Category Archives: Political Commentary

A Sideshow?

Roger Cohen asks if Europe matters any more:

At a recent meeting here of the Council for the United States and Italy, a group that brings together influential folk from both sides of the Atlantic, America’s often withering view of Europe was as clear as the light on the lagoon.

That view may be summarized as follows: a Continent reluctant to spend on defense, offering only “postmodernist” armies useful enough as peacekeepers but next to useless as warriors, given to earnest blah-blah about the pre-eminence of international law, inhabited by a declining and evermore aged citizenry living in overregulated economies that have not shown significant growth for at least five years.

Contrast that image with another offered at the meeting: that of an India growing at over 7 percent a year, inhabited by more than 500 million people under the age of 25, busy buying hundreds of advanced aircraft, convinced that armies are still created to fight, churning out English-speaking high-tech graduates by the million each year, and persuaded by Islamic terrorism that its strategic goals and America’s are often identical or at least complementary.

So, which of these parts of the world is more worthy of the attention of the United States? Which is a compelling affair: the intensifying and fast-changing relationship with India, or the largely stagnant alliance with Europe that served above all a cold-war strategic challenge now overcome?

Don’t Quota Me

Chinese apparel have been slapped with a quota. Quotas are worse than tariffs, but first here’s a little background.

The rash of China bashing is well-timed to keep the Chinese buying dollars according to Yuan Answers? (WSJ, 6/10, subscription required). A triangular trade where US sends dollars and st0ck and title deeds overseas to the rich savers of the world and imports lots of stuff in one way shipping containers from China is not a bad thing. In fact, it can be sustained indefinitely with the US capital st0ck continuing to grow. It is a testament to how our laws are not quite as bad as everyone else’s.

In economics we talk about how tariffs and quotas both imply a “deadweight social loss”. When prices are artificially raised via a tariff, the customer prices rise and the supplier prices fall. The quantity sold also falls. It is this last part that is the first component of deadweight loss. By reducing the quantity sold, profitable trades without the tariff become unprofitable because they are not profitable enough to beat the “spread” between the supplier and customer prices induced by the tariff. All this is Economics 101.

A quota has an additional element beyond this kind of loss. In a quota, the supply price rises too. That means that any supplier who can produce at the new higher price will try to fulfill their quota. Thus suppliers who would have cut back production under a tariff will continue to produce to fulfill their quota. Everyone is cut back pro-rata (or according to some formula, e.g., 7.5% more than last year even if growth would otherwise be 500%) and not according to who is the most efficient. Coase might say that quota shares could be traded, but this entails higher transactions expense than the decentralized trade that occurs with a competitive market price.

The additional inefficiency is happily born by international suppliers who receive a major benefit when a quota is imposed–higher prices. So the quota is a collusive bargain between the Government, the domestic suppliers and the foreign suppliers to raise prices on the consumers at the cost to the economy of two kinds of deadweight social loss. Diffuse harm, concentrated benefit. Can one file a class action law suit against an industry association that lobbies for selfish policy?

Don’t Quota Me

Chinese apparel have been slapped with a quota. Quotas are worse than tariffs, but first here’s a little background.

The rash of China bashing is well-timed to keep the Chinese buying dollars according to Yuan Answers? (WSJ, 6/10, subscription required). A triangular trade where US sends dollars and st0ck and title deeds overseas to the rich savers of the world and imports lots of stuff in one way shipping containers from China is not a bad thing. In fact, it can be sustained indefinitely with the US capital st0ck continuing to grow. It is a testament to how our laws are not quite as bad as everyone else’s.

In economics we talk about how tariffs and quotas both imply a “deadweight social loss”. When prices are artificially raised via a tariff, the customer prices rise and the supplier prices fall. The quantity sold also falls. It is this last part that is the first component of deadweight loss. By reducing the quantity sold, profitable trades without the tariff become unprofitable because they are not profitable enough to beat the “spread” between the supplier and customer prices induced by the tariff. All this is Economics 101.

A quota has an additional element beyond this kind of loss. In a quota, the supply price rises too. That means that any supplier who can produce at the new higher price will try to fulfill their quota. Thus suppliers who would have cut back production under a tariff will continue to produce to fulfill their quota. Everyone is cut back pro-rata (or according to some formula, e.g., 7.5% more than last year even if growth would otherwise be 500%) and not according to who is the most efficient. Coase might say that quota shares could be traded, but this entails higher transactions expense than the decentralized trade that occurs with a competitive market price.

The additional inefficiency is happily born by international suppliers who receive a major benefit when a quota is imposed–higher prices. So the quota is a collusive bargain between the Government, the domestic suppliers and the foreign suppliers to raise prices on the consumers at the cost to the economy of two kinds of deadweight social loss. Diffuse harm, concentrated benefit. Can one file a class action law suit against an industry association that lobbies for selfish policy?

Don’t Quota Me

Chinese apparel have been slapped with a quota. Quotas are worse than tariffs, but first here’s a little background.

The rash of China bashing is well-timed to keep the Chinese buying dollars according to Yuan Answers? (WSJ, 6/10, subscription required). A triangular trade where US sends dollars and st0ck and title deeds overseas to the rich savers of the world and imports lots of stuff in one way shipping containers from China is not a bad thing. In fact, it can be sustained indefinitely with the US capital st0ck continuing to grow. It is a testament to how our laws are not quite as bad as everyone else’s.

In economics we talk about how tariffs and quotas both imply a “deadweight social loss”. When prices are artificially raised via a tariff, the customer prices rise and the supplier prices fall. The quantity sold also falls. It is this last part that is the first component of deadweight loss. By reducing the quantity sold, profitable trades without the tariff become unprofitable because they are not profitable enough to beat the “spread” between the supplier and customer prices induced by the tariff. All this is Economics 101.

A quota has an additional element beyond this kind of loss. In a quota, the supply price rises too. That means that any supplier who can produce at the new higher price will try to fulfill their quota. Thus suppliers who would have cut back production under a tariff will continue to produce to fulfill their quota. Everyone is cut back pro-rata (or according to some formula, e.g., 7.5% more than last year even if growth would otherwise be 500%) and not according to who is the most efficient. Coase might say that quota shares could be traded, but this entails higher transactions expense than the decentralized trade that occurs with a competitive market price.

The additional inefficiency is happily born by international suppliers who receive a major benefit when a quota is imposed–higher prices. So the quota is a collusive bargain between the Government, the domestic suppliers and the foreign suppliers to raise prices on the consumers at the cost to the economy of two kinds of deadweight social loss. Diffuse harm, concentrated benefit. Can one file a class action law suit against an industry association that lobbies for selfish policy?

Tipping Point

Now that the French and Dutch have rejected the monstrosity that was the EU constitution, the Poles are now expressing their true feelings about it as well:

“The French and Dutch ‘nos’ encouraged people to openly say they were against the treaty but didn’t dare to admit it until now,” said Mikolaj Czesnik, a sociologist at the Polish Academy of Science.

Before voters in the two founder-member states of the EU rejected the constitution, followed closely by a British decision to put its referendum on the treaty on hold, it was “considered politically incorrect in Poland to reject the treaty,” Czesnik said.

“Some people also feared that a Polish ‘nie’ would lead to accusations that Poland was reponsible for the demise of European integration. Those people felt relieved” by the negative votes, Czesnik said.

It’s hard to imagine anyone wanting to ratify this thing now, at least in a popular referendum, with the possible exception of the Belgians.

More Bias At Google?

They seem to be quite selective about what they find “offensive”:

…while ads for the anti-Clinton book — which featured images of the book’s cover and pictures of the former first couple — were deemed offensive, the company continues to run ads for overtly liberal advertisers with headlines such as “Hate Bush? So Do We,” and “George W. Bush f@rt doll.”

I’m sure it has nothing to do with this, though:

…98 percent of all political donations by Google employees went to support Democrats.

CEO Eric Schmidt gave the maximum legal limit of donations to Democratic presidential nominee Sen. John Kerry and to primary candidate Howard Dean.

Schmidt also contributed the maximum amount to Sen. Clinton, whose role in helping her husband intimidate his female accusers is addressed in the new book.

I think I may switch to Teoma.

Let Them Speak

Federal Air Marshals are suing to have their gag order removed:

The lawsuit alleges that the Federal Air Marshal Service rules are an attempt to smother and prevent the disclosure of information by federal air marshals of agency mismanagement, fraud, waste and abuse. In addition, the lawsuit challenges the Federal Air Marshal Service actions in investigating the Federal Air Marshal Association in an attempt to identify FAMA members, its Board of Directors and other private information about the organization…

…FAMA legal counsel Stephen G. DeNigris called the agency regulations at issue unconstitutional both on their face and in their application. He asserted the regulations were

Devolution of Federalism

We may have passed the High Water Mark of federalism as I predicted back in April. In Gonzales vs. Raich, the Supreme Court is basically showing that it is a political body just like Congress, the Executive and the Federal Reserve. There may be a longer time between turnover on the Court, but the Justices appear to be responding to conscience and not just the rationality of arguments on their face.

What this means for federalism is that as interests evolve to reflect the growing Republican demographic of a richer, but not too rich society. As more and more are better able to provide for themselves, they see that they give more to the government than they take out. Even as Republican Congresses and Administrations provide huge new benefits, they are still perceived as the party of less government. Nice image if you can get it.

Even if it is just poor execution by Democrats and a overevolved sense of fairness, we are likely on a long-term era of Republican Congress and Presidencies. If only for the reason that there is a whip effect of Republicans winning state houses, then redistricting, there will likely be a 20 year hangover in Congress even if imperial overstretch and an abundance of power splits the Republican party.

What this implies for federalism is that the proponents of the debate will flip. National legislation will be championed by the Republicans while state diversity will be championed by the Democrats.

It has become Democrats like Cuomo arguing that an elitist Senate (with small-state overrepresentation and a super-majority requirement) deserves more power than a populist president when it comes to selecting and approving judges. We will see strange coalitions of conservatives and liberals on the Supreme Court denying federalism on legacy issues. The conservatives to lay the groundwork for a future with much narrower states’ rights and the liberals to be true to principles and to salvage short term political victories (or at least hold the line) on individual cases having to do with the vestiges of challenges to Democrat-approved national legislation.

I predict that there will be a litmus test for new judges not to support federalism. If not by this administration, perhaps the next will get it. So those Justices like Thomas and O’Connor that support federalism on the merits will increasingly be joined by fair-weather federalists from the Left and opposed by the new appointees that will be expected to spread national Republican law throughout the land.

A Human Right To Self Defense?

From a long, but interesting scholarly paper by Kopel et al:

…civilian armament has historically been very effective at preventing genocide. Indeed, genocide scholars have found that genocides are carried out almost exclusively against populations which have first been systematically disarmed. Because genocidal regimes consider prior disarmament the sine qua non for beginning a genocide, it seems indisputable that civilian armament deters genocide in most cases. Part IV considers the practical possibilities of arming the Darfur genocide victims…

…we carefully analyze the international law implications of arming genocide victims. Genocide victims who acquired arms, and persons who supplied arms to genocide victims, would almost certainly be in violation of the gun control laws in the country where the genocide was taking place. In addition, the arms acquisition might violate international treaties against bringing arms into a nation without the consent of the national government. Under international law, could the genocide victims and their arms suppliers claim that their actions were nevertheless legal? We answer