Archives: May, 2007

Scandalous Pensions for European Parliamentarians

By
Daniel J. Mitchell

While the US Congress is infamous for its taxpayer-subsidized perks, US lawmakers are amateurs compared to the scammers in Brussels. Members of the European Parliament have a lavish taxpayer-financed retirement scheme that enables them to get $2 of taxpayer money for every $1 they put into their pension fund. But this immense perk does not even require them to necessarily use their own money. As the UK-based Telegraph reports, some MEPs – perhaps most MEPs – use office administrative funds:

The European Parliament’s bureau, the body that oversees the assembly’s administration, has voted to prevent publication of a list naming the 475 MEPs who benefit from a pension scheme worth more than £1,400 a month to Euro-MPs with the taxpayer matching every euro personally contributed with two from the public purse. Payments are controversial because, for “administrative reasons”, the MEP’s personal contributions are taken automatically from office expenses. No one checks whether the politician actually pays anything into the fund from his own salary. Many in Brussels believe that a “large proportion” of Euro-MPs are using their office payments to get a free second pension on top of national schemes.

Topics: 
General, International Economics and Development, Tax and Budget Policy

New Report Unwittingly Reveals Small Impact of China Trade on U.S. Jobs

By
Daniel Griswold

Our friends and ideological rivals at the Economic Policy Institute in Washington are releasing a report this week that supposedly documents that trade with China has cost more than 2 million Americans their jobs. The report is illuminating, but in ways its author did not intend.

Here’s how EPI’s press release on the study describes its results:

The dramatic rise in the United States’ trade deficit with China from 1997 - 2006 has cost jobs in every region in the country.  In a new report, Costly Trade with China, to be issued May 2, 2007 by the Economic Policy Institute, economist Robert Scott reports the growth of the trade deficit with China in this period has displaced production that supported 2,166,000 U.S. jobs, with New England being the hardest hit region of the country. 

For reasons I’ve explained in detail before [.pdf], EPI’s methodology for calculating job losses from trade is fundamentally flawed. Its model ignores the dynamic effects of trade on U.S. economic growth, the beneficial effects of foreign investment, and the tremendous and healthy “churn” of the U.S. labor market.

Even if we accept EPI’s calculation of 2.2 million jobs lost, that is a drop in the bucket in an economy that employs almost 150 million people. Note that EPI’s number is spread over a decade, meaning that the actual number of jobs lost each year on average would be 216,600.

Compare that to the 320,000 or so Americans who line up EVERY WEEK to claim unemployment insurance after being displaced from their jobs–mostly because of technology, and domestic competition. In other words, trade with China, even by EPI’s exaggerated measure, accounts for about three business days’ worth of unemployment claims in a typical year.

More than compensating for the relatively small job displacement caused by trade with China are the huge benefits it delivers through lower prices at the store, lower interest rates, growing export opportunities, and greater peace and stability in East Asia.

For more on trade with China, check out our research at www.freetrade.org.

Topics: 
General, International Economics and Development, Trade and Immigration

Auerswald on “The Irrelevance of the Middle East”

By
Justin Logan

Philip E. Auerswald of the George Mason University’s Center and Science and Technology Policy has an interesting piece in the current issue of The American Interest (sub. req’d). In it, Auerswald argues that

the long-term importance of the Middle East is roughly proportionate to the share of the world population for which the region accounts–less than 5 percent. The time is long overdue for policymakers and analysts alike to put the many urgent issues that confront the people of the Middle East in the context of dramatic and unprecedented global transformations in process today. …Any country that persists in focusing intently on peripheral concerns risks ultimately becoming peripheral itself. Even a massive power like the United States is not immune to such a fate.

Shorter version of the Auerswald argument here, and go here for Eugene Gholz and Daryl Press’s excellent Policy Analysis for Cato of the many problems of “energy alarmism.”

Topics: 
Energy and Environment, Foreign Policy and National Security, General

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