Topic: Trade and Immigration

The Right Way to Engage China

The United States and China reached an agreement yesterday on a dispute over alleged Chinese export subsidies. In exchange for the U.S. government dropping a case it was pursuing through the World Trade Organization, China agreed to end subsidies that the U.S. claimed were promoting exports and hindering imports of steel, wood, IT products, and other manufactured goods.

Details of the case aside, the announcement shows how trade disputes with China can be resolved without resort to threats of retaliatory tariffs. This is not the first time China has changed its trade laws in response to pressure from the United States through the WTO. In 2004, China dropped a discriminatory tax refund on domestically produced semiconductors after the U.S. government filed a complaint.

Today’s announcement is another vindication of resolving trade disputes with China through a rules-based system rather than through threats of unilateral retaliation. China’s accession to the WTO in 2001 not only committed China to lowering trade barriers on a broad range of goods and services; it also brought China into the generally effective WTO dispute settlement mechanism.

In two weeks, Treasury Secretary Paulson, U.S. Trade Representative Susan Schwab and other cabinet members will meet with their Chinese counterparts in Beijing as part of the ongoing Strategic Economic Dialogue. As today’s announcement verifies, the SED represents the right approach to encouraging China to continue its evolution toward a more free and open economy.

Are 35 Million Americans Going Hungry?

A news story and op-ed in the Washington Post recently noted that about 35 million Americans, or more than 10% of the population, are “food insecure.” It sounds like there is a massive underclass of people in the nation who are so poor that they can’t get enough to eat and are going hungry. No doubt that is the idea that many articles want to put across on the reader.

But is the hunger problem really that big? Let’s go to the official definitions and data at the Department of Agriculture:

Definitions: http://www.ers.usda.gov/Briefing/FoodSecurity/measurement.htm 

Data: http://www.ers.usda.gov/Briefing/FoodSecurity/howoften.htm 

It seems to me that it’s only the “very food insecure” folks who might be sometimes going hungry. Less than 3% of the population is very food insecure at any time during a given month, and that drops to less than 1% on any given day.

Douglas Besharov has argued that the main food-related health problem today is obesity, not hunger. Poor Americans are generally suffering not from too little food, but from too much of the wrong kinds of food. 

According to federal data, about two-thirds of American adults are “overweight” and about half of those are “obese.” Those rates are actually higher for adults below the poverty level. Similarly, children below the poverty line are more likely to be overweight than other children.

Despite these modern realities, food subsidy programs continue to support an out-of-date model of increasing the caloric intake of low-income Americans. It’s time to cut them. See further discussion here.

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!).