Topic: Trade and Immigration

Without the Farm Bill, We Would All Starve Tomorrow

Farmers’ groups would have us believe that without the multi-billion dollar dollops of taxpayers’ money that flow to farmers, the abundance of food we will all tuck into tomorrow would be reduced to a few grains of (probably foreign) rice. So, with Thanksgiving upon us, I thought I would provide an update of the Farm Bill debate.

Because of procedural wranglings, the Senate last week suspended consideration of the farm bill, possibly until early next year. The Republicans objected to Senate Majority Leader Harry Reid’s wish to limit the number of amendments that could be offered to the farm bill, meaning that time-honored Republican favorites such as the estate tax could not be considered. So, the bill was pulled. Assuming the Senate can pass a re-introduced bill in December, it will probably not go to conference before January.

In the meantime, our esteemed lawmakers are trading jibes about who is to blame for the current gridlock. Pity the farm-state Senators who have to go back to constituents to explain why the farm bill has been held up. In practice, so long as a bill is passed sometime in early 2008, it will probably not affect many farmers. Just in case though, and to placate farmers who say they are incapable of making planting decisions or securing loans without some sort of guarantee of government support, a bill to extend the current farm bill has been introduced.

What does all this mean for reform? Is the current stasis a positive sign? It would be if it reflected a deep unease about the farm bill and a fundamental, principled objection to the very premise of American farm policy. But, alas, so far the debate has been characterized by differences over the best way to deliver farm welfare (see my previous post) and how to spend any savings from higher commodity prices. Even the “alternative” farm bill, introduced by Sens. Richard Lugar (R, Ind.) and Lautenberg (D, N.J) delivers only modest relief to taxpayers, instead spending money on things such as the “Seniors Farmers’ Market Nutrition Program” ($200 million) and $75 million for “socially disadvantaged farmers and ranchers.”

President Bush’s veto threat still looms but, again, I have doubts about how committed he is to vetoing the bill, especially as the presidential election draws near. And, after all, he signed the egregious 2002 Farm Bill.

Anti-Immigrant Opinions are Weakly Held II

[Here’s Anti-Immigrant Opinions are Weakly Held I.]

In his book The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000 Yale history professor Paul Kennedy makes the case that, historically, great powers have risen to a point where they have become overextended because of their imperial commitments and the expenditures needed to defend them, at which point they have collapsed.

I was reminded of this when I saw the television ad Rep. Tom Tancredo is running in Iowa. (It’s getting much more play in the blogosphere than he could ever afford to buy.)

By equating immigrants to terrorists, this leader of the anti-immigrant right is shedding credibility - the coin of the political realm - at a furious pace. His argument just doesn’t square with the real world or the common sense judgments good American people make for themselves.

Anti-immigrant opinions have reached their apex. The cartoonish quality of Tancredo’s hysteria-mongering presages the fall. See for yourself.

Anti-Immigrant Opinions are Weakly Held

I didn’t watch Tuesday’s Democratic debate – watching politicians from either party outbid each other on faux outrage and how much of my money they would spend is too annoying – but I did get the after-action report on the Newshour. And it seems Senator Clinton was drawn into the vortex New York Governor Eliot Spitzer (D) created with his recent flip-flop on driver licensing and public safety.

His original decision to de-link driver licensing and immigration status for public safety reasons was right, but it was pounced on and demagogued by anti-immigrant groups. Spitzer backed down, and pledged his state to implement the REAL ID Act, pleasing nobody. (When the costs of this national ID law to New York are discovered, he’ll flip-flop again, earning quiet, broad-based appreciation.)

Watching the excerpts of the candidates bumbling around this issue, it appeared to me that they knew giving licenses to illegal immigrants is the right and practical thing to do, but also that they would get demagogued if they said so.

Well, here’s my advice: Go ahead and say it.

Having watched this issue, and having heard from lots of angry people, I know that anti-immigrant views are a classic weakly held opinion. Angry as people are about the rule of law and “coming to this country the right way,” that anger melts when they learn more. Stuff like this:

“We haven’t permitted anywhere near enough legal immigration for decades. You can sit back and talk about legal channels, but the law has only allowed a smidgen of workers into the country compared to our huge demand. Getting people through legal channels at the INS has been hell.

“America, you’re going to have to get over what amounts to paperwork violations by otherwise law-abiding, honest, hard-working people. And that’s what we’re talking about - 98% honest, hard-working people who want to follow the same path our forefathers did, and who would be a credit to this country if we made it legal for them to come. Our current immigration policies are a greater threat to the rule of law than any of the people crossing the border to come here and work.”

This kind of argumentation will be met with vicious demagoguery, which will weaken, and weaken, and fade and fade and fade. The people I hear from – and I regularly do because of the educating I’ve been doing nationwide on the REAL ID Act – immediately soften when I pull them from their echo chambers. The “rule of law” hand is a low pair compared to this full house: “honest, hard-worker from impoverished circumstances, denied legal channels other than a narrow chance of navigating an incompetent bureaucracy.”

There’s one Democratic candidate who is well suited to make this kind of argument. It’s a way to draw attention, look principled, do the right thing, and vanquish a loud but weak pressure group. New Mexico’s uninsured driver rate dropped by two-thirds – from 33% to 11% – when that state delinked immigration status and driving in 2003.

Expanded Trade Adjustment Assistance Passed in House

Following on from my earlier post, the U.S. House of Representatives just passed the Trade and Globalization Assistance Act of 2007, although with insufficient votes to override a veto, as threated in yesterday’s Statement of Administration Policy (available here). The new legislation would roughly double the level of federal spending on the trade adjustment assistance program, by expanding the income and health care benefits to new categories of workers and increasing training (keep in mind this is the same program that the Government Accountability Office has admitted was “ineffective”).

TAA moves on to the Senate next, where we might see a bit more of a fight: the Chair and Ranking Member of the Senate Finance Committee are at odds over possible changes to the program.

[Hat tip: Our crack Government Affairs team.]

Limited Government: Good for Thee, But Not For Me

An interesting, if not encouraging, piece today by Jonah Goldberg in the LA Times about how Americans, although all for limited government in theory, are all-too-fond of the goodies government throws their way in practice. People usually like stuff, especially if someone else pays for it. Consequently, according to Mr Goldberg, the constituency for limited government is small. That might explain the lack of advocates for a very limited government among the front-runners for the Republican nomination (Side note: I have often wondered how many of the Democrats I know would lose their enthusiasm for Ron Paul if they looked beyond his anti-war stance).

Things might get worse, too. A 2006 study from the Heritage Foundation shows that the number of people who receive some sort of assistance from the government grew two and a half times more quickly than the U.S. population as a whole between 1962 and 2005 (see graph 10). And although it does not measure the same thing, a recent report by the staff of the Joint Committee on Taxation shows that 42 percent of Americans didn’t pay any income tax in 2006 (hat tip: Chris Edwards).

It seems we may be reaching a crucial “tipping-point” of dependency talked about in the Heritage report, although obviously it can only go so far before those being looted pull the plug (Say, that sounds like a good idea for a book plot!).

When Protectionists Meet Welfare Kings

Yesterday the House Ways and Means Committee approved by a margin of 26-14 a bill (H.R. 3920) to expand and extend (until 2012) the Trade Adjustment Assistance Program, which provides extra welfare and training to workers who lose their jobs as a consequence of import competition or outsourcing. The new bill would expand trade adjustment assistance to cover more workers beside those who work in the manufacturing industry, including service employees, who currently cannot get benefits under TAA if their jobs are moved overseas. It also increases the benefits and training available to trade-displaced workers, and the “incentives” for states to increase unemployment insurance coverage. It is still unclear just when this bill will face the full House, or what any alternatives will be.

I have a trade briefing paper, forthcoming soon, on this topic and I wrote an op-ed yesterday, arguing that TAA should be cancelled rather than extended. Here’s why: first, fewer than 1 in 30 unemployed people can point to import competition or outsourcing as the reason for their unemployment. Changes in consumers’ tastes, changes in technology and increasing productivity is far more likely to be a cause of unemployment (more from my colleague Dan Griswold here). So TAA is yet another example of special interests receiving special treatment.

Second, while TAA for workers cost a “mere” $800 million or so in 2006, we can expect that cost to rise as more workers are included (more than 80 percent of American workers work in the services sectors, although many of those are non-tradeable) and Congress sees fit to spend more of your money on wage insurance, training and the like.

Third, although hints have been made that the preferential trade agreement with Peru is predicated on passage of TAA extention, the historical bargain between free-trade advocates and workers–that any trade liberalization would be accompanied by extra welfare benefits for those who lose their jobs– is no longer certain. For sure the bilateral deal with the most to offer economically, that with South Korea, looks all but doomed.

The moral case for TAA is dubious at best. A lack of prospects for commercially meaningful trade liberalization tips the balance.

The Draft: Way to (More) War

The United States’ increased military activity following the declaration of the “War on Terror” has inspired a growing movement to reinstitute compulsory service — that is, to bring back the draft. Perhaps surprisingly, the movement is largely on the political Left.

We could joke cynically that the new draft movement shows Democrats’ love of slavery is still strong nearly a century and a half after the 13th Amendment. But draft advocates have a serious motivation: They see the return of compulsory service as “a way to peace.”

Their thinking goes like this: If the draft were reinstated, then a cross-section of the public would be directly affected by U.S. military action — our children could be drafted. The public would thus develop a more critical view of military involvement than what they have now. They would pressure Congress and the White House to give greater attention to the troops’ well being, would prompt a withdraw from Iraq, and would decrease the likelihood of questionable missions in the future. As an Iraq war veteran wrote in a Sunday NYT op-ed:

[S]erious consideration of a draft could set off such a violent reaction from the American public that the pressure on politicians to abandon their cliché-ridden rhetoric and begin a well-considered withdrawal would be overpowering.

The draft advocates’ motivation is respectable. Unfortunately, their strategy is too clever by half — or, perhaps, not clever enough about the incentives and disincentives of political leaders who dispatch troops, and about 20th century American military history.

With no compulsory service, America’s military can only rely on volunteers to fill its ranks. If political leaders are overly aggressive in their use of the military, or if service members are poorly treated, poorly compensated, and poorly trained and equipped, or if they are exposed to unacceptable risk, then the Pentagon will have trouble with recruitment and retention. That’s why, when the United States abandoned selective service in 1973 after 25 years of paying conscripts poorly, training them minimally, and using them as cannon fodder in Korea and Vietnam, the Pentagon had to increase troops’ compensation significantly and reduce their risk of being killed or injured in combat (which was accomplished, in part, by developing and deploying advanced weaponry and improving troops’ skills and training).

Call this the “enlistment veto” — because the United States has an All-Volunteer Force (AVF), would-be volunteers act as a check on the politicial leaders who would send them to war and the military leaders who would command them. If those leaders are reckless and abusive in their use of the troops and miserly in the troops’ compensation, then the military will have trouble filling its ranks. As a result, the leaders would be less inclined to use the military because the understaffed force would be less likely to achieve military success.

Contrast the AVF with compulsory service, where there is no enlistment veto. With the draft, young people are forced to soldier for America’s political and military leaders regardless of the soundness of those leaders’ decisions, their treatment of the troops, and the troops’ level of compensation, training, and equipment. With the draft, U.S. politicians have an ample, cheap supply of military manpower to use as they see fit.

Put simply (and perhaps crudely): If political and military leaders were given a larger, cheaper supply of a vital input to war — namely, troops — would that result in less military involvement or more?

A look at selective service in the 20th century shows politicians can find all sorts of questionable uses for the military when young people are forced to serve. Following the expiration of the WWII draft in 1947, the United States adopted the peacetime selective service program for the period 1948–1973. In that quarter-century, the United States dispatched troops to the following foreign entanglements:

  • China (1948–1949)
  • Korea (1951–1953)
  • Egypt (1956)
  • Lebanon (1958)
  • Panama (1958)
  • Vietnam (1960–1975)
  • Panama (1964)
  • Dominican Republic (1965–1966)
  • Cambodia (1969–1975)

Did U.S. leaders show they more highly valued the cheap, forced labor of the selective service era than the more costly, more discriminating labor of the post–selective service era? Complete data on casualties for the two time periods are difficult to compile, but we can make a rough comparison by using fragmented data [sources]. The two major U.S. military involvements of the selective service era (Korea and Vietnam) saw 81,165 hostile action deaths of U.S. troops and 256,587 wounded. In contrast, for the period 1980–1999 (including the Gulf War and Somalia) plus the Iraq and Afghanistan wars (as of 10/06/2007), U.S. troops experienced a total of 3,927 hostile action deaths, and the three prominent post-1980 military conflicts (as of 10/06/2007) yielded a total of 30,290 wounded.

Granted, the conflicts and geopolitical dynamics of the selective service era are different than the post–selective service era. But given the historical data, it’s very hard to accept draft advocates’ claim that reinstituting compulsory service would make the United States less aggressive militarily and would make political and military leaders more responsive to the troops’ concerns.

Draft proponents would respond that using compulsory service to supply troops for a politically unpopular war would lead to social unrest that would reshape U.S. politics. But is that unrest a stronger check on political and military leaders than the enlistment veto? Consider that there has been precious little change in Iraq policy despite protests and considerable public criticism of the war. And yes, the United States did change course in Vietnam after a lot of 1960s protests — but it took a very long time before that policy change happened. It is difficult to believe that the United States would have fought the Vietnam War the way it did, for as long as it did, if it had to rely on an all-volunteer military instead of being able to call on cheap, forced labor.

The “protests instead of enlistment veto” strategy becomes even more untenable when we consider U.S. demographics. The American public is aging, families are growing smaller and more fragmented, and it is older Americans with adult children — people who are not at risk to be drafted, and whose kids are not at risk to be drafted — who are increasingly dominating American politics. This older, less-connected American majority seems unlikely to take a stronger interest in the well-being of U.S. troops than the would-be volunteers themselves.