Archives: 05/2008

Antiwar Republicans Win in NC

Over at The American Conservative blog, Jim Antle points out that Rep. Walter Jones, an antiwar Republican incumbent, as well as another antiwar Republican, B.J. Lawson, won big in last night’s North Carolina primary.

Although the Republican establishment in Washington seems to have sacrificed every other governing principle at the altar of reckless militarism, it appears that a contingent of Republican voters haven’t. Maybe Bill Kauffman is onto something

No Way to Treat the Customers

Suppose you work for a company experiencing phenomenal revenue growth. Most of that growth is attributable to rapidly increasing sales to new customers with potentially limitless demand for your products.

Then the CEO unveils next year’s strategic plan, which includes actions likely to offend and financially injure those new customers, causing them to take their business elsewhere and jeopardizing your company’s future.

If you work in almost any goods-producing industry in Indiana or North Carolina, the above is not hypothetical. It is precisely what you confront if either Senator Clinton or Senator Obama becomes the next president.

You see, both candidates profess deep skepticism about international trade. Both plan to halt new trade agreements and to force our partners to renegotiate existing deals. Both support provocative, unilateral actions that would ultimately hurt American producers, consumers, and investors. And both insinuate that our trade partners are untrustworthy adversaries.

But Indianans and North Carolinians should recognize those trade partners as something different – like their fastest-growing customers.

Indiana’s producers shipped $26 billion worth of goods to foreign customers in 2007, which was 14 percent more than the year before and 80 percent more than in 2001. Since 2001, the state’s exports have grown at a rate one-third faster than U.S. exports overall.

North Carolina’s producers shipped $23 billion worth of goods to foreign customers in 2007, which was 10 percent more than the year before and 59 percent more than five years ago.

In 2007, exports accounted for 20 percent of U.S. manufacturers’ total sales revenues -— the highest percentage in modern history. And nowhere in America is manufacturing more important to the economy than it is in Indiana, where the sector accounts for over 30 percent of the state’s gross domestic product. Manufacturing accounts for 22 percent of North Carolina’s economy, ranking it fifth in that measure.

In China, Canada, and Mexico – the primary villains in the candidates’ antitrade narratives – Indiana’s and North Carolina’s producers are building relationships that are yielding extraordinary returns. Exports from Indiana to China increased by a whopping 36 percent between 2006 and 2007 (twice the rate of total U.S. export growth to China) and nearly quadruple Indiana’s exports to China in 2001. Indiana’s exports to our NAFTA partners (Canada and Mexico) grew 9 percent from 2006 and 67 percent from 2001, eclipsing overall U.S. export growth to NAFTA in both periods.

Exports from North Carolina to China increased a spectacular 32 percent between 2006 and 2007 (nearly twice the rate of total U.S. export growth to China), and its exports to NAFTA customers grew 46 percent to $7.4 billion over the past five years.

This export growth is not concentrated is one or two industries either. Out of 32 broad industry groupings, 28 in Indiana experienced export growth between 2006 and 2007 and 30 experienced growth between 2001 and 2007. Of the 28 industries showing export growth between 2006 and 2007, 23 experienced double- or triple-digit percentage growth.

In North Carolina, 25 of 32 industries experienced export growth between 2002 and 2007 and the growth rates were at least double-digit for each industry. Over the past year, 23 industries in North Carolina experienced double-digit export growth rates.

From the largest goods-producing industries to the smallest, in Indiana, North Carolina, and, indeed, throughout the country, strong export growth is evident. A study just published by the U.S.-China Business Council found that 406 of 435 congressional districts experienced triple-digit export growth to China between 2000 and 2007. Those figures and other facts from the study were highlighted in a Wall Street Journal editorial today.

Blaming trade for all that ails is a time-honored political tradition. Acting on that impulse by imposing trade barriers or otherwise retreating from the global economy is never the proper course, but it would be particularly foolish in the current environment, where industry after industry is experiencing and benefiting from an export boom.

That boom couldn’t be happening at a better time. In the past, when the U.S. economy slowed, the world economy slowed along with it. But with the recent awakening of demand in long-slumbering developing economies, growth remains strong in many parts of the world. The U.S. economic slow down might therefore be short-lived, as export growth keeps the economy moving ahead. That is unless policymakers do something to risk U.S. access to foreign markets.

Treating the customers with disdain and hostility just might be the plan that kills the golden goose.

I Thought the Schools Were Starving?

Everyone knows that our public schools are underfunded, right? So why do they keep blowing easy money?

You might recall that last week the Miami-Dade School District turned down a principal’s offer to work for a single dollar on the grounds that the district would have to put his salary in the budget anyway. Good bye, $119,999! Today, The Seattle Times reports that the state of Washington is forfeiting a $13.2 million grant for Advanced Placement teachers because the people running the grant program want to pay teachers directly for participating in their training. The problem? “Washington’s collective-bargaining laws require that teacher pay be negotiated between unions and school districts.”

Our public schools, no matter what bureaucrats and unions tell us, are not underfunded. If they were, though, the whiners would largely have themselves to blame.

Genuine Unsolicited Testimonial for Cato University

Bill Eilberg, a Club for Growth member who attended Cato University last year, sent this review into the Club blog:

I’m not one who easily sits through lectures, but at Cato University, I can honestly tell you that my attention span was at its highest level, as I listened more intently than I ever had done in college or law school.

I note that Rob McDonald is on the faculty again this year. Rob is one of the most talented speakers one will ever hear. His discussions on American history are positively riveting. I will never forget listening to his poignant account of how George Washington quelled a potential revolt by his officers, taking out his reading glasses to quote from a text (it is a story you may have heard already, but Rob is a master at retelling it). If I had the opportunity, I could listen to him for hours.

Bill is certainly right. Cato University gets rave reviews every year. Once again this July, it will be held at the beautiful Rancho Bernardo Inn near San Diego. Speakers will include Tom Palmer, Peter Van Doren, Gene Healy, and Michael Cannon of Cato. Reporting from around the world will be former Putin adviser Andrei Illarionov, German economist Karen Horn, elcato.org editor Gabriela Calderon, and Zimbabwean opposition leader Rejoice Ngwenya. And reporting from 1776, the aforementioned Professor McDonald.

Sign up now.

Florida Education Tax Credit Cap Raised

Florida lawmakers struck a deal (.pdf) to raise the cap on the state’s scholarship donation tax credit program by $30 million dollars last Friday, the last day of the legislative session. Under the program, businesses that donate to nonprofit scholarship organizations for poor children can claim a tax credit for the value of the donation. For the past seven years, these scholarships have been bringing private schooling within reach of families that couldn’t otherwise afford it.

But while the legislature has raised the cap on donations, that doesn’t meant the program will expand automatically. In order for the program to grow, more low income parents have to ask for the scholarships, and more businesses have to choose to make donations. The program is completely voluntary. So far, the interest definitely seems to be there: the program doubled in size over the past three years, to nearly 20,000 children.

Scholarship tax credits are a tremendous boon to low income families, businesses, and taxpayers all over the state. They broaden educational options for poor kids, let businesses directly help their communities, and for every student who chooses a private instead of a public school, they save taxpayers thousands of dollars. The maximum scholarship size allowed under the program will now be $3,950 (up from $3,750) – less than one third of total per pupil spending in Florida public schools (which was $12,263 in 2006-07, according to Richard Harbin of the Florida Dept. of Ed. – hat tip to my research assistant, Elizabeth Li).

The fact that parents are clamoring for a $4,000 scholarship to help their children escape from public schools that spend over $12,000 per year says a lot about the need for expanded educational options. No single system of schools can ever serve all children well. In education, as in so many other things, one size does not fit all.

Let’s hope governor Crist signs the new bill into law.

Expert Opinion

The back page of the Week in Review section of yesterday’s NYT features a symposium on “How to See This Mission Accomplished,” in which the Times asked nine experts to address problems going forward in Iraq.  Since at least five of the nine were enthusiastic backers of the war – and three work for the American Enterprise Institute – this is something like asking the captain of the Exxon Valdez* for his considered judgment on how best to conduct the cleanup.  Hey NYT: next time, why not consult someone who got it right

* Ironically enough, the Valdez’s Wikipedia entry places one “Able Seaman Robert Kagan” at the helm during the crash.  They’re everywhere