Do Tariffs Promote Human Rights?

A number of Republican Senators have written a letter to President Obama raising the issue of human rights abuses in Vietnam.  They have a laundry list of good reforms they want to see in Vietnam before that country is included in the Trans-Pacific Partnership trade agreement currently under negotiation.

The letter includes this broad claim about the purpose of the TPP:

The Trans-Pacific Partnership should not serve as simply another trade agreement. As the collective name suggests, TPP should send a message to the international community that its member nations consider one another as trusted partners. As such, all nations in the TPP agreement should have a common commitment to religious freedoms and human values.

The Republican senators’ concerns match up well with those expressed by John Sifton of Human Rights Watch, who worries that the TPP will not do enough to improve human rights in Vietnam or other TPP countries.

The Obama administration needs to be more realistic in describing what can be accomplished by the TPP. It’s already bad enough to forego human rights protections for the sake of free trade. It’s even worse to attempt to sell the agreement by invoking supposed rights protections when they don’t exist.

The Obama administration needs to press harder on TPP members to improve their rights records—for real. The United States shouldn’t move ahead with the TPP until it can demonstrate more serious commitments to creating truly enforceable provisions on labor rights protections and better addressing human rights concerns generally.

If the purpose of the TPP were indeed to send a message about the members’ human rights records, then the senators would have a point.  If the purpose of the TPP were to impose new human rights obligations on TPP members, then Human Rights Watch would have a point.  But the purpose of the TPP is to reduce tariffs and other barriers that restrict trade.  At least, it should be, because that’s what it will actually do.

In a way, the Obama administration has invited the criticism it’s getting over human rights in the TPP.  The President has sold the TPP to Congress and the public as a way to spread “American values.”  It’s only natural then that people would debate what those values are and whether the TPP is spreading them effectively. 

And the critics are right.  Trade agreements are not a very direct way to reform oppressive regimes or enforce human rights norms.  They are, however, the most politically viable mechanism for reducing protectionism. 

Protectionism makes people’s lives worse by diverting economic gains toward politically favored interests at the expense of growth and quality of life, especially for the poor who are stuck paying higher prices for basic necessities like food and clothing.

So rather than linking the TPP with human rights, let’s ask about the impact of tariffs on human rights.  Does it help people in Vietnam that their own government imposes trade barriers to keep prices high and insulate state-owned businesses from competitive markets?  Does it help them when the United States imposes tariffs on the products they make? 

I challenge anyone who opposes the TPP due to Vietnam’s human rights record to explain the value of tariffs in fighting human rights abuses.

The Obamacare Giveaway – It’s Better to Be 64 than 30 (sometimes)

Take a typical 30-year-old and 64-year-old, earning identical amounts of money, living in the same place, and choosing the same health plan. Who will pay more for that health care plan under Obamacare?

No one would dispute that 30-year-olds have much lower health care costs than 64-year-olds, on average. A compelling illustration comes from a highly cited article using the National Medical Expenditure Survey; the authors show that health care costs for 64-year-old women and men are approximately 2 to 4 times that their 30-year-old counterparts (Cutler and Gruber, 1996, p. 429). A natural implication is that groups with higher expected medical costs (such as older individuals), will tend to face higher health care premiums than those with lower expected medical costs (such as younger individuals).

A quick quiz:

  • First, take a 30-year-old and 64-year-old living in Florence, Wisconsin, each of whom is purchasing health insurance on the federal exchange. If they have the same income of $41,000, are non-smokers, and choose the exact same plan, which one faces higher premiums ignoring subsidies?
  • Second, who pays more out of their own pocket, once Obamacare subsidies are included?

The answer to the first question is easy. The 64-year-old faces higher premiums. For example, if the 64-year-old purchased the Molina Marketplace Bronze Plan, he or she would face nearly $7,400 in premiums without subsidies. A 30-year-old would pay around $2,800 for the same plan.

The second question’s answer may surprise you. Obamacare gives large subsidies for people with incomes between 100% and 400% of the federal poverty line. The more you make, the more you pay for a given plan. But Obamacare gives subsidies that are pegged to a generous benchmark plan (the second lowest cost silver plan). Costs, premiums and subsidies will all be higher for the generous benchmark plan for an older individual than a younger one. However, the subsidy amount can be applied to less generous plans, and this can lead to the surprising result that an older person actually pays less out of their own pocket.

Criminal Law 2.0

Alex Kozinski, a federal appellate judge on the Ninth Circuit, has just published a powerful critique of the American criminal justice system in the Georgetown Law Journal (titled “Criminal Law 2.0”).  He begins, “much of the so-called wisdom that has been handed down to us about the workings of the legal system, and the criminal process in particular, has been undermined by experience, legal scholarship, and common sense.” 

The Security Implications of Grexit

This weekend’s news was dominated by the sorry tale of Greece, where a referendum on whether to accept the terms of a new European Union bailout failed by a landslide. Now Greece’s Eurozone creditors face the uneasy choice between offering a more generous bailout plan, or accepting a Greek departure from the Euro.

Sunday’s referendum was just the latest debacle in the five-year tug-of-war between Greece and other Eurozone members. The ruling Syriza party has been openly hostile to the austerity-focused conditions of EU bailout loans – which run counter to their left-leaning economic agenda – as well as to the EU negotiation process itself. The spur-of-the-moment referendum was itself largely a surreal PR stunt: the deal voters were evaluating had in fact been withdrawn by the EU prior to Sunday’s vote.

Unfortunately, the situation in Greece is untenable. Banks remain shut, and ATM users can withdraw only 60 euros a day. The country defaulted on its IMF loans last week, the first advanced industrialized economy to ever do so. An emergency summit of Eurozone leaders is convening on Tuesday to hear new Greek proposals, but it is unclear whether German leaders in particular can be convinced to accept a more generous bailout deal. Failing that, Greece will begin its Eurozone exit, creating turmoil in international markets.

But as I wrote over at CNN.com, “Grexit” would result in more than just financial problems. Greece’s exit from the Eurozone is likely to draw it closer to Russia, with security implications for other EU and NATO member states.

Ties have been growing between Athens and Moscow in recent months:

“During his visit last month at the St. Petersburg International Economic Forum, for example, Greek Prime Minister Alexis Tsipras spoke of the Greek and Russian relationship, hinting that Greece was “ready to go to new seas to reach new safe ports… the Russian energy minister just recently announced a $2.77 billion pipeline project in Greece, and Moscow followed this with an informal invitation to Greece to join the BRICs’ New Development Bank.”

Given its current economic problems, Russia cannot afford to bail Greece out entirely. But it could certainly provide funding for sizable infrastructure projects.  

In the short-term, Grexit would certainly be a boon to Russian propagandists:

“allowing anchors on Russian state TV to highlight further evidence of the decline of the European Union and of Western civilization more broadly.” 

And in the longer-term, a Russia-friendly Greek government could even act as a spoiler within the EU and within NATO, including a veto over any extension of sanctions on Russia.

Until this point, the White House has largely avoided commenting on the Greek crisis, other than reassurances that U.S. banks are largely insulated. But as Eurozone leaders make the final choice on Greece’s future, U.S. leaders would do well to consider how a Grexit could impact U.S. security aims in Europe.

You can read the whole piece on the security implications of the Greek crisis here.

South Carolina Should Move the Confederate Flag

The South Carolina Senate has voted to remove the Confederate battle flag from the grounds of the state capitol. The House still has to vote, and Gov. Nikki Haley has already urged that the flag be moved. The flag was moved from its position atop the capitol dome back in 2000. Now it’s time to move it entirely off the capitol grounds.

In 2001, 64 percent of Mississippi voters chose to keep the Confederate battle cross in their official state flag. At the time I wrote:

It seems that I have every reason to side with the defenders of the flag: I grew up in the South during the centennial of the Civil War—or, as we called it, the War Between the States, or in particularly defiant moments, the War of Northern Aggression. My great-grandfather was a Confederate sympathizer whose movements were limited by the occupying Union army. I’ve campaigned against political correctness and the federal leviathan. I think there’s a good case for secession in the government of a free people. I even wrote a college paper on the ways in which the Confederate Constitution was superior to the U.S. Constitution.

Much as I’d like to join this latest crusade for Southern heritage and defiance of the federal government, though, I keep coming back to one question: What does the flag mean?

I noted that defenders of the 1894 flag and other public displays of Confederate flags

say that the Civil War was about states’ rights, or taxes, or tariffs or the meaning of the Constitution. Indeed, it was about all those things. But at bottom the South seceded, not over some abstract notion of states’ rights, but over the right of the Southern states to practice human slavery. As Gov. James S. Gilmore III of Virginia put it in his proclamation commemorating the Civil War, “Had there been no slavery, there would have been no war.” Mississippi didn’t go to war for lower tariffs or for constitutional theory; it went to war to protect white Mississippians’ right to buy and sell black Mississippians.

We still hear those claims: the Confederate flag stands for history, states’ rights, resistance to an overbearing federal government, Southern pride. For some people it probably does. But those who seceded from the United States and formed the Confederate States of America were pretty clear about what they were seeking.

Oh, the Hyperbole!

I’m generally a fan of the efforts by WikiLeaks to publish secret government documents.  There may be times where particular documents are too sensitive to put out there, but for the most part I think the government is being unnecessarily secretive.

However, in terms of commentary on the documents it publishes, WikiLeaks doesn’t always know what it is talking about.  Here is what it said recently about a draft text of an international negotation on freeing up trade in services (the Trade in Services Agreement, or TiSA):

Today, 1500 CEST Wednesday, 1 July 2015, WikiLeaks releases a modern journalistic holy grail: the secret Core Text for the largest ‘trade deal’ in history, the TiSA (Trade In Services Agreement), whose 52 nations together comprise two-thirds of global GDP. The negotiating parties are the United States, the 28 members of the European Union and 23 other countries, including Turkey, Mexico, Canada, Australia, Pakistan, Taiwan and Israel.

While the proposed Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Pact (TTIP) have become well known in recent months, the TiSA is the largest component of the United States’ strategic neoliberal ‘trade’ treaty triumvirate. Together, the three treaties form not only a new legal order shaped for transnational corporations, but a new economic “grand enclosure”, which excludes China and all other BRICS countries.

Wow, “a new legal order shaped for transnational corporations”! That sounds scary! We better avoid that!

It also sounds like a massive exaggeration of what’s in the legal text. WikiLeaks seems to be taking the view of one trade critic as fact. There are certainly arguments that, in their efforts to promote free international trade in services, the governments working on this treaty haven’t gotten the balance between economic efficiency and national autonomy exactly right. But I think the right approach for WikiLeaks, instead of assuming a massive corporate conspiracy, is to publish the documents it finds and then offer to host a discussion among various experts about what the text actually says and what its impact will be.

Police Misconduct — The Worst Case in June

Over at Cato’s Police Misconduct web site, we have identified the worst case for June.  It goes to the police department in Carrollton, Kentucky.

Adam Horine was a homeless person who was arrested for some petty offense. Horine then appeared before Judge Elizabeth Chandler to determine whether he wanted to go to trial, or plead guilty to the charges. Horine said he wanted to represent himself in the case and he gave the judge some rambling answers to her questions. Horine indicated that he had problems and did not seem angry when the judge ordered that he be sent to a hospital for a mental health evaluation.

This is when things took a bizzare turn. Instead of following the judge’s order, the local police chief, Michael Willhoite, had one of his deputies put Horine, against his wishes, on a 28 hour bus ride to Florida. No one accompanied Horine on the bus and no one was expected to meet him when the bus trip ended in Florida. The idea seemed to be to push their problem prisoner on someone else. (One wonders whether that was the first time that this “police technique” was used.)

Adding insult to injury, the police would later charge Horine with a new crime, “escape from custody” – even though the police themselves purchased the bus ticket and placed the mentally distressed Horine on the bus.