Archives: 08/2015

Free Trade Within Canada

I blogged last year about efforts to promote free trade within Canada, through an improved “Agreement on Internal Trade.” Some Canadians are now attempting a new approach to addressing this problem: Invoking the Canadian Constitution.

Here’s what happened to trigger the constitutional litigation, via the Canadian Constitution Foundation:

On October 6, 2012, New Brunswick resident Gerard Comeau decided to go to Quebec on a booze run. As a result of his trip, Mr. Comeau was surprised to find himself charged with violating New Brunswick’s Liquor Control Act.

Here is the strange part: Mr. Comeau’s purchase of beer and liquor in Quebec was entirely legal. His alleged crime was bringing it home to New Brunswick.

Mr. Comeau was stopped in Campbellton, New Brunswick just after crossing the bridge spanning the Quebec-New Brunswick border. He had been followed by the RCMP while he made two stops to buy liquor in Quebec. He was charged with violating the ban on bringing in more than 12 pints of beer or liquor from an out-of-province source (per s. 43 of the Act). As a New Brunswick resident, you can legally buy larger amounts only from a New Brunswick Liquor Corporation store. This crown corporation holds a legally enforced monopoly on liquor sales in the province, and it effectively protects its monopoly across provincial borders through the Liquor Control Act’s prohibitions on importation.

So what does the Canadian Constitution say about all this?  Section 121 of the Constitution Act, 1867 states that: “121. All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”  You might think that would be enough to ensure free trade, but apparently there is a 1921 Supreme Court decision narrowly interpreting the provision so that it only prohibits customs duties imposed at the border.

The Bad and Ugly of the GOP’s Foreign Policy, Part II

The Republican presidential race is heating up and Florida Sen. Marco Rubio is talking foreign policy. Alas, he believes intervention and war to be a first resort and seems willing to sacrifice American lives, wealth, and prosperity for almost any reason.

Rubio shares the common delusion on the Right that the world has grown more dangerous since the end of the Cold War. Actually, the end of the Soviet Union and Warsaw Pact has made it much safer for America.

Rubio claimed that “Turmoil across the world can impact American families almost as much as turmoil across town.” But that is only if the United States allows it. During most of America’s history, Washington avoided involvement in foreign tragedies.

Rubio worried about rising prices from foreign instability. Far more consequential is the expense of military intervention, human and financial.

Spin Cycle: Carbon Dioxide Is NOT “Carbon Pollution”

The Spin Cycle is a reoccurring feature based upon just how much the latest weather or climate story, policy pronouncement, or simply poo-bah blather spins the truth. Statements are given a rating between 1-5 spin cycles, with less cycles meaning less spin. For a more in-depth description, visit the inaugural edition.

President Obama is keen on calling carbon dioxide emitted from our nation’s fossil fuel-powered energy production, “carbon pollution.” For example, last week, when introducing EPA’s Clean Power Plan—new regulations limiting carbon dioxide emissions from the power plants that currently produce 67 percent of the country’s electricity—he used the term “carbon pollution” ten times. For example:

Right now, our power plants are the source of about a third of America’s carbon pollution. That’s more pollution than our cars, our airplanes and our homes generate combined. That pollution contributes to climate change, which degrades the air our kids breathe. But there have never been federal limits on the amount of carbon that power plants can dump into the air. Think about that. We limit the amount of toxic chemicals like mercury and sulfur and arsenic in our air or our water – and we’re better off for it. But existing power plants can still dump unlimited amounts of harmful carbon pollution into the air. [emphasis added]

Clearly, he is trying to paint a picture for the American public whereby carbon dioxide emissions are thought of as dirty, noxious substances that invade the air we breathe and make us sick. Who wouldn’t support regulation to try to limit such a menace?

But, this is scientifically inaccurate and, no doubt, intentionally misleading. It reflects poorly on the president and on his scientific advisors.

No Foreign Aid for North Korea if Another Famine Strikes

SHENYANG, CHINA—North Korea is a major topic of interest in this provincial capital in China’s northeast. The “Hermit Kingdom” is just a couple hours away by car. Again, the North’s harvest does not look good. Observers warn that another famine may be coming.

The first reports of drought appeared earlier this year. The United Nations warned that 70 percent of North Korea’s population faces a food shortage.

Another famine is a grievous embarrassment. Several hundred thousand, and perhaps as many as two million, North Koreans died between 1995 and 1997 from a brutal, extended famine. The North since has been dependent on the generosity of others to feed its people.

The DPRK again has begun to bang its tin cup, seeking aid. The People’s Republic of China remains the North’s most important food supplier. The Chinese government almost certainly will continue to stand by its ally.

Scott Walker Hands $250 Million in Taxpayers’ Money to Billionaire Bucks Owners

Scott Walker touts his record as a fiscal conservative. But this morning, reports the Associated Press

Wisconsin Gov. Scott Walker took a break from the presidential campaign trail Wednesday to commit $250 million in taxpayer money to pay for a new arena for the Milwaukee Bucks.

Walker’s come under a lot of criticism from both left and right for his arena funding plan, including an article I wrote at the Huffington Post after he defended his plan on ABC’s “This Week.” Such deals are paid for by average taxpayers to benefit millionaire players and billionaire owners. But millionaires and billionaires have more influence than average taxpayers, and the pictures around stadium deals are great: 

Calling the new NBA stadium a “dynamic attraction for the entire state of Wisconsin,” Walker signed the bill at the Wisconsin State Fair Park surrounded by state lawmakers, local officials and Bucks team president Peter Feigin.

The economics, not so good. Walker has claimed a ”return on investment” of three to one, which he says is “a good deal” for the taxpayers. Economists disagree. As Dennis Coates and Brad Humphreys wrote in a 2004 Cato study criticizing the proposed D.C. stadium subsidy, “The wonder is that anyone finds such figures credible….

Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.

Republican voters are looking for fiscal conservatives and straight talkers. We’re hearing a lot of denunciations of corporate welfare and crony capitalism. And here’s a leading conservative candidate for president sitting down in front of cameras to sign a bill handing $250 million in taxpayers’ money (Bloomberg says $400 million with interest) to wealthy owners of a sports team (some of whom, no doubt coincidentally, are large donors to his campaign), in defiance of free-market advocates and virtually all economists. Will the other Republican candidates take him on? Will they denounce this wasteful extravagance?

Or will we have to rely on John Oliver to do the job small-government Republicans ought to be doing?

More Keynesian Primitivism from the Congressional Budget Office

I never watched That ’70s Show, but according to Wikipedia, the comedy program “addressed social issues of the 1970s.”

Assuming that’s true, they need a sequel that addresses economic issues of the 1970s. And the star of the program could be the Congressional Budget Office, a Capitol Hill bureaucracy that apparently still believes - notwithstanding all the evidence of recent decades - in the primitive Keynesian view that a larger burden of government spending is somehow good for economic growth and job creation.

I’ve previously written about CBO’s fairy-tale views on fiscal policy, but wondered whether a new GOP-appointed director would make a difference. And I thought there were signs of progress in CBO’s recent analysis of the economic impact of Obamacare.

But the bureaucracy just released its estimates of what would happen if the spending caps in the Budget Control Act (BCA) were eviscerated to enable more federal spending. And CBO’s analysis was such a throwback to the 1970s that it should have been released by a guy in a leisure suit driving a Ford Pinto blaring disco music.

Bloomberg BNA Podcast on Legal Challenges to ObamaCare

In this Bloomberg BNA podcast, Supreme Court correspondent Kimberly Robinson and I discuss King v. BurwellSissel v. HHS (the Origination Clause case), and House of Representatives v. Burwell, (the House GOP’s lawsuit against the Obama administration’s efforts to exceed its powers under the Constitution and the Affordable Care Act).

Keep an eye out for my article on King v. Burwell with Jonathan Adler in the upcoming Cato Supreme Court Review.

Adler and I will be speaking about King at the Cato Institute’s 14th annual Constitution Day symposium on September 17, 2015. Register here.