Showing posts with label protectionism. Show all posts
Showing posts with label protectionism. Show all posts

Friday, April 28, 2017

The Red Tape Times (article 34)

Wisconsin Bans Ungraded Butter Despite Lack of Health Risk

Source: Pacific Legal Foundation

Minerva Dairy, a family owned cheese and butter dairy that produces handcrafted artisanal butter can sell its products in all 49 other states. Wisconsin has recently begun enforcing a 40 year old statute that requires all butter sold within the state to be either USDA graded or graded by the state of Wisconsin, but not all diaries can afford the process. In order to be graded, Minerva would have to store up a week's worth of butter and pay for a USDA grader to be flown in every week. Minerva already has all of the business licenses required to make dairy products and operates in a USDA approved facility. The dubious grading process ensures every batch meets the USDA's standards for commodity butter, but Minerva doesn't make a commodity butter and most butters sold in the U.S. are not USDA graded. More than likely the Dairy lobby is behind the enforcement of this statute, just as they pushed to ban the 'Milk' label for non-dairy milks, to legislate away out of state competition. Regardless, interstate protectionism is illegal under the dormant commerce clause which prohibits states from discriminating against or impeding interstate commerce. More importantly, moral law grants every person the right to engage in voluntary transactions provided they do not impose a cost of their transaction on an uninvolved third party. It is plain that buying and selling artisanal cheese in no way exceeds the mutual limits of equal freedom while restricting such activity does.

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.

Friday, February 3, 2017

The Red Tape Times (article 19)

District Judge Upholds Teeth Whitening Monopoly in Georgia 

The U.S. District Judge for the Northern District of Georgia upheld a regulation requiring approval from the Dental Board (and formal training in Dental School) to sell teeth whitening products. Now she is probably correct in her opinion that it isn't unconstitutional to prohibit entrepreneurs from selling teeth whitening products; the constitution is after all not an exhaustive list of our natural rights. Therefore, it shouldn't be contested on constitutional grounds, which does very little to preserve economic freedom, but like all occupational licensure laws, it should be challenged on economic grounds in the Georgia General Assembly. IJ already found that occupational licensure cost consumers in Wisconsin $2B and 31,000 jobs annually, for low to moderate income earners, so if they are going to contest the Dental Board's licensing requirement for selling teeth whitening products, they should do so with research they've already done.

The regulation is so asinine that theoretically Walgreens could be shut down for selling teeth whitening products. In general, transactions between consenting adults should be left to the purview of consenting adults. The government's place is to step in when there is fraud or breach of contract, which in this woman's case she committed neither. She did not claim to be a licensed dentist. If consumers were willing to take the risk of buying her product that is their prerogative.  

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.

Thursday, November 10, 2016

Preview of the Trump Presidency

A year ago, I said this clown would fade into irrelevancy once the Iowa caucuses came around. I have never been more wrong in my life. His make it up on the fly policies will truly work wonders for this country.

Side Note: Being critical of Trump does not necessarily imply prior support for Clinton or Obama. Not everyone is confined to the false dialectic.

In some regards, Trump is more Hawkish than both Hillary and Obama. All of his pre-election speeches indicate that he plans to dramatically increase defense spending and revamp both the army and Navy. Although he is not as hostile to Russia and Syria, he is the only candidate that supports a ground invasion of Libya and Syria. On top of this, he supports all seven drone wars currently being carried out and will probably expand the CIA program to more countries. A man who talks openly about murdering non-combatant civilians (i.e. 'take out their families') and invading sovereign nations is not an isolationist by any stretch of the imagination (the term itself is a strawman). He is also the only candidate that holds the frightening belief that nuclear weapons should be used liberally.

Trump has shown as much disregard for our constitutional rights as he has shown for human life. His police state will be several fold worse than Obama's police state. Trump has voiced support for bringing back torture, even if it doesn't work, and believes that Americans citizens accused of terrorism should be tried in military courts. He is on record as supporting the continuation of the PRISM program and wants to re-authourize the Patriot Act. He has no qualms with using the terrorist watch list and no fly list to restrict our liberties without due process and a chance to appeal, and has suggested that people who appear on the no fly list and terrorist watch list should be prohibited from buying firearms. His reflexive authoritarian appeals to expediency, and consequently, absolute police power, only gets worse because he is the only candidate to propose a national stop and frisk. Only God knows what else lies at the bottom of the Pandora's box that is this man's twisted mind.

Most of Trump's domestic policy proposals indicate that he will be a bigger spendthrift president than both Obama (-10T) and Bush (-5T), even though he has promised to reduce the federal deficit. He will, in his own words, double the amount Hillary would have spent renovating national infrastructure, from $275B to $550 - 500B and perhaps even more. He will also dramatically increase defense spending, expanding the army and Navy, which Forbes estimated will cost an additional $500B to 1T. His proposed block grant for school vouchers will cost an additional 20B. This is just the tip of the iceberg. He has proposed to do much more while also cutting taxes. This is the same man that thinks imposing high tariffs on imported goods from China will bring back manufacturing jobs even though manufacturing has shifted to automation. Tariffs are ultimately a tax on wages; the brunt of his boneheaded trade policies will be felt by the working class who spend the greatest proportion of their income on consumer goods. Even the Chinese labor force, who presumably 'stole our jobs', are being displaced by automation.
The Changying Precision Technology Company factory in Dongguan has automated production lines that use robotic arms to produce parts for cell phones. The factory also has automated machining equipment, autonomous transport trucks, and other automated equipment in the warehouse.Previously, there were 650 employees at the factory. With the new robots, there's now only 60.
The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots. It has tasted success in reduction of labour costs,” said the department’s head Xu Yulian. As many as 600 major companies in Kunshan have similar plans, according to a government survey.

His promise to bring back a manufacturing based economy is pure fantasy. If he was truly concerned about chronic unemployment he would address the skills gap and not attempt to turn back the clock 40 years.

The fact that he supports the Kelo vs. City of New London decision only further shows that he is unprincipled. His precept is the law of the jungle. Whatever benefits him is permissible at any cost, even if it means seizing someone's home because it stands in the way of potential profits. If he abused his power as a real-estate mogul with political connections, which he used to get generous subsidies from NY city (885M to be exact) and tried to seize a widow's home, then we cannot begin to imagine the nightmare that lies ahead.