Showing posts with label free trade. Show all posts
Showing posts with label free trade. Show all posts

Tuesday, April 25, 2017

The Red Tape Times (article 33)

Trump Plans To Impose 20% Tarrif On Canadian Softwood Lumber

Source: NewYork Times

Link not included because it's pretty much in every major newspaper. I first heard about it from NYT.

The new tax, and that's what it is, is supposedly being levied in retaliation for Canada subsidizing their softwood lumber products. Oddly enough, the U.S. government also subsidizes the U.S. lumber industry but don't let facts get in the way of Trump's protectionist charade. Also keep in mind that this is the same shitbag who wants to take away property rights from American citizens (through eminent domain) so a Canadian company (TransCanada) can export it's tar sands oil here, which will eventually find its way to foreign markets. To think Trump has any principled objection to Canada subsidizing it's lumber industry is laughable and naive; something consigned to mental incompetents who think public officials act from altruistic motives. Regardless of Trump's motives, the new tax on imported lumber serves a purely sentimental benefit for people with incoherent ideas about fairness. In the long run, consumers are always the losers in trade wars and it is American consumers who will pay this tariff in higher lumber and real-estate prices. Protectionism, like it's first cousin socialism, is based on the false notion that the government can create jobs and therefore wealth by taking money from one industry and giving it to another (i.e. the broken window fallacy). We might see a spike in domestic lumber production, but we won't see that there is less disposable income available for other industries. The net difference is zero when we take the latter into account.

Sunday, April 2, 2017

The Red Tape Times (article 31)

Source: Institute for Justice

The state of Minnesota has an obscure statute that bans wineries from making wine unless the majority of the grapes used in their wine production are grown instate. This statute effectively imposes a trade barrier against out of state grapes. The drawbacks that result from this trade restriction are several fold. It forces wineries to use mostly grapes they grow in the harsh Minnesota weather, which makes it harder for them to expand their business, makes the wine more expensive and reduces the variety of wines they can produce for consumers. But most importantly, Minnesota's interstate trade restriction on out of state grapes is unconstitutional. Article 1 Section 8 gives congress the sole power to regulate interstate commerce. The dormant commerce clause implies, among other things, that states are prohibited from impeding interstate commerce by discriminating against out of state commerce. State's aren't allowed to restrict trade from other states for the same reason they aren't allowed to set their own immigration policies; they are not independent countries. Our federalist system delegates the authority necessary to maintain a country (e.g. national defense, immigration, trade policy) to the federal government and the rest is delegated to the states and municipal governments. Fortunately, the Institute for Justice has filed suit against the state of Minnesota on behalf of a handful of vineyards/wineries to overturn this statute.

Thursday, January 12, 2017

The Reason Clinton Lost the Election - Trade Policy

It wasn't due to 'Russian Hackers.' Trumps narrow victory in the electoral college, and yes it was a narrow margin of victory despite what Trumpbots may believe to the contrary, hinged on a few rust belt states without which he wouldn't have won. If he had lost Michigan, Wisconsin, and Ohio alone he would have only received 262 electoral votes. Had he also lost in Pennsylvania, he would have dropped to 242 in the electoral college. It was Obama's support for the Trans Pacific Partnership and Hillary's silence on the matter, and probably private support, that cost her a likely sweep of these traditionally blue states in presidential elections. Even the Soros funded 'fact-checker' Snopes acknowledges that Clinton had voiced public support for TTP several times during her tenure as Secretary of State and only attempted to distance herself when the campaign year came around.
Despite her current opposition to the agreement and her attempts during more than one presidential debate to recast her previous support of it as "hopeful," the record shows that Clinton spoke glowingly of the TPP on more than one occasion, not least when she praised it in 2012 as setting "the gold standard in trade agreements."
"We want to realize the benefits from greater economic integration. In order to do that, we have to be willing to play. To this end, we are working to ratify a free trade agreement with South Korea, we’re pursuing a regional agreement with the nations of the Trans-Pacific Partnership, and we know that that will help create new jobs and opportunities here at home."
"The United States is also making important progress on the Trans-Pacific Partnership, which will bring together nine APEC economies in a cutting-edge, next generation trade deal, one that aims to eliminate all trade tariffs by 2015 while improving supply change, saving energy, enhancing business practices both through information technology and green technologies."
"This TPP sets the gold standard in trade agreements to open free, transparent, fair trade, the kind of environment that has the rule of law and a level playing field. And when negotiated, this agreement will cover 40 percent of the world's total trade and build in strong protections for workers and the environment."
Trump, on the other hand, was very outspoken against the TTP from the beginning of his campaign and took a strong stance against it and previous trade agreements like NAFTA, unlike Clinton, who beat around the bush when the topic of trade policy was brought up.

Since the Trans Pacific Partnership was negotiated in secret, the only source for it contents came from Wikileaks. So the Mccarthycrats are correct when they say Wikileaks cost Clinton the election, but not in the way they think it did.

It is important to note that the purpose of these so called 'free-trade' agreements is not to break down international market barriers, but to consolidate corporate power on a global scale and consequently dismantle democratic institutions. Had their purpose been to simply reduce or remove duties and tariffs on imports from member nations the agreement would not have been thousands of pages long and kept hidden from the public. Had TTP been ratified, it would have given multinationals the power to sue national governments, in international tribunals, for any regulations that even slightly cut into their profit margins, essentially eroding national sovereignty. It would have allowed pharmaceutical companies to use ever-greening to artificially inflate drug prices, and it would have criminalized investigative journalism that exposes industry abuses with vague trade secret rules. Don't get me wrong, I am pro-free trade; I'm just against all of the other provisions included in these so called free trade agreements. Its like mixing 80% spring water with 20% raw sewage. In general though, free trade would only raise wages and the standard of living if it was coupled with a land value tax; otherwise, rising rents will reduce wages and inflate housing costs. Even though it would lead to economic growth, most of the new wealth would just accumulate at the top.

Sunday, December 4, 2016

The Red Tape Times (article 11): Trump's Economic Ignorance is Astounding

Protectionism is an example of the broken window fallacy. Trump's tariffs will be passed off to consumers, reduce the amount of spendable income they have for other goods and services, and reduce profits, and therefore jobs available, for businesses that produce those goods and services. He is basically saying we can tax our way to prosperity. The burden of Trump's new tax will fall disproportionately on working class people who spend the greatest portion of their income on consumer goods. It would have the same effect that a national sales tax would or any other tax on wages.Tariffs only result in increased rents; wages may rise quantitatively but they will decline in proportion to the distribution of wealth, as they have for the past four decades (dropping from 52% of GDP to 42.5%).

The a priori conclusion is the same. The moral law is cosmopolite; it makes no distinction between country, ethnicity, or race. The right to engage in free exchange of goods and services between countries follows just as necessarily from the law of equal liberty as the right to engage in free exchange of goods and services within the same country. Furthermore, economic rights and social rights are one in the same. They are deducted from the same basic fact of life that each person's freedom of action must be mutually limited by each other person's freedom of action so that all may engage in life sustaining activity, which is necessary for the greatest happiness of all.

I have no faith in this clown. He has no clue how to fund the additional government largess he's proposed and will in all likelihood run up larger deficits than both Obama and Bush. What's even more remarkable is that this buffoon contradicted himself within the same thought without realizing it, saying he would lower taxes while also raising them in other areas. I wouldn't be surprised if there is a deep recession at the end of his term.