Despite the claims of immigration opponents such as Arizona Gov. Jan Brewer, the rate of violent crime at the border and across Arizona has been dropping in the past few years, the New York Times reports — a fact you could have read here at Cato@Liberty back on April 27 and May 25.

Notwithstanding the efforts of four brave congressmen, the belated concession to reality by House Agriculture Committee Chairman Collin Peterson, and the misgivings of trade analysts including myself, it appears that the “temporary” deal struck by Brazil and the United States in April to ward off Brazil’s retaliation for WTO-illegal U.S. cotton supports is here to stay:

The government said a deal agreed between the two countries in April to head off up to $829 million in World Trade Organization-sanctioned retaliation against U.S. goods would stay in place until a new U.S. farm bill is passed [in 2012]…

“Brazil doesn’t rule out taking countermeasures at any moment,” Roberto Azevedo, Brazil’s envoy to the World Trade Organization, told reporters in Brasilia. “It is just a suspension of this right”.

He said Brazil could retaliate at any time if the United States did not uphold the agreement, but added that Brazil had no interest in retaliating.

“This process of negotiation and reform is better than retaliation that doesn’t bring benefits to anyone in Brazil’s private sector.” [Reuters]

You will recall that the deal includes about $147 million worth of taxpayers’ money given to Brazilian cotton farmers in the form of “technical assistance,” just so we can continue our own insane cotton support programs without fear of U.S. exporters (including holders of patents and copyrights) being hit by retaliatory trade barriers and unpunished piracy.

Brazil in some senses has the right idea, of course. They recognize, correctly, that retaliation in the form of increased tariffs on American imports only hurts their own consumers, hence their stated desire for “negotiation and reform” instead of santions. But they sure do have a lot of faith in the willingness of Congress to enact reform without serious pressure from, among others, aggrieved trade partners.

I hope their faith and saint-like patience is rewarded. In the meantime, we have (at least) two more years of subsidizing Brazilan farmers in addition to our own.

Former Reagan speechwriter Peter Robinson tries to answer that very good question in an op-ed in today’s Wall Street Journal. It’s a question my conservative Republican friends should ask themselves as the party tries, once again, to turn public opposition to illegal immigration into political success at the polls.

Robinson correctly observes that Reagan would have had nothing to do with the anger and inflamed rhetoric that so often marks the immigration debate today. “Ronald Reagan was no kind of nativist,” he concludes, noting that Reagan was always reaching out to voters beyond the traditional Republican base, including the fast-growing Hispanic population.

It’s worth remembering that Reagan signed the 1986 Immigration Reform and Control Act (IRCA), which opened the door to citizenship for nearly 3 million people who had been living in the country illegally. Robinson is confident Reagan would have supported the kind of comprehensive immigration reform championed by President George W. Bush and approved by the Senate in 2006.

For the record, I made similar observations and included a few of the same Reagan quotes in an op-ed I wrote soon after Reagan’s passing in June 2004

My only quibble with Robinson is his assertion that Reagan would have insisted that we successfully enforce the current immigration law first before contemplating any changes. It’s true that the 1986 IRCA contained new enforcement measures and launched an exponential rise in spending on border enforcement. But by all accounts the 1986 law failed to stem the inflow of illegal immigration.

My hunch is that President Reagan would not have simply favored spending more money on an approach that has so clearly failed to deliver. Although he embraced the conservative label, Reagan was always ready to challenge the status quo and change the law to further his vision of a free society and limited government.

I wish more of the Gipper’s admirers today shared his benevolent attitude toward immigration.

The drums of a trade war with China are beating more loudly in Congress this week. Sen. Chuck Schumer, D‑N.Y., is threatening to introduce a bill in the next two weeks that would raise tariffs on imports from China if it does not quickly appreciate the value of its currency, the yuan.

The argument behind the bill is that an artificially cheap yuan makes Chinese goods too attractive for struggling American consumers, to the disadvantage of certain U.S. companies that would prefer to charge us higher prices, while it stifles U.S. exports to China.

The latest monthly trade report, released yesterday by the U.S. Department of Commerce, should give pause to those who want to punish China for its currency policies.

In the first four months of 2010, compared to the same period in 2009, U.S. exports of goods and services to China were up 41 percent. That is twice the rate of growth of our exports to the rest of the world excluding China.

Meanwhile, imports from China were up 14 percent year-to-date, compared to a 25 percent increase in imports from the rest of the world. As a result, while our trade deficit with all other countries grew by 46 percent, from $78 billion to $114 billion, our trade deficit with China grew only 6 percent, from $67 billion to $71 billion.

A more flexible, market-driven yuan would be welcome, for all the reasons we’ve written about at the Center for Trade Policy Studies, but its current rate is not an excuse for raising trade barriers.

The Consumer Price Index (CPI‑U) for “All Items” rose by about 23 percent over the course of the last decade.* That implies that—on average—a person whose salary was $50,000 in 2000 saw his real income rise (fall) if his nominal income was more (less) than $61,500 in 2009. By the same measure, an hourly worker earning $20 per hour in 2000 had to be earning more than $24.60 per hour in 2009 to have experienced an increase in his real wage.

Of course the CPI‑U for “All Items” reflects the prices of a broad basket of products and services, many of which are not consumed by everyone, every year. Each worker as a consumer purchases a unique basket of goods and services over the course of a year, so technically, a personalized CPI comprising the prices of products and services actually consumed would provide a more accurate picture of changes to individual real incomes.

As the pictures below so clearly demonstrate, consumers who spend more of their incomes on products that are more likely to be imported get more buying power from the dollars they earn than do consumers who devote more of their budgets to products and services that are more difficult for foreigners to supply.

There is lots of competition from foreigner suppliers for the dollars we spend on televisions, photographic equipment, computer software, toys, clothing, furniture, automobiles, and furnishings, but virtually no such competition for our expenditures on movie tickets, auto repairs, dental services, trash collection, household electricity, medical services, and college tuition. And prices have responded accordingly.

Of course most individual consumption baskets include products from both of the charts above. The lesson here is that if we want to see prices kept in check, we should stop demonizing imports and stop throwing obstacles in their path. And we should do what we can to encourage more competition—both foreign and domestic—because more and taller blue bars, and fewer and shorter red bars, help raise real incomes.

* The CPI changes for “All Items” and all of the products listed in the subsequent charts were calculated from Bureau of Labor Statistics data by averaging the official CPI‑U figures for the years 2000 and 2001, and comparing that result to the average CPI‑U figures for the years 2008 and 2009. This was done to mitigate the effects of any anomalous price spikes or troughs in the first or last year of the decade.

Further to Tom Palmer’s illuminating post entitled “How to Explain Free Trade in Less Than Three Minutes,” let me add that, occasionally, skeptical professors, teachers, and our favorite protectionists muster up retorts to our sensible arguments. And sometimes further elaboration and exposition are necessary before we can convincingly dispense with those objections.

For those occasions, you will be happy to have been acquainted with the work of the Cato Institute’s Center for Trade Policy Studies, which has been producing arrows for free trade quivers for 12 years. Given the persistence of myths that feed trade’s skeptics, eradication of protectionism requires that our arguments appeal to those who can be convinced in three minutes, as well as those who may be more stubborn.

The professionally ignorant (and I’m thinking here of Lou Dobbs, among others) never “get it” about trade. They think it’s some complex swindle, in which we deny ourselves “jobs,” or that it should be about being “fair” or “balanced.” They don’t see how free trade creates prosperity and peace. I was inspired by the outstanding trade economist Doug Irwin of Dartmouth to explain what goes on when people trade. The challenge was to explain international trade in under 3 minutes. So here’s the result in 2:57: The Great Prosperity Machine.

Share it with your favorite protectionist, or with professors and teachers. (There’s more information at Atlas​Net​work​.org/​B​a​s​t​i​a​t​L​egacy.)

Watch and share: