That Mobile Line in the Sand

In a recent post and in this Washington Times commentary today, I note that there is less than meets the eye with respect to last week’s “grand deal” to include labor and environmental provisions in trade agreements reached between congressional Democrats and the White House.  (That’s not to say its unimportant — it is significant, and also regrettable).

One of my points (implicit as it may be) is that caving on labor and the environment would not be enough to warm Congress to the benefits of trade liberalization.  What was pitched to the press as the final price to win Congressional support for the administration’s trade agenda was merely the admission fee.  More demands would be forthcoming.

Alas, today members of Congress (22 Ds, including the trade leadership and 20 Rs) petitioned the U.S. Trade Representative to launch a Section 301 investigation into Chinese currency manipulation.  The petition is touted as “one last chance” for the Bush administration to act on the currency manipulation issue before legislation effectively mandating that conclusion, along with sanctions, is moved in Congress.

I can already see the words of Ways and Means trade subcommittee chairman Sander Levin (D-MI) when the USTR turns down today’s 301 petition.  “How can any member of Congress in his right mind vote to support any more trade agreements when this administration is unwilling to stand up for the working men and women of America?”

Of the four pending bilateral trade agreements (Korea, Colombia, Peru, and Panama), I’m betting exactly none will become reality during this presidency and beyond.

Tony Blair on Global Warming

This morning on NPR’s Morning Edition, we were treated to an interview with outgoing British Prime Minister Tony Blair. The conversation touched on a number of rather predictable subjects, but the discussion of global warming is worth noting. Here, we find Tony Blair at his best — and worst.

Tony the Sensible: Even if Great Britain were to shut down its economy and zero-out all greenhouse gas emissions, growth of those emissions in China would wipe out Britain’s greenhouse gas reductions within about two years. So without an international agreement binding all global actors of note, nothing that any OECD government might do will have much effect on future temperatures.

Tony the Lunatic: The world’s inability to execute a global agreement to seriously reduce greenhouse gas emissions is fueling Islamic terrorism.

Huh? I didn’t know that al Qaeda, Hezbollah, or Hamas has linked up with Greenpeace. Must have missed that in those periodic tirades coming out of Pakistani caves.

I can see it now:

Abdul: “We must strike out at the Crusader/Zionist oppressors and impose the word of Allah and the Koran on the nonbelievers and the Arabic lackeys of the Christian imperialists.”

Muhammad: “Wait Abdul! The Kyoto Protocol has been ratified by a new American admistration and China and India are likely to cut back on their coal consumption as a consequence! I no longer have the heart for jihad. Let us open a falafel business instead.”

Solving the Organ Shortage: A Move in the Right Direction

Jon Christiansen, a former Republican congressman from Nebraska, has founded an organization to create grassroots initiatives to help overcome resistance to providing organ donors with financial compensation.

Currently, under the National Organ Transplantation Act, it is illegal to provide “valuable consideration” for an organ. As a result, only altruistic donations are allowed and an average of seven people die every day waiting for an organ that never comes.

Christiansen’s new organization is called the American Organ Coalition. Christiansen, who is the group’s executive director, can be contacted by e-mail at jonlc [at] united [dot] net">jonlc [at] united [dot] net.

New Zealand Tax Reform

In yet another sign of the liberalizing impact of tax competition, New Zealand lawmakers are lowering the nation’s corporate tax rate and moving toward a territorial tax regime (the common-sense approach of only taxing income earned inside national borders).

Kiwi officials openly admit that these reforms are driven by a need to compete with other nations, further confirming the need to protect and promote fiscal rivalry from the anti-competition schemes of international bureaucracies such as the Organization for Economic Cooperation and Development.

Tax-news.com reports on the New Zealand reforms: 

New Zealand Finance Minister Michael Cullen has announced a 3% cut in the country’s rate of corporate income tax along with a series of other measures designed to improve the nation’s international business competitiveness.

The most significant component of Cullen’s 2007 Budget, announced in parliament on Thursday, was the decision to reduce the rate of corporate tax to 30% from April 1, 2008. ”Business has long argued that such a reduction will assist in boosting productivity and competitiveness and attracting more foreign direct investment increasing labour productivity and wage rates,” Cullen stated, adding that the move would also “reduce the attractiveness of structuring businesses so as to report minimal profits within New Zealand.”

…[A]ccording to Cullen, the review of the international business tax regime could be of greater significance than the corporate rate cut or the research and development tax credit in contributing to future economic growth and could cost far less. “Our current tax rules in relation to New Zealand companies investing in offshore activity impose additional costs that are not faced by businesses resident in other countries. This has created an incentive for New Zealand firms to migrate,” Cullen observed. Currently, New Zealand taxes New Zealand residents on their worldwide income. This includes any income that is earned by a foreign company that is controlled by New Zealand residents.

Immigration Reform = National ID?

Yesterday’s “breakthrough” on comprehensive immigration reform is indeed salutary. But as the Washington Post editorializes this morning, “It’s critical that in addressing one set of immigration problems, the legislation doesn’t create a new set.”

One potential problem is the creation of a national ID in the process of expanding worker surveillance for intensified internal enforcement. This was the subject of a hearing in the House Immigration Subcommittee at which I recently testified.

Like many, I’ll be watching carefully to see if a national ID system is part of the ineluctable logic of the immigration reform deal that has been struck. Ineluctably, I’ll be calling it like I see it.

End the Postal Service Monopoly

A recent column in The (Baltimore) Sun explains why the government should not have a monopoly on mail delivery. The column focuses on the theoretical case for private competition.

Two political obstacles stand in the way of making private mail a reality. The first problem is that there are hundreds of thousands of Postal Service employees, and they receive exorbitant compensation packages. Needless to say, they are an automatic constituency against reform. The second problem is that the current monopoly subsidizes rural areas at the expense of urban areas. This means politicians from places like Alaska will fight to keep the monopoly in place.

Principled leadership could make a difference in this fight, but that is in short supply in Washington:

Sure, government is growing and putting its nose into all sorts of new things all the time, but there are very few businesses the government runs entirely, as it does with first-class mail delivery. Most of the important stuff Americans buy — food, clothing, and shelter — is produced almost entirely by the private sector. The result? Nearly everyone is fed, clothed and housed. What’s so special about mail delivery that the government must do it?

[C]ompanies such as FedEx and UPS can deliver packages, which could include letters — but they are limited by law to “extremely urgent” letters (such as overnight deliveries) and forced by law to keep their prices much higher than those of the post office. The postal monopoly costs you, me and all of us who have no choice but to be the post office’s customers if we want to send standard letters, and yet the post office still can’t come close to breaking even.

Meanwhile, the inflation-adjusted cost of other things has plummeted. Consider how much a long-distance telephone call costs compared with 10, 20 or 30 years ago. The price of gasoline seems to keep going up, but adjusted for inflation it has mostly gone down over the decades.

The Washington Post vs. Milton Friedman

Actually, it’s the Post’s education columnist Jay Mathews vs. the Milton and Rose Friedman Foundation’s executive director, Robert Enlow, in a school choice debate being held at Edspresso.com. Robert gets the best of this exchange.

Jay is generally a reasonable guy, and so, naturally, supports school choice programs that allow families to easily choose the public or private school that best serves their kids. His two failings in this debate are: not grasping the transformative nature of a large scale market reform, and allowing his own sense of futility about the prospects for change to color the school choice movement’s real potential.

As do most journalists, Mathews confuses the existing niche of non-profit private schools, and existing tiny voucher programs, with the kind of vibrant, large-scale, significantly for-profit market that could arise under a well-designed statewide school choice program. I explained the difference in this blog post.

It’s also easy to sympathize with how tired Mathews sounds when talking about the futility of real reform in k-12 government schooling. He’s been writing this beat for a long time, and change has been miniscule thus far. But what Mathews seems not to have noticed is that the school choice movement has been steadily growing, and steadily introducing and passing more programs over the past twenty years. For every battle-hardened veteran of the movement that is beginning to tire, there are several sharp new researchers, analysts, and campaigners coming forward to carry on the standard. Not just in the United States, but everywhere from England to India.

Utah may be the first U.S. state to implement a universal school choice program, but even if its program is reversed, another will follow. It’s inevitable. The status quo system will continue to consume more and more money without showing improvement, as it has done for generations now, and eventually people in one of our fifty states will decide they’ve had enough. Once one state tastes educational freedom, and reaps its benefits, the others will fall like dominos to the exigencies of economic and demographic competition.

Perhaps not tomorrow, or next year, but probably within the next ten or twenty, chunks of government school district headquarters will be sold for their historical value on eBay – like relics of the Berlin Wall. And public education will finally be delivered through a market system that can live up to its ideals, rather than by the moribund monopoly we’ve been saddled with for the last century-and-a-half.