Tag: profit margins

Crocodile Tears? Liberals Lament Lack of Their Own on the Court

An interesting narrative has arisen among some on the left that the nomination of Elena Kagan shows what chumps Democratic presidents are.  That is, not only could President Obama have tapped a stronger “progressive” voice, but he – like President Clinton before him, and unlike Republican presidents – put avoiding political fights ahead of moving the Court left.  Since LBJ, Democrats have opted for a “moderate technocrat” like Stephen Breyer rather than a “lion” like William Brennan or Thurgood Marshall.  (Sonia Sotomayor was good and necessary for identity politics, the argument continues, but, let’s face it, she’s no liberal Scalia.)

Take this opening quote from a New York Times article that came out the day of the nominee’s announcement: “The selection of Solicitor General Elena Kagan to be the nation’s 112th justice extends a quarter-century pattern in which Republican presidents generally install strong conservatives on the Supreme Court while Democratic presidents pick candidates who often disappoint their liberal base.”  Or Dahlia Lithwick’s op-ed in Slate about how liberal law students are so many lost sheep because their ideological heroes are deemed unconfirmable and therefore not part of the nomination discussion.

Well.  A few things on this: First, even if the argument were true, it’s simply not statistically significant because we’re only talking four Democratic appointments (Breyer and Ruth Bader Ginsburg by Clinton, Sotomayor and Kagan by Obama; poor Jimmy Carter had none, the same number George W. Bush would have had had he not been re-elected).  Second, if you line up the Republican and Democratic nominees in recent decades, it’s conservatives who are disappointed (need I even mention John Paul Stevens, Anthony Kennedy, and David Souter, let alone Earl Warren and Brennan himself, all Republican nominees).  Third, to say that someone like Ginsburg – a push-the-envelope feminist and ACLU lawyer – is a moderate is to center the jurisprudential spectrum around the law faculty lounge.  And fourth, as David Bernstein details, it is people like Richard Epstein – and other Federalist Society regulars like Dan Troy, Miguel Estrada, John Eastman, Frank Easterbrook, Stephen Bainbridge, and Todd Zywicki (as well as Cato’s own Roger Pilon, Randy Barnett, and Ilya Somin) – who would be considered filibusteringly beyond the pale, much more than Lithwick’s vaunted American Constitution Society stalwarts.

In short, if anything it is Republicans who can rightfully be disappointed in their presidents’ nominees – though Kennedy’s seat was of course originally to have been filled by Robert Bork. More unfortunately, it is libertarian law students who can lament that their kind lacks representation on the High Court – though note that the second choice for Kennedy’s seat was Douglas Ginsburg (the last judicial martyr of the drug war).  And so, as the Court remains securely to the left of the American people, just today ratifying radical assertions of federal legislative and judicial power, Elena Kagan is poised to fit right into that jurisprudential “mainstream.”  Good for the left, bad for the Constitution.

President Obama Subsidizes President Obama with Tire Tariff

CHINA-US-CONSUMER-RECALL-FILESWho benefits from 35 percent duties on Chinese-produced tires?

U.S. producers? No, they are the ones who, pursuing profit-maximizing strategies, have consciously shifted production of low-end tires from their U.S. plants to their Chinese plants over the past few years. They will now have to incur the costs of shifting production from China to production facilities in Brazil, Mexico, Indonesia and other developing countries, where it makes economic sense to produce low-end tires.

U.S. workers, then? Nah. Low-end U.S. tire production workers won’t see an increase in U.S. capacity, capacity utilization, hours worked, or wages because, as implied above, production isn’t coming back to the United States. Meanwhile, U.S. workers in tire wholesaling, distribution, and other segment of the supply chain are likely to see a decline in business in the short-run, as higher prices reduce demand for tires. Things may improve once adjustments are made to the new production locations, but that will involve certain adjustment costs and lower profit margins because presumably China is the profit-maximizing production location. Right?  Why else would producers have chosen China?

Does the tariff benefit consumers, then? Come on. Not only will it lead to higher prices for consumers, but it will hit cost-conscious consumers the hardest. And you thought President Obama opposed regressive taxation?

No, the only beneficiary of the tariff is President Obama, who presumably gets some political mileage for his Chicago-style payback of Big Labor. But make no mistake that any benefits to the president will be fleeting, as the direct costs of the tire tariff and the costs of copycat protectionism start to squeeze economic recovery. As the president is flooded with similar requests for protection from other unions and producers, he will have to choose between disappointing those favor-seekers or strangling economic prospects entirely. The tire decision was selfish and shortsighted.