Tag: washington

Tuesday Links

  • “Snowmageddon!” If you’ve been watching the news, recent snow storms both prove and disprove global warming, depending on who you talk to. According to Pat Michaels, both sides are wrong: “The fact of the matter is that global warming simply hasn’t done a darned thing to Washington’s snow. The planet was nearly a degree (Celsius) cooler in 1899, when the previous record was set. If you plot out year-to-year snow around here, you’ll see no trend whatsoever through the entire history.”

Thursday Links

  • Why the Tea Partiers should not date the GOP: “This movement is simply saying: ‘We are fine without you, Washington. Now for the love of God, go attend a reception somewhere, and stop making health care and entrepreneurship more expensive than they already are.’”
  • A growing disconnect: “A nasty spat has erupted between Washington and Beijing over the Obama administration’s arms sales to Taiwan….The bulk of the evidence suggests that storm clouds are building in the US-China relationship.”

Weekend Links

Global Markets Keep U.S. Economy Afloat

Three items in the news this week remind us why we should be glad we live in a more global economy. While American consumers remain cautious, American companies and workers are finding increasing opportunities in markets abroad:

  • Sales of General Motors vehicles continue to slump in the United States, but they are surging in China. The company announced this week that sales in China of GM-branded cars and trucks were up 67 percent in 2009, to 1.8 million vehicles. If current trends continue, within a year or two GM will be selling more vehicles in China than in the United States.
  • James Cameron’s 3-D movie spectacular “Avatar” just surpassed $1 billion in global box-office sales. Two-thirds of its revenue has come from abroad, with France, Germany, and Russia the leading markets. This has been a growing pattern for U.S. films. Hollywood—which loves to skewer business and capitalism—is thriving in a global market.
  • Since 2003, the middle class in Brazil has grown by 32 million. As the Washington Post reports, “Once hobbled with high inflation and perennially susceptible to worldwide crises, Brazil now has a vibrant consumer market …” Brazil’s overall economy is bigger than either India or Russia, and its per-capita GDP is nearly double that of China.

As I note in my Cato book Mad about Trade, American companies and workers will find their best opportunities in the future by selling to the emerging global middle class in Brazil, China, India and elsewhere. Without access to more robust markets abroad, the Great Recession of 2008-09 would have been more like the Great Depression.

Mainstream Media’s Trade Gap

In a post at the Enterprise Blog two days ago, economist Mark Perry deftly parodies a typical mainstream media account of trade protectionism by editing the story in redline to contrast its original presentation with its true significance. I recommend reading the whole thing, but here’s the first paragraph:

WASHINGTON POST (Reuters) - A U.S. trade panel gave final approval on Wednesday to duties taxes ranging from 10 to 16 percent on cost-conscious firms in the U.S. who purchase low-priced Chinese-made steel pipe rather than high-price domestic pipe, in the biggest U.S. trade case to date against China American companies (and their shareholders, employees, and customers) who shop globally for their inputs and find the best value in China.

Perry’s point—and I share his frustration—is that the mainstream media typically fail to convey even a sense of the costs of U.S. protectionism to U.S. interests even though Americans (and non-Americans living in the U.S.) bear the greatest burden of that protectionism. When the U.S. government imposes duties on Chinese steel, it is imposing taxes on U.S. consuming industries, their employees, their shareholders, and their customers.

Considering that more than half of the value of all U.S. imports in a typical year is raw materials and intermediate goods (i.e., inputs for producers operating in the United States, who employ people, transact with other businesses, and pay taxes in the United States), the number of U.S. victims of U.S. import taxes is much larger than one can ever glean from a typical media account. Taxes on Chinese-made ”Oil Country Tubular Goods” or OCTG (the subject in the article Perry edits), which are used for oil exploration and transport, will raise costs in the energy industry, which are likely to be passed onto consumers in the form of higher energy prices.

As described in this paper, trade is no longer a competition between “Us and Them.” There is competition between entities that—because of the proliferation of cross-border investment and transnational production and supply chains—often defy any meaningful national identification. But that competition is preceded by collaboration and cooperation between entities in different countries. The factory floor has broken through its walls and now spans borders and oceans—a fact that renders U.S. workers and workers in other countries complementary in more and more cases, and a fact that amplifies the cost of trade barriers.

But media—chained to the false “Us versus Them” paradigm—describe protectionist policies as actions taken by one national monolith against another, and convey the impression that American readers should be cheering for Team America. It is a worldview that conflates the well-being of “our producers” with some homogenized conception of “the national interest.” It is the same misguided scoreboard mentality that colors reporting of the trade account, where exports are deemed “good” and imports “bad.”  And, it is this simplistic, misleading characterization that, in my opinion, is most responsible for withering public opinion about trade and globalization over the past decade.

I look forward to more of Dr. Perry’s editing projects.

Talking about Terrorism

Terrorists are named after an emotion for a reason. They use violence to produce widespread fear for a political purpose. The number of those they kill or injure will always be a small fraction of those they frighten. This creates problems for leaders, and even analysts, when they talk publicly about terrorism. On one hand, leaders need to convince the public that they are on the case in protecting them, or else they won’t be leaders for long. On the other hand, good leaders try to minimize unwarranted fear.

One reason is that we shouldn’t give terrorists what they want. Another is that fear is a real social harm, particularly when it is exaggerated. Stress from fear harms health. It causes bad decisions. For example, if people avoid flying and drive instead the number of added fatalities on the road will quickly surpass the dead from a typical terrorist attack. Most important, excessive fear causes policy responses that often damage the economy without much added safety. Measured in lives on dollars, reactions to terrorism often cost more than the attack themselves.

If leaders talk only about the danger of terrorism and everything they are doing to fight it, without putting danger in context, they may be on safe political ground, but they risk causing or prolonging groundless fear and encouraging all sorts of harmful overreactions. That is the Bush Administration’s counterterrorism record, in a nutshell. If leaders just say “calm down and worry about something more likely to harm you,” they will be butchered politically.

So a reasonable approach is to sound concerned but reassuring. You want to convince people that they are mostly safe without appearing complacent. I don’t like many of this administration’s counterterrorism policies, starting with Afghanistan, but thus far its communication about terrorism is far more sensible than the last administration’s. That includes the aftermath of this attempted Christmas Day attack.

The administration made it clear that it is unacceptable that a guy we just got warned about got onto a plane wearing explosives. But the President also said Americans should be generally confident in their safety from terrorism. He didn’t act as if this incident was the most important thing on his schedule this year or compare the Al Qaeda affiliate in Yemen to the Third Reich or what have you, exaggerating their capability and power. I wish he had gone further and said that detonating explosives smuggled on to a plane is tricky and that flying remains incredibly safe. (Jim Harper will soon have more to say here on the security failures and how to talk about them.)

In a different political universe, the President could describe the terrorist threat honestly. He would say that recent attempted terrorist attacks in the United States show more amateurism and failure than skill and success. He could add that we are fortunate that our greatest enemy, al Qaeda and its fellow-travelers, are scattered and weak compared the sorts of enemies we historically faced. He would sound more like Michael Bloomberg, who told New Yorkers that they had a better chance of being struck by lightening than killed by terrorists, after a particularly inept terrorist plot on JFK airport was uncovered. He could even quote Nate Silver, who calculates that in the last decade of US flights, there was one terrorist incident per 11,569,297,667 miles flown. It’s true, as Kip Viscusi demonstrates, that people don’t think like actuaries. They rightly value different sorts of deaths in different ways, and want more protection against terrorism than other dangers. But knowing the odds is still important in weighing the appropriate amount of concern and forming policy preferences. The president could also have treated voters like grown-ups and pointed out that whatever flaws in airline security that this attempted attack reveals, there is no such thing as perfect safety, and sooner or later even the finest security systems fail.

I also disagree with the argument that the trouble with our airline security or national security policy-making in general is insufficient presidential attention. Overall, we could do with a little more masterly inactivity in security policy, to use an old British phrase. Aviation security is another matter, but I struggle to see how presidential involvement would have fixed this problem. The 9-11 Commission did claim that September 11 occurred because leaders failed to pay sufficient attention to al Qaeda, but there, as in other matters, the Commission is wrong. At least in the executive branch, the attention paid to the threat in the 1990s was quite substantial, as you can see in this essay by Josh Rovner or in my contribution to this book. The historical record shows that the threat was well understood by security officials and the reading public. Time, for example, called Osama bin Laden the most wanted man in the world when they interviewed him in 1998. The trouble, in my opinion, was not misperception but our policies and the difficult and unprecedented nature of problem–a terrorist group ensconced in hostile country that refused to do anything about it.

Getting the line between confidence and vigilance right is not easy, but it starts with acknowledgment that there is such a thing as overreaction. That subject will be the on the agenda for our January 13 counterterrorism forum with James Fallows, State Department Counterterrorism Coordinator Daniel Benjamin, Paul Pillar and others.

*My attempts to explain this stuff to Politico yesterday resulted in some confused and inaccurate uses of my quotes in this story by Carol E. Lee, which unconvincingly compares the Obama’s response to this terrorist attempt to his silly involvement in the Henry Louis Gates arrest fiasco. First, Lee absurdly uses me as example of “predictable” attacks from the right on Obama, when I said I was glad that the President said Americans should feel confident but that I’d have preferred if he’d done it more forcefully by saying flying remains safe and al Qaeda weak. That is more or less the opposite of the predictable take on the right. Then, she says that my views on the President’s response to the attacks referred to his post-press conference golf outing. I was talking about his overall response, or lack thereof, over the last several days. I can’t decipher the meaning of presidential golf.

Thursday Links

  • Doug Bandow:  “Congress has spent the country blind, inflated a disastrous housing bubble, subsidized every special interest with a letterhead and lobbyist, and created a wasteful, incompetent bureaucracy that fills Washington. But now, legislators want to take a break from all their good work and save college football.”