was ongoing, you clearly commented on it. You were the first one to have said that if anybody from the White House was involved, they would be fired. And then, on June 10th of 2004, at Sea Island Plantation, in the midst of this investigation, when the president made his comments that, yes, he would fire anybody from the White House who was involved. So why have you commented on this during the process of the investigation in the past, but now you’ve suddenly drawn a curtain around it under the statement of, 'We’re not going to comment on an ongoing investigation'?


Full transcription.

Categories: politics

Monday, July 11, 2005

 

The London Bombings

I've deliberately held off on commenting on the terrorist bombings in London. I did not want my comments to suffer from getting caught up in the emotions of the day. Anyone that knows me, knows that London holds a special place in my heart, having studied there as an undergrad. Also, I don't feel I have anything terribly original to add. But here are my assorted thoughts:


Wednesday, July 06, 2005

 

Iraq War Casualties Map

Interesting use of technology.

Iraq War Casualties Map

Tuesday, July 05, 2005

 

Social Security - the issue isn't dead yet

Photo_070505_002
I just received my quarterly "Social Security Statement" in the mail today. For whatever reason, I decided to read the entire pamphlet. For those not familiar with the statement, it basically shows your employee earnings for all the years worked and how much Social Security you would be eligible for if you went on disability, retired, or died (in that case, what your family would receive.)

However, something at the bottom caught my attention. In the U.S., we pay 6.2% up to $90,000, our employer matches that as well. That's 12.4% of your income if your employer could give you that cash.

So we have this whole Social Security issue that made the limelight a few months back, but what I never learned was this up to $90,000 fact.

Half of U.S. households (that's 50%) earns less then $43,528/year. So the bottom half of our country pays 12.4% of their income to Social Security. Yet almost 20% of our population earns over $90,000. And the top 5% earning more then $154,120. That means the top 5% of our population is paying < 6% of their income.

Nobody is debating that the rich should pay higher taxes, but I certainly don't think the poor should pay higher taxes!

I know this isn't news to a lot of people, but it's the first time I ran some calculations, here's an Excel worksheet I put together (some cells have 'comments' explaining the values) that is a little rough around the edges. What it basically says, is that if you taxed the same 12.4%, but only taxed the income between $54,440 - $154,120, you would come within the order of 5% of SS's current yearly revenue. So if we extended that cap up to $200k or $250k, it would generate a lot more revenue that current methods.

Sunday, July 03, 2005

 

All our (State)'s Largess

Happy Sunday!

In December 2002, The Governor's Commission to Promote Efficiency and Savings in State Spending released a report with 80 recommendations to help the state tighten its belt while offering better services. I'll give Easley credit for creating and empowering the Commission to report...after all, North Carolina has been stuck in fiscal crises, like most states, for nearly five years now, facing General Fund revenues up to $1.55 billion short of projections. In a state with a $16 billion budget, that's no small potatoes.

While it's a little late, the News and Observer finally saw fit to provide an update on the progress made towards the Commission's recommendations. Unsurprisingly, not much has been made on 12 of the largest cost savers for the state government...including such novel concepts as selling excess land, reducing duplicity of university programs among the 16 UNC campuses, and requiring zero-based budgets.

Word of note to members of the Democratic leadership in Raleigh: taxpayers really don't like being told that taxes must be raised, or vital programs like Transportation cut, when there are still numerous ways for the state to save money...if only legislators would get off their asses.

Saturday, July 02, 2005

 

Nobody ever thinks of the Irish

The New York Times had a little Op-ed piece earlier in the week announcing Ireland as the second richest country in the EU after Luxembourg.

Who would have ever thought of Ireland? I'd never realized so many American companies had investments and operations there.
The results have been phenomenal. Today, 9 out of 10 of the world's top pharmaceutical companies have operations here, as do 16 of the top 20 medical device companies and 7 out of the top 10 software designers. Last year, Ireland got more foreign direct investment from America than from China. And overall government tax receipts are way up.


T. Friedman goes on to point out a few of Ireland's success factors:
Ireland's advice is very simple: Make high school and college education free; make your corporate taxes low, simple and transparent; actively seek out global companies; open your economy to competition; speak English; keep your fiscal house in order; and build a consensus around the whole package with labor and management - then hang in there, because there will be bumps in the road - and you, too, can become one of the richest countries in Europe.


I've always thought (naively) that with such a high emigration rate, Ireland wasn't that strong of a country, financially. Although, my emigration understanding is from many of the Irish pubs I frequent, so my view may be a little biased.

It's interesting to see Ireland as a hotspot of activity within the EU. I wonder what type of competition Ireland will face from emerging Eastern European countries?

Friday, July 01, 2005

 

Look at me, I'm Sandra Dee

A former roommate called me this morning to alert me to the fact that Justice O'Connor was stepping down - "Is it sad that when I found out, I just screamed in fear?"

Well, yes...for lots of reasons, but this is a small space. In truth, I'm not too upset about her resignation...mostly because I'm not convinced she was a great jurist.

Oh, don't get me wrong, she's been good to me lately. I'm a big fan of her harsh dissent in the recent Kelo v. New London, while the Court's liberal wing allowed big business to steamroll whomever they'd like so long as the town council says it's OK. Plus, I think she and Justice Stevens got it right in their opinion for McConnell v. FEC...though I thought some of her other 1st amendment rulings were quite nutty (particularly her dissents in Texas v. Johnson and U.S. v. Eichman, both on flag burning.)

But I wonder if the former State Senator realized she had a lifetime appointment, given that her judicial opinions smacked of someone running for reelection. Whichever way the wind blew...and whichever ruling was least controversial...there was Sandra Day O'Connor, ready and willing to go with the flow.

Some would call this the definition of jurisprudence, but I call it inconsistent:
And if you are wondering, "Hey, you only gave social issues as examples!"...well, you're right: on most other issues, O'Connor authored few opinions and caused little trouble, all while maintaining her image as the "crucial swing vote" of the court. How politically savvy.

In this era when we have plenty of politicians changing their mind whenever they feel like it, we have to rely on the Courts and their Justices to review the law, review the Constitution, and provide a slice of sanity, continuity, and consistency. So, Sandra, thanks for your service...but don't let the door hit you on the way out.

And as her replacement is considered, let's look past the politicians and the party loyalists. Leave Alberto Gonzales at Justice to do...whatever it is he does. Leave John G. Roberts in the D.C. Circuit to be a party hack. Give me another Antonin Scalia or, hell, even a Ruth Bader Ginsburg. Give me an Emilio Garza or a J. Harvie Wilkinson. Give me a judge.

 

Why Bush Wanted Mahmoud Ahmadinejad to Win

The recent Iranian elections resulted in victory for Mahmoud Ahmadinejad - a man who's alternately described as a "conservative", "hardliner", "fundamentalist", or any combination of the preceding three words. Most sane people consider this to be Not A Good Thing. Ideally, sane people would like to see the Middle East moving away - not towards - fundamentalism.

A few weeks ago, blogger (and sometime Miblog Weighs a Ton commenter) Billmon raised an interesting point: "Given the level of hatred for America in the Islamic world now, the best way for Bush to promote reform would probably be to oppose it." I certainly had Billmon's words in my mind when I read about Bush weighing in on the Iranian elections. Why did he go out of his way to make a statement on the Iranian elections? Didn't he realize the easily foreseeable effect his comments would have?:

As big of a moron as I think Bush is, he and his handlers (well, mostly his handlers) had to realize the effect his comments would have. So that raises a new question: Why did Bush want Mahmoud Ahmadinejad to win?

The only reason I can come up with is this: the crazy fucker (Bush, not Ahmadinejad) wants to "do" Iran. As Iraq increasingly becomes a disaster, I've kept telling myself, "there's no way Bush is that crazy/stupid that he'd try and invade Iran." The writing is certainly on the wall.

  1. Neocons have been clamoring for the invasion of Iran for years. As they're fond to say, "real men want to go to Tehran."
  2. Throw them in the "Axis of Evil" for shits and giggles.
  3. Insist that Iran has an illegal nuclear weapons program. Provide no hard evidence, but repeat ad nauseum until it becomes the conventional wisdom.
  4. Refuse to take part in any diplomatic efforts to resolve said nuclear weapon "problem".
  5. Ensure the election of a hardline fundamentalist by denouncing the elections.
  6. Demonize the leader you just helped elect by brining out allegations (that were certainly known well-before Bush helped him get elected) that he was involved in the 1979 hostage crisis.

The skids are being greased. And according to some reporting, the invasion has already begun. Back in January, Seymour Hersh reported that the US has been conducting secret reconnaissance missions inside Iran to target suspected weapons' sites. US aircraft have been violating Iranian airspace in a search for targets as well. Scott Ritter (you'll remember him as the weapons inspector who was 100% right about Iraq's weapons capabilities, yet still slimed as a whacko by the mainstream media) reports that, "To the north, in neighbouring Azerbaijan, the US military is preparing a base of operations for a massive military presence that will foretell a major land-based campaign designed to capture Tehran." Why use Azerbaijan when US forces already surrounds Iran to both the east and the west? "American military aircraft, operating from forward bases in Azerbaijan, will have a much shorter distance to fly when striking targets in and around Tehran." And if you don't trust Hersh, the limeys, or Scott Ritter, how about former Pentagon official, journalist, and president of the Council on Foreign Relations, Leslie Gelb? Gelb just returned from Iraq, where he was evaluating US efforts to train the new Iraqi army. Here's what he had to say:

Readers (reader? anyone out there?), I ask: am I being crazy for noticing that we're following nearly the exact same steps we took to invade Iraq? Or is it the Bush administration that's crazy for pushing for another senseless war?

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