Archives: 02/2011

R.I.P. Bill Monroe, a First Amendment Champion

Bill Monroe, who was moderator for NBC’s Meet the Press for about 10 years, has died at 90. The Washington Post does a fine job with his long career, from his pro-civil-rights journalism in Lousiana in the 1950s to his years with NBC and Meet the Press.  

I want to draw attention to his longtime advocacy of extending the First Amendment to broadcasting. Actually, I’m sure he thought that the First Amendment did cover all forms of the news media — but he knew that Congress and the courts didn’t see it that way, so he wanted an explicit amendment to make that clear. Because his articles on this topic were published in the pre-Internet Dark Ages (yes, children, there are great ideas not online), I can’t link to any of them. 

He spoke at the Cato Institute in 1984 on the topic:

The First Amendment sets up a clear-cut independence of press from government as the journalistic principle most vital to the American people.  But the existing regulatory approach to broadcasting offers exactly the opposite formula:  government guidance and government rules to protect the American people from independent journalism. The First Amendment idea and the regulation idea are mortal enemies.

And in 2007 he briefly reprised the argument in the letters column of the Washington Post, concluding:

Broadcasters are also open to government pressure through the Federal Communications Commission, whose members are appointed by the president. Newspapers are specifically protected against government interference by the granite wall known as the First Amendment.

When the present form of broadcast regulation was set up early in the previous century, nobody understood what powerful instruments of news and information would evolve from the primitive radio stations of that day. Now that we do understand it, we can repair that historic mistake. We can extend the clear, stirring language of the First Amendment to equal protection for freedom of the electronic media. The problem of allocating broadcast licenses does not have to cost the American people the benefit of free broadcasting.

R.I.P.

Tony Soprano Meets the Antidumping Law

Forget all the high-minded rhetoric about “fair trade” and “level playing fields.” Discount the apple-pie claims that the antidumping law protects good American companies and their hard-working employees from unscrupulous, predatory, foreign cheaters. Those are just some of the myths that have sustained the costly antidumping status quo for decades.

If the American public were familiar with all of the sordid details of the antidumping case concerning wooden bedroom furniture from China (which I called a Poster Child for Reform back in 2004), they would be angry and ready to change the law.  Well, on Tuesday, the Wall Street Journal did its part by running a story about how U.S. producers of wooden bedroom furniture have been extorting cash from their Chinese competition in exchange for dropping pursuit of even higher antidumping duty rates at the Commerce Department.

The Journal reported that about $13 million was paid to a group of 20 U.S. furniture makers between 2006 through 2009, and that a much larger, but unspecified, amount of money went to pay the U.S. firms’ lawyers.

Surprisingly, this practice is not illegal. Charlotte Lane, one of six commissioners at the U.S. International Trade Commission, which presides over antidumping investigations and sunset reviews, said, “I cannot figure out for the life of me how they are legal.” And her colleague, Commissioner Dan Pearson added that these settlements create “additional costs and distortions” in furniture trade, “with little evidence that these distortions have yielded any benefits to the industry overall, the U.S. consumer, or the U.S. taxpayer.”

But this practice is nothing new. It’s been going on in the shadows for several years in other cases as well. Bill Silverman, a trade lawyer who represents furniture retailers and importers, offered: “Everybody in the industry in the U.S. and China understands that these payments are clever shakedowns.”  Back in 2006, I wrote about similar “shakedowns” with hundreds of exporters from several countries in the shrimp antidumping cases (toward the end of the paper under the subheading, “A Sign of Things to Come?”)

This pay-to-play scheme is made possible by the peculiarities of the U.S. antidumping system. The United States has the distinction of being the only major economy in the world that uses a “retrospective” system for collecting final antidumping duties on imports. That means that importers pay estimated antidumping duties on goods when they enter the United States, but the final liability is not known until much later—often 18 months to several years later. This system creates enormous uncertainty for importers and works effectively to supercharge the impact of U.S. antidumping measures.

Every year the Commerce Department invites parties involved in antidumping cases to request reviews of the most recent year’s imports to determine the actual amount of dumping for that year, and to set new deposit rates going forward. (More detailed description here.) Neither petitioners nor the respondent companies are required to request a review, and if no requests are made within a given time frame, the duty rates already in effect continue.

So, if a foreign exporter has a 10 percent antidumping duty rate on his products, but is managing to continue making sales in the United States, he might not want to request a review of the previous year’s sales, which could establish a higher final liability and a higher deposit rate going forward. But petitioners can request a review of those sales. In the furniture and shrimp cases, petitioners requested reviews of dozens of companies that “could live with” the rates they were paying, thereby introducing the specter of greater uncertainty, more legal and other expenses, and the risk of higher duties. That’s when petitioners offered to rescind those review requests in exchange for payments.

Now, if that doesn’t amount to extortion (link definition), I’m not sure what does.

As I wrote about the shrimp cases in 2006:

Most foreign companies accepted the deal, which arguably was the better option for both parties in each deal. But there is clearly something unseemly about the domestic industry extorting large sums of money from foreign shrimp producers under threat of burying them in heavy legal costs and the uncertainty associated with the Commerce Department’s calculating new antidumping rates. There is also something ominous about the relative ease with which the petitioners’ bar was able to effectively sell access to the U.S. market and split the proceeds with U.S. companies.

Although the Byrd Amendment was found in violation of the ADA [Antidumping Agreement] and will cease to operate next year, the petitioners’ lawyers seem to have concocted a model for effectively resurrecting Byrd. With this success under their belts, petitioners’ lawyers have a new way to market antidumping actions to their current and prospective clients.

These extortions are only the latest shenanigans in the wooden bedroom furniture case. Antidumping is portrayed as a tool to protect “our” producers from “their” producers. But the primary targets in the furniture case were other U.S. furniture producers.  As I wrote in 2004:

The case of Wooden Bedroom Furniture from China has nothing to do with unfair trade and is a perfect example of the need for antidumping reform. The filing of this case was a tactical maneuver by one group of domestic producers that seeks to exploit the gaping loopholes of the antidumping law to get a leg up on its domestic competition. Domestic producers realize that the only way to compete and offer their customers variety is to source at least some production from abroad. Instead of preserving or returning domestic jobs (which is the public justification for the petition) import restrictions will cause a shift in sourcing from China to places like the Philippines, Indonesia, Brazil, and Vietnam–places from which many of the petitioners have begun or are poised to begin importing themselves.

The antidumping law is nothing like what its supporters claim it to be.  Its operation works to the benefit of a few industries and crafty insiders at great cost to the rest of the economy.  Let’s hope the Journal article sparks the kind of outrage that will propel serious antidumping reform in the United States.

I Believe the Children Are My Mealticket…

Not knowing what’s in any given person’s heart, it’s impossible to say this definitively. However, being very familiar with generally self-interested human nature, it is reasonable to be highly dubious.

Dubious about what? That striking…er, “sick” …teachers in Wisconsin, and especially their union reps, have the welfare of children foremost in mind as they skip school to protest possible crimps on union monopolies and calls for teachers to contribute more for their benefits. Yet that is what Milwaukee Teachers’ Education Association President Michael Langyel would have us believe, at least if this quote from a Fox News article is accurate:

If people say the only way to solve this budget crisis is to take away from people who are working hard, they are wrong. We believe that we have a right to have a fair wage for our hard work. More importantly, the collective bargaining process allows us to positively impact school policy issues. We are the advocates for our students, and we will maintain our voice in defending our students.

Now I feel a little sick.

There is nothing inherently wrong with trying to get well compensated (though the portrayal of teachers as just trying to get a “fair wage” is a little rich given that on an hourly basis they make more than such professionals as accountants and insurance underwriters). But please, spare us the heroic tripe about this being about “defending” students. Teachers paying relatively little for their benefits, and even worse, allowing unions to maintain a monopoly over teachers — some of whom probably deserve to get paid much more than the union-negotiated rate — is not at all about defending students. It’s about teacher, and especially union, self-interest, pure and simple.

ObamaCare’s New Freedom

Earlier this month, President Obama’s HHS Secretary Kathleen Sebelius took to the Washington Post’s op-ed page to reassure everybody that ObamaCare “puts states in the driver’s seat” and “gives states incredible freedom to tailor reforms to their needs.” 

One grows weary of exposing the brazen falsehoods this administration incessantly and unconscionably peddles about its corrupt, unconstitutional, and irredeemable health care law.  But here I go again: the very idea that ObamaCare puts states in the driver’s seat is nonsense. States already had the power to enact all the taxes, mandates, and price controls that ObamaCare expects them to implement — and to make what few choices ObamaCare leaves them. 

If you want to know what Incredible Freedom really means, look to Wisconsin, where President Obama — who is evidently bored with the federal budget — has inserted himself into a state budget dispute, as David Boaz has noted

As it turns out, Incredible Freedom means you are free to do exactly what President Obama wants. 

The Washington Post reports on talk of federal bailouts for states (like Wisconsin) that are struggling with huge deficits and unfunded liabilities in their state pension and retiree health care programs.  However: 

The White House has dismissed such speculation, saying states have the wherewithal to raise taxes, cut programs and renegotiate employee contracts to balance their books

A startling admission.  Perhaps someone in the White House can pull Sebelius aside and explain that states also had the wherewithal to enact all the “reforms” that ObamaCare imposed on them.  States already were “in the driver’s seat.  They already had the power “to tailor reforms to their needs.” 

Then along came ObamaCare.

Two, Three, Many Wisconsins

Newly elected Wisconsin governor Scott Walker has introduced what he calls a “budget repair” plan that would, among other things, require state employees to pay about 5.8% toward their pension (about the private sector national average) and about 12% of their healthcare benefits (about half the private sector national average) and restrict the collective bargaining powers of government-employee unions. In response, as many as 25,000 state workers and their supporters have been protesting in and around the state Capitol.

Today the Washington Post reports in a banner headline,

Obama joins Wisconsin budget battle

Yes, the president of the United States is inserting himself into a medium-sized state’s battle over how to balance its budget. And not just the president, but his entire political machine and its national labor union allies:

President Obama thrust himself and his political operation this week into Wisconsin’s broiling budget battle, mobilizing opposition Thursday to a Republican bill that would curb public-worker benefits while planning similar action in other state capitals.

Obama accused Scott Walker, the state’s new Republican governor, of unleashing an “assault” on unions in pushing emergency legislation that would nullify collective-bargaining agreements that affect most public employees, including teachers.

The president’s political machine worked in close coordination Thursday with state and national union officials to mobilize thousands of protesters to gather in Madison and to plan similar demonstrations in other state capitals….

By the end of the day, Democratic Party officials were working to organize additional demonstrations in Ohio and Indiana, where an effort is underway to trim benefits for public workers. Some union activists predicted similar protests in Missouri, New Jersey and Pennsylvania….

The White House political operation, Organizing for America, got involved Monday, after Democratic National Committee Chairman Timothy M. Kaine, a former Virginia governor, spoke to union leaders in Madison, a party official said.

The group made phone calls, distributed messages via Twitter and Facebook, and sent e-mails to its state and national lists to try to build crowds for rallies Wednesday and Thursday, a party official said.

It’s always easier to organize special interests than unorganized taxpayers. It wouldn’t be easy to get 25,000 taxpayers, who have lives and jobs and a variety of concerns, to rally at the state capital for budget reform. And it won’t be easy for one governor and Wisconsin’s Republican legislators to fight the entire national Democratic Party, the AFL-CIO and other giant unions, and the Obama machine.

But maybe if other governors took up the same battle, if Gov. Chris Christie in New Jersey and Gov. Rick Scott in Florida and Gov. Brian Sandoval in Nevada and Gov. Tom Corbett in Pennsylvania – and even Gov. Andrew Cuomo in New York and Gov. Jerry Brown in California, both of whom are smart enough to know why their states are running multi-billion-dollar deficits – take on the government unions, then maybe the Washington-based political machines won’t have the capability of responding everywhere at once. Two, three, many Wisconsins!

By the way, the strikingly uncivil posters comparing Governor Walker to Hitler and Mubarak, and the classic “Don’t Retreat, Reload” slogan along with Walker’s picture in cross hairs, take on greater relevance with the revelation that there’s so much support and organization of these protests coming from sophisticated national politicos.

Really Wrong Door Raid

The DEA and San Francisco Police Department conducted a really wrong door raid:

The SFPD and DEA found no piles of marijuana money at 243 Diamond St., one of six addresses raided simultaneously in San Francisco that morning. Instead, they found Clark Freshman, who rents the penthouse at the two-unit building. Freshman, a UC Hastings law professor and the main consultant to the television show Lie to Me, was put into handcuffs while in his bathrobe as agents searched, despite Freshman’s insistence that they had the wrong place and were breaking the law…

Soon they may be called defendants in a lawsuit. A furious Freshman has pledged to sue the DEA and the SFPD for unlawful search and seizure of his home…

[Officer] Biggs describes 243 Diamond as a “two-story, one-unit” building in the warrant. There’s no mention of Freshman or Larizadeh’s son-in-law or seven-months pregnant daughter who were detained in the downstairs unit that morning. But property records — and a quick visual scan of the property — reveal it to be a three-story, two-unit building. That mistake alone may be enough to invalidate the search warrant.

Read the whole thing. Professor Freshman’s closing quote is priceless. (H/T Uncle)

Getting Out of Afghanistan

Today’s Washington Post features an op-ed by Reps. James McGovern (D-MA) and Walter Jones (R-NC) on the U.S. mission in Afghanistan. This particular bipartisan pairing isn’t particularly noteworthy; the two men have collaborated before. But the arguments presented in the piece — one set designed to appeal to conservatives, the other aimed at liberals — have the potential to join together a much broader left-right coalition in opposition to an open-ended mission that, according to McGovern and Jones, has already cost U.S. taxpayers $450 billion dollars, and whose costs are accumulating at a rate of nearly $10 billion every month.

My colleagues and I have argued on numerous occasions for why the Obama administration should refine our objectives in Afghanistan. The issue isn’t about getting out of the country, per se, but rather about what we are asking our brave troops to do there. We owe it to them to give them a mission that is achievable within a reasonable time frame. Policy makers in Washington must be reasonably certain that the mission advances U.S. security, and that alternative strategies that have a higher likelihood of success and/or less cost have been thoroughly considered.

I don’t believe that they have been. There is ample evidence to suggest that our attempt to build a functioning nation-state in the Hindu Kush is likely to fail. Most nation-building missions do fail, and the conditions for success — especially a functioning economy and a capable, representative government that enjoys broad-based support — simply do not exist in Afghanistan, and won’t for a very long time.

Above all else, the McGovern-Jones op-ed is an appeal to the American people and to their representatives in Congress to pay attention to what is happening in Afghanistan, and to think deeply about the mission. For a window into what that mission actually looks like, check out the HBO special “The Battle for Marjah.” The similarities between what the brave troops of Bravo company dealt with in the spring and summer of 2010, and what other units were doing in 2009, as documented in this Frontline program, are striking. I don’t know how anyone can watch either of these programs and be confident that we are making progress. And I especially don’t know how you can watch these and not share the frustrations of our troops.

And if those video snippets aren’t sufficient to convince you to rethink what we’re doing in Afghanistan, and to question whether we really are making progress, the numbers tracking the last two years there are only worse.