Will China Help End U.S. Farm Subsidies?

This morning, U.S. Trade Representative Mike Froman appeared before the Senate Finance Committee to talk and answer questions about U.S. trade policy.  Most of the questions centered around trade promotion authority, the Trans-Pacific Partnership, and how best to further the interests of industries or commodity groups that lobby Senators.  One popular way to phrase a question is to accuse other countries, especially China, of unfairly propping up their own industries and then asking how the administration is going to counteract that.

So it was that Senator Johnny Isakson (R-GA) asked Ambassador Froman about China’s cotton subsidies.

China is basically hoarding … buying cotton and hoarding it, and is stockpiling it.  And they’re subsidizing their producers at twice the world market price.  What can be done with China to enforce through the WTO or through any agreements we might otherwise have to keep them from manipulating the cotton prices and suppressing the cotton market?  

This accusation is kind of funny.  The United States is by far the world’s leading exporter of cotton.  We also subsidize that cotton like crazy.  Admittedly, the U.S. government props up domestic agriculture in slightly more complex and opaque ways than simply hoarding cotton, but if Senator Isakson wants to end distortions of global cotton prices, he could just stop voting for them.

Ambassador Froman’s response:

Well I think this is a very important point more generally, which is that the whole pattern of agricultural subsidies has changed a lot over the last 10 or 15 years.  When the Doha Round started, the focus on agricultural subsidies was really the United States and the European Union.  But in both of those areas, subsidies have come down, while subsidies from China and India in the agriculture area have increased, and by some measure China’s now the largest subsidizer of cotton.  And so we’re engaging with them and we had conversations also in the last couple days about that and about taking a fresh look at where subsidies are being provided, how it’s distorting the market, and how that should play into global trade negotiations.  I think it’s important that we update our view of where subsidies are coming from and what impact it has. 

If you’re a poor subsistence farmer in Africa, it doesn’t matter whether the subsidy’s coming from the U.S. or from China; it matters that the subsidy exists.  And so we’re hoping to engage with China on this and to create some disciplines around this.

Even the Benefit of the Doubt Won’t Save EPA’s Mercury Rule

Challenging an agency’s assessment of scientific research in court is typically seen as a fool’s errand. The courts may keep the regulatory state on a close leash where matters of constitutional law are concerned, and will give challenges regarding the proper interpretation of statutes a fair hearing before (usually) deferring to the government’s view. But an agency has to go seriously off the rails before the courts will second-guess its assessment of the scientific record underlying a regulation.

That’s what makes EPA’s super-expensive Mercury and Air Toxics Standards (MATS) rule so interesting: the agency’s own assessment of the scientific research shows there was no good reason to regulate in the first place. The Supreme Court is now reviewing EPA’s decision to plow ahead regardless, irrespective of the costs of doing so.

The Cato Institute’s amicus brief in Michigan v. EPA unpacks EPA’s own scientific assessment to show that regulation certainly is not (as the statute requires) “appropriate and necessary.” 

Power plants emit trace amounts of mercury, and mercury poses a risk to human neurological development when pregnant women consume fish tainted by it. But, as EPA has explained, mercury deposition in the United States “is generally dominated by sources other than U.S. [power plants].” In fact, the agency’s figures show that those plants are responsible for only about one half of one percent of airborne mercury.

Common sense would therefore suggest that reducing or even eliminating emissions from U.S. plants could have little or no appreciable effect on public health. And EPA actually agrees, finding that “even substantial reductions in U.S. [power-plant] deposition…[are] unlikely to substantially affect total risk.”

Is Ridesharing Safe?

Since the emergence of rideshare companies such as Uber and Lyft there has been a steady stream of commentary and news concerning their safety. When it comes to driver background checks, insurance, privacy, and vehicle inspections some claim that rideshare rides pose a greater threat to passengers than taxi rides.

In my Policy Analysis “Is Ridesharing Safe?” I examine the safety concerns related to ridesharing. While there are legitimate safety concerns, rideshare companies offer insurance coverage that compares favorably to the coverage for many taxis and are oftentimes more strict than taxi companies in regards to driver background checks. In fact, not only do ridesharing companies implement strict background check requirements, they also use features such as two-way rating systems that encourage good behavior on the part of both the passenger and the driver.

From the Paper:

An analysis of the safety regulations governing vehicles for hire does not suggest that ridesharing companies ought to be more strictly regulated. It does highlight, however, that in many parts of the country lawmakers and regulators have not adequately adapted to the rise of ridesharing, which fits awkwardly into existing regulatory frameworks governing taxis.

Read the full Policy Analysis here.

Frenemy Saudi Arabia Makes the World More Dangerous

Saudi Arabia is a medieval system whose horrid human rights practices match its antiquated political system. Official Washington breathed a sigh of relief at the smooth transition after King Abdullah died last week. President Barack Obama is visiting Riyadh to pay his respects.

Secretary of State John Kerry called the departed king a “man of vision and wisdom.” President Barack Obama declared that Abdullah “was always candid and had the courage of his convictions.”

U.S. officials long have celebrated their friendship with the Saudi royals, who sit atop vast oil reserves. Even more important, the American military continues to act as the Saudi royals’ bodyguard.

President George H.W. Bush inaugurated the first Gulf War as much to safeguard Saudi Arabia as liberate Kuwait. He left a garrison in Saudi Arabia later targeted by the 1996 bombing of the Khobar Towers barracks. America’s presence on sacred Saudi soil was one of Osama bin Laden’s grievances.

While American officials are conflicted by the tension between democracy and stability, the Saudis suffer no such indecision. Essentially a totalitarian dictatorship at home, the House of Saud favors whoever and whatever reduces threats to the monarchy abroad.

Feds’ Database Enables Spying On Americans’ Cars In Real Time

Per documents released in response to FOIA requests from the American Civil Liberties Union, the federal government has built a large database using automatic license-plate readers to enable tracking of vehicles in real time (not just in the course of later investigation) and nationwide (not just near borders), a more extensive program than might have been guessed from earlier piecemeal disclosures. According to this morning’s Wall Street Journal, which breaks the story, the program “collects data about vehicle movements, including time, direction and location, from high-tech cameras placed strategically on major highways.” The resulting photographs are “sometimes” clear enough to identify drivers or passengers. “One email written in 2010 said the primary purpose of the program was asset forfeiture.” Although the program is run by the Justice Department’s Drug Enforcement Administration, its data is increasingly shared for investigations unrelated to drugs.  

Repeating News Story: Global Warming To Make Blizzards Worse

Over the next couple of days, as the Nor’easter honing in on the New England coast matures and eventually unleashes its winter storm fury, you are going to be subject to a lot of global warming hype.

After all, the climate change alarmist credo is: let no extreme weather event pass without pointing out that it is “consistent with” climate change caused by human industrial society.

The push has already begun.

But this time around, the pushback is also well-prepared.

While the “curator” of the Washington Post’s newly-minted online “Energy and Environment” section Chris Mooney tells us in his article that global warming may make blizzards worse by increasing the temperature of the western Atlantic ocean and thereby increasing the moisture feed into the developing storm, meteorologist Ryan Maue is quick to point out that just the opposite is likely the result—that the elevated sea surface temperatures actually act to make such storms tamer.

Maue goes on to add that it is “easy to make case that global warming weakened this blizzard significantly due to warmer [sea surface temperatures].”

While Ryan is probably being a bit optimistic here, the reality is that this blizzard (in fact pretty much all storm events) are the result of a very complex system of physical interactions—the precise behavior of each one of which is not completely understood, much less perfectly predictable. This makes ascertaining the influence of human-caused climate change virtually (if not entirely) impossible.

The Failed HealthCare.gov Launch

The launch of HealthCare.gov in 2013 was a disaster. A new report from the Health and Human Services Inspector General (IG) describes how the department mishandled the website’s construction. The department failed to follow federal contracting rules, and did not have a cohesive plan for the website. This led to cost overruns and project delays, and HealthCare.gov’s eventually rocky start.

The Center for Medicare and Medicaid Services (CMS) was given primary responsibility within HHS for HealthCare.gov launch. For the report, the IG reviewed 60 CMS contracts for the project. These contracts were awarded to 33 different companies.

One problem with these contracts was not designating a single company as the project lead. According to the IG, CMS “missed the opportunity” to designate a “single point-of-contact with responsibility for integrating contractors’ efforts and communicating the common project goal to all 33 companies.” A project of this complexity needs a central command to oversee project development. CMS failed to assign one.  

Another problem was that CMS only sought bids from a small group of previously-used companies. CMS claimed this was to speed along the contracting process, but it left the agency with limited options. For instance, CMS received only four bids for one of the main contracts. Three were determined to be technically insufficient leaving CMS with only one choice, CGI Federal. In other instances, CMS only solicited or received bids from one company.

Additionally, CMS did not consider the previous contractor performance for many bids even though federal contracting rules require it. CMS did not access the main performance management database in the case of CGI Federal, which had had previous missteps with the department.

Compounding the mistakes, CMS selected contract types that put the government, not the contractor, at risk in the case of cost overruns for five of the six main contracts. Taxpayers are paying dearly for CMS’ choice. One contract grew from $58 million to $207 million. The six major contracts for HealthCare.gov grew in costs from $464 million to $824 million.

The IG summarized the findings:

When awarding the Federal Marketplace [HealthCare.gov] contracts, CMS did not meet all requirements and did not leverage all available acquisition planning tools, oversight activities, or contracting approaches to identify and mitigate risks…Because CMS did not leverage all of these tools, it operated without a comprehensive roadmap when awarding the Federal Marketplace contracts.

Construction of HealthCare.gov was a complex technical project. CMS’ mismanagement made the task even more difficult and even more expensive.  

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