Tag: economy

How Protectionism Crashed the World Economy…and How to Stop It This Time Around

A coalition of more than 70 groups around the world, from Canada to Brazil to Kyrgyzstan to Germany to China to Japan to Kenya, has joined together to stop the dangerous stirrings of protectionism.  The FreedomToTrade.org coalition (coordinated internationally by the Atlas Economic Research Foundation and the International Policy Network) has circulated a petition (signed by over 1,000 economists and thousands of others) and is now producing documentaries to alert the public to the dangers posed by protectionism.  This one is on the role the Smoot-Hawley Tariff played in turning a serious recession into the Great Depression.

The mini-documentary is also being made available in 12 other languages.  The Spanish version will be available on Cato’s Spanish-language project, ElCato.org. Others are available on YouTube.

This information is important and needs to be widely shared.  Pass it on…

The Stimulus Feeding Frenzy

Billions and billions of dollars! Get yours today!

I’ve written before about the massive lobbying game in Washington to get your own special interests written into the stimulus and budget bills. And about the efforts to pressure governments into spending that money NOW.

Today a friend sent me a new piece of the incredible expanding stimulus economy. A publishing company has created a new newsletter on how to keep up with “ever-changing opportunities and the complex requirements to apply for them” – The Money for Main Street Monitor. Yes, for only $229 a year, with this special offer, you can keep up with the lucrative and ever-changing “new stimulus funding opportunities.”

I’m omitting the specifics so as not to give this parasitical industry any more publicity, but here’s the text of the email advertisement:

Dear Nonprofit Professional,

Billions of dollars from the Obama stimulus plan are becoming available daily for funding thousands of new state, local and nonprofit programs!

And while it’s extremely time consuming and difficult to keep up with the ever-changing opportunities and the complex requirements to apply for them, we can help make that task easier than you’d imagine.

That’s why [the company] is proud to introduce our newest and much-needed online service: The Money for Main Street Monitor.

Just click on or cut and paste the following link into your Web browser to take advantage of a special one-week offer on this continuously updated service:

Continuous Stimulus Funding Updates

While we have diligently kept our readers up to date on the billions of dollars in funding coming from the Obama stimulus package, many tell us they need much more coverage!

Consequently, we have assigned a team of experienced Washington, DC-based editors to focus exclusively on new stimulus funding opportunities for health care, family services, education, mental health, disabilities and substance abuse programs, housing and community development!<

Through continuously updated articles, subscribers to this new online service will be kept up to date on the latest funding opportunities as soon as they emerge. And with our online format, subscribers will have access to our user-friendly search tools to instantly find the funding opportunities most suited for their organizations!

Plus, our updates – unlike those on government Web sites – are in plain English and easy to find.  And, we’ve included a wealth of grant-writing tips designed to help your organization get its share of stimulus funding!

We know how important it is for every organization to watch their dollars closely these days, and we’re doing are best to help. That’s why we are offering you a specially reduced rate for this much-needed publication, The Money for Main Street Monitor.

Just click on or cut and paste the following link into your Web browser to find out more about this special one-week offer:

Or you can call in your order toll free at 1-800-[GET OTHER PEOPLE’S MONEY].

This isn’t the only company making such offers. Lobbyists, consultants, newsletter publishers, and others will be making money this year guiding their clients to the pot of gold at the end of the stimulus. But in economic terms, all this effort is deadweight loss. Instead of devoting time and talent and resources to the production of real economic value, these people are being lured into the parasite economy, jockeying for money extracted from productive workers and businesses and redistributed by a Washington bureaucracy and the lobbyists that revolve around it.

The Global Economy Is Not Immune to Swine Flu

World governments should be careful not to play politics with the Mexican swine flu outbreak. The health consequences should of course be rigorously addressed—but without adding economic consequences, which is what several countries appear poised to do.

Public health scares have a history of seeping into trade policy without anything resembling sufficient consideration of the evidence. Governments in Russia and East Asia are already banning pork exports from Mexico, even though there is zero evidence that they pose a health hazard. It hearkens back to unfounded bans of U.S. beef in recent years by the European Union and South Korea.

If the U.S. government jumps on board, U.S. exports could be targeted for retaliatory trade actions. One quarter of U.S. pork production is exported, as well as billions of dollars of our soybeans used as feed by foreign hog farmers.

Exploiting this crisis could turn what is so far a manageable health problem into an unnecessary trade and diplomatic conflict. Obviously the global economy does not need the extra strain.

First 100 Days: More of the Same

President Obama campaigned on a promise of change. But the first 100 days of his administration have seen a continuation of the Bush administration’s irresponsible fiscal policies: more bailouts, higher spending, and mounting debt.

The president has already signed a tax hike that disproportionately hurts lower-income people, and is seeking additional tax increases to fund a transition to a more centrally-planned, European-styled economy.

Just as previous administrations have done, the president is using the current economic ‘crisis’ to justify further government encroachment upon the private sector. In doing so, dangerous precedents are being set that could have negative repercussions for future economic growth and individual liberty.

New Study: How President Obama Can Help Restore the Pro-Trade Consensus

Since taking office, President Obama seems to have discovered that anti-trade rhetoric, while popular on the campaign trail, isn’t so useful to a sitting president whose policies will have lasting consequences, says trade analyst Daniel J. Ikenson in a new Cato study.

In “Audaciously Hopeful: How President Obama Can Help Restore the Pro-Trade Consensus,” Ikenson and international trade attorney Scott Lincicome argue that the time has come “to arrest and reverse America’s misguided and metastasizing aversion to trade,” which has “been shaped overwhelmingly by relentless political rhetoric.”

The authors’ suggestions for President Obama include:

  • Establish a “trade transparency initiative,” with the goal of publishing independent findings about the effects of trade and trade barriers on the U.S. economy, without political interference.
  • Reinforce for Congress the fact that a unilateralist trade policy undermines multilateral foreign policy, as well as President Obama’s personal efforts toward repairing America’s damaged image abroad.
  • Craft a pragmatic, principled approach to enforcement of standing trade agreements.
  • Adopt a China policy of carrots and sticks, including a continued push for China to open more of its markets while resorting to the WTO dispute settlement system only when the situation and facts support doing so.
  • Craft a proactive agenda now for implementation when trade consensus re-emerges.

See more Cato research on trade policy.

State Tax Increases on the Rise

The headline from Stateline.org’s top story today reads, “State budget gaps top $200 billion; fee, tax hikes in the works.” But as Chris Edwards noted back in February, these so-called “budget gaps” are mainly fiction.  Put simply, previous revenue forecasts overstated the amount of money that would be coming into state coffers.  Now that revenues are drying up because of the slow economy, state politicians can’t spend the amount of money they intended.

For individuals and businesses, the economic downturn and resulting financial crimp means less spending and more prudence.  For politicians and those living at the expense of taxpayers, it means raising taxes to keep the spending spigots turned on.  As the table below shows, total state spending has increased at an excessive pace this decade:

200904_blog_dehaven

Too often journalists report on the present plight of pro-tax and spend policymakers without considering decisions made in the past.  Readers should bear the above table in mind the next time they come across such amnesic reporting .

Cleveland Park Embraces Free Markets

Cleveland Park, an upscale neighborhood here in the District of Columbia, might be the last place you would expect appeals to the principles of the free market.  It is, after all, the home of what David Brooks once called ”Ward Three Morality,” an outlook that celebrates government control of the economy. But not always.

Recently an entrepreneur proposed opening a new wine store in Cleveland Park. He sought the support of the advisory neighborhood commission, a local government board, before making his case for a liquor license to DC’s Alcohol Beverage Control Board.  The most serious opposition to the entrepreneur’s plans seems to have come from an existing wine store nearby. According to its attorney, the existing wine store was “a beloved extension of the community.” More candidly he noted the new store would offer competition to the existing business. At this point, you might think: the Cleveland Park commission blocked opening of the new business while congratulating themselves on protecting the town from a ruthless “capitalist logic.”

Well, not quite. Peter Fonseca, the lawyer for the entrepreneur, reportedly “urged the commissioners to consider free-market principles when making their decision. ‘This is America.’” And they did: “Commissioner Richard Rothblum agreed, saying commissioners should not get in the way of free enterprise. ‘I don’t think we have any place telling people what their business plan should be.’” The commission then voted 8-0 to support the entrepreneur’s effort at the Alcohol Control Board. The appeal to “free market principles” seems to have carried the day in Cleveland Park!

Perhaps this is only the beginning. If the free market is desirable for fine wines, why not the auto industry and the banks?