Tariff Bill Would Punish Millions of American Families

In an op-ed in today’s Wall Street Journal (subscription req.), Senators Charles Schumer (D-N.Y.) and Lindsey Graham (R-S.C.) threaten to demand a vote on their bill that would drastically raise tariffs on imports from China if the Chinese government does not move quickly to strengthen the value of its currency.           

The senators claim that China’s currency, the yuan, is 15 to 40 percent undervalued against the dollar, giving Chinese imports an unfair advantage in the U.S. market and discouraging U.S. exports to China. China revalued its currency by 2.1 percent last summer and it has appreciated another 2 percent since then, but the senators say this is not enough. They blame China’s currency for our large bilateral trade deficit with China and the loss of U.S. manufacturing jobs. Their bill would impose a hefty 27.5 percent tariff if China does not sharply revalue its currency within six months after the bill’s passage.

In a Cato Trade Briefing Paper, “Who’s Manipulating Whom?” published in July, I documented the fact that imports from China have not reduced America’s overall manufacturing output. In fact, since China fixed its currency in 1994, real output at U.S. factories has actually increased by 50 percent. The sectors where China is most competitive—lower-end, labor-intensive goods such as shoes, clothing, and toys—have been in decline in the United States for decades. Goods we used to import from other countries anyway are now imported directly from China. U.S. factories employ fewer workers than they did a decade ago not primarily because of imports from China but because remaining workers are so much more productive.

Imposing the steep tariff called for in the senators’ bill would surely hurt workers and producers in China, but it would also victimize millions of American consumers. More than three-quarters of what we imported from China last year were goods Americans use every day in their homes and offices—not only all those shoes, clothing items, and toys, but also sporting goods, bicycles, TVs, radios, stereos, and personal and laptop computers. The Schumer-Graham bill would be a direct, regressive tax on millions of low- and middle-income American families. It would also jeopardize tens of billions of dollars of sales American companies now make in China, our major, growing export market.

Chances are slim that the Schumer-Graham bill will become law anytime soon, but the fact that such a reckless piece of legislation would be considered on the floor of the Senate should be as troubling to Americans as to the Chinese.

Doctors without Borders

I have to join Ezra Klein in copying in its entirety this Dean Baker post to The American Prospect’s blog Tapped:

NPR had a piece this morning on the possibiity that Medicare reimbursements for doctors will be cut. It told listeners that if this cut went into effect, then there may be a shortage of doctors who are willing to serve Medicare beneficiaries.

In other contexts, such as supplies of farm workers, custodians, and restaurant workers, NPR has told listeners that shortages meant that the country needed immigrant workers. No one interviewed for this segment mentioned the possibility of more immigrant doctors, even though doctors receive much higher pay in the United States than they do in the developing world, or even Europe. Surely, if the United States worked to eliminate the barriers that make it difficult for foreigners to train to U.S. standards and practice in the United States, there would be large numbers of foreign physicians who would be willing to do the work that NPR tells us American workers do not want to do.

The great thing about economic models is that you can use the same models for almost anything, you just have to change the words that appear on the axis. If getting immigrants, who will accept low pay, to work in our farms and factories makes economic sense, then getting foreign doctors, who are willing to accept low pay, also makes sense. Maybe NPR will one day get reporters who know economics, if we elimiante [sic] barriers to trade among journalists.

Perhaps a cut in Medicare reimbursements could spark a conversation about liberalizing immigration and licensure restrictions on physicians and allied health professionals.

Tell Me That’s Not Your Final Answer

The congressionally chartered “Citizens’ Health Care Working Group” today released its final recommendations on how to reform America’s health care sector. (I commented on their interim recommendations here and here.)

As with many GOP-led health care reform efforts, this one began with leftist premises about the role of government. Recommendation #1 is that the federal government should “Establish Public Policy that All Americans Have Affordable Health Care.” Recommendation #2 is that the feds should “Guarantee Financial Protection Against Very High Health Care Costs.” (The group inadvertently neglected to cite any passage from the U.S. Constitution that actually grants Congress the power to do such things.)

Given those premises, there was little doubt that the group would recommend left-wing reforms. For example, the group claims to have developed both a “market–based model” and a “social insurance model” for achieving universal coverage. Yet the former is a mirror image of the statist Massachusetts health plan. What kind of “market-based model” increases taxes and government spending while forcing individuals to purchase government-defined insurance policies? Good grief.

I would give my right eye for a health care reform panel that would make this its charter:

To make health care of ever-increasing quality available to an ever-increasing number of people.

To me, that doesn’t just seem simple and non-controversial, it seems to be what everyone involved in health policy wants.

Moreover, a mission like that would force the panel to consider not just the goodness of its intentions, its knowledge of today’s health care sector, or its ability to do math, but also the incentives that its recommendations would create, and their long-term impact.

Let’s hope some enterprising panel-creator is reading this.

The Cato Policy Analyst Who (May Have) Saved a Man’s Life

Who is Cory Maye? He’s a Mississippi man sentenced to death in 2004 for shooting a police officer in a botched, forced-entry drug raid on his apartment. The circumstances look very much like self-defense: a man asleep in his home with his 18-month-old daughter reached for a gun when someone kicked down his door late at night. Maye shot three times into the darkness and killed a police officer. Capital murder, or tragic mistake?

If you’ve heard of the Cory Maye case, it’s almost certainly due to the tireless efforts of Cato Institute policy analyst Radley Balko, who, during the course of researching a Cato policy study on paramilitary drug raids, came across reports of Maye’s conviction, got suspicious, and started digging. If you haven’t heard of the Cory Maye case by now, this will get you started:

At 11 p.m. on the night of December 26, 2001, Ron Jones along with other police officers and 1 agent employed by the Pearl River Basin Narcotics Task Force, a four-county police agency responsible for drug enforcement, went to Maye’s duplex for the purpose of drug interdiction. Jones, though not a member of the Task Force, had received a confidential tip that large quantities of marijuana were being stored and sold in the apartment of Jamie Smith, who lived in the other half of the duplex. The officers obtained search warrants for both apartments. Whether the warrants legally allowed for a no-knock entry is still not clear….

There is disagreement about what happened next. The officers then either served the warrant on Maye’s half of the duplex (later, prosecutors would say both were served simultaneously) or entered what they thought was another door to Smith’s in search of more contraband. Four of the officers who took part in the raid testified they knocked on Maye’s door and identified themselves as law enforcement officers.

Maye testified he heard neither knocks on his door nor anyone announce themselves. Maye testified he was asleep on a chair in the living room when he heard a crash, prompting him to run to his daughter’s bedroom and ready a .380-caliber pistol that he kept boxed and unclipped on top of a tall headboard. When Jones burst into the bedroom, Maye fired three times. Jones was wearing a bulletproof vest, but one bullet hit just below the vest, and the injury proved fatal.

Maye had no criminal record, and police found no evidence of drug dealing. They found only the remnants of one marijuana cigarette. Officer Jones was the police chief’s son. For what it’s worth–and in this case, it’s perhaps a lot–Jones was white, Maye is black. In this recent article for Reason magazine, Radley provides the case against the case against Cory Maye. It is, to put it mildly, hard to believe that a man in no real legal jeopardy would decide to shoot one police officer and then surrender. At the very least, we know enough to say that this man should not be executed.

And, as of last Thursday, it seems that he will not be. A Mississippi Circuit Court judge just threw out Maye’s death sentence on the grounds of inadequate assistance of counsel. I write “seems” and I put “May Have” in this post’s title as a way of knocking wood: Cory Maye could still be sentenced to death again at the rehearing. Unlikely, but possible.

The judge will later rule on the other arguments presented by Maye’s defense team. Maye’s reprieve–temporary or permanent–was made possible by the attention Radley drew to the case on his personal weblog. His posts there piqued the interest of an associate at the white-shoe law firm of Covington and Burling, who then joined local counsel Bob Evans to become part of Maye’s legal team. Congratulations to them, and let’s hope Thursday’s victory draws still more attention to the Maye case, and that they’ll eventually be able to get Maye out of jail.

And if any good can come out of the Maye case, perhaps it can draw attention to the larger issues surrounding the War on Drugs. That war has, as Radley has documented, increasingly shifted from metaphor to reality. And as paramilitary policing tactics and the warrior mindset have infected law enforcement at all levels, the bodies have mounted. Cory Maye could have been–may still become–collateral damage in that war. But for now, thanks to Thursday’s victory, he has new reason to hope.

Roberts and Pro-Executive Minimalism

Over the weekend, L.A. Times Supreme Court reporter David Savage criticized John Roberts for breaking his pledge to be a minimalist judge, pointing to the Chief’s votes with the “conservative” majority in Gonzales v. Oregon and Rapanos v. United States as evidence of his hypocrisy. Ilya Somin and Orin Kerr critique Savage here and here. Ilya, in particular, makes a good point:

Roberts[’] position in Rapanos was that the Corps has very broad discretion under the CWA’s grant of power to regulate discharges into “navigable waters,” but not the power to assert what he rightly called virtually “boundless” regulatory authority. The Corps had claimed the right to regulate virtually any body of water, no matter how small, remote, or nonnavigable, and had persisted in this stance in the face of an adverse Supreme Court decision. No broad assertions of judicial power here.

[H]is positions were hardly contrary to “judicial modesty.” Indeed, in my view, a stronger criticism of Roberts’ performance is that he was too deferential to assertions of federal authority in both cases, particularly Oregon.

See my recent short piece, and earlier blog post, on Roberts’ Rapanos concurrence here for more in that vein.

The confusion points out that “judicial minimalism” can mean different things. Here are just two (of several) possible meanings:

  1. Minimalism could mean protecting expectations created by current precedent, or current understanding of precedent, by reading new, potentially revolutionary decisions, like Raich, narrowly rather than broadly. In fact, Cato’s amicus brief in Gonzales v. Oregon tried to portray a vote for Oregon as a minimalist decision in this sense, arguing that Raich should be read as narrowly as possible in order to protect the pre-Raich expectation of states.
  2. Minimalism could be read to mean that courts should displace democratic politics, rather than floating “expectation interests,” as little as possible, by deciding “no more than is necessary,” leaving as much of a class of questions implicated by the case as possible to democratic judgment. This is much closer to what Roberts appears to believe, and his votes in both Oregon and Rapanos are consistent with this version—carving out as much room for a (federal) political response to the problem as possible.

Notably, though, even if you accepted version two, you could reach a pro-state outcome. Again, Cato’s amicus brief tried to make such a connection by portraying a narrow reading of Raich in that case as a reading favoring the decisionmakers with the superior democratic pedigree—that is, Oregon voters who, by direct referendum, had voted for legalizing assisted dying (twice). Even if agencies have a greater democratic pedigree than courts, state referenda have a far better democratic pedigree than the rulings of federal agencies.

The upshot is that minimalism is an indeterminate concept, less a theory of judging than a mood or intuition whose outcome depends on unexpressed background preferences. Oregon suggests that Roberts’ operative background preference is to preserve the flexibility of agencies under executive control by weighting their interests more than competing state interests when the law is open-textured. Perhaps, this might be called a kind of pro-executive minimalism.

Harpers Denounce Border Plan, ID Systems

A prominent Harper spoke out this week against the plan to require passports or passport-‘lite’ ID cards for crossing the U.S.-Canada border. That’s Canadian Prime Minister Stephen Harper. 

He is no relation to the Cato Institute’s director of information policy studies, Jim Harper, who spoke out about the Western Hemisphere Travel Initiative’s PASS card system two weeks ago

The Western Hemisphere Travel Initiative (WHTI) sounds like a wonderful thing. It’s hard to be against travel. But WHTI is actually about shrinking commerce and travel among the friendly countries in our region.

In the Intelligence Reform and Terrorism Prevention Act of 2004, Congress pushed the Department of Homeland Security to create an “automated biometric entry and exit data system” for people crossing the borders. A prominent proposal is the PASS card, which stands for People Access Security Service. It is envisioned as a card containing an RFID chip that is to be given to passport holders. The chip would alert the DHS when a person arrives at a border crossing. 

“Pre-positioning” data by sending an electronic signal from 30 or more feet sounds like it would make border crossings go faster. But moving identification data is not what takes time at border crossings — it’s checking to see if the person and the identity information match up. 

An RFID-chipped PASS card would mean that lots more information about American citizens’ movements would be collected. It’s a system not just verifying that travelers are citizens or legal aliens — it’s a system for collecting information about our comings and goings, yet another dimension of our lives revealed to the government to do with as it will.

Congress seems held in thrall by national ID systems. Last week, the House passed a bill to require showing identification cards for voting. And, of course, we already have the REAL ID Act, which by May 2008 will have states issuing drivers’ licenses and ID cards to national standards (sharing driver information nationwide, too) — if states comply. Harper of the Cato Institute testified to a New Mexico legislative committee about that issue last week. The National Conference of State Legislatures reports that compliance with the REAL ID Act will cost $11 billion dollars nationwide.

Identification seems to offer an easy technological quick-fix for ailments like illegal immigration and terrorism. But what most of these schemes would do is further regiment and control law-abiding people while merely inconveninencing criminals, terrorists, and any other threat with a modicum of sophistication and motivation.

My book Identity Crisis has more on this and all other facets of identification.

Aside from That, Mrs. Lincoln, How Did You Enjoy the Show?

A website called TheBudgetGraph.com offers a visual representation of federal spending based on President Bush’s proposed budget for fiscal year 2007. (Click here, then click on “View the Graph.”) It is truly a monstrosity.

But look more closely and you’ll notice that it only counts budget items to which Congress must fix a dollar amount every year. It completely ignores those parts of the federal budget where the dollar amount is set automatically by formula. (Those two categories are usually called “discretionary” versus “mandatory” expenditures, but that bifurcation is misleading. Nearly all expenditures are discretionary, with the possible exception of interest payments on the national debt.)

That latter category — which includes Social Security, Medicare, Medicaid, interest payments on the debt, etc. — comprises 63 percent of the federal budget. That makes “The Budget Graph” more like “a visual guide to where one-third of your federal tax dollars go.”

Were the graph to count the entire budget, heck, I’d probably buy the poster.

(HT: Frederic Sautet.)