Earlier this week, Rep. Phil English (R-Pa.) introduced some of the most cynical trade legislation in recent memory. Simply put, English's bill and a Doha Round agreement are mutually exclusive.
English calls for significantly lowering the already laughably lax evidentiary thresholds (described by Brink Lindsey and me here, here, here, here, here, here, here, and here) required to impose antidumping, countervailing duty, and safeguard protection. The legislation collides head on with the practical requirement of the Doha negotiating mandate that those rules be tightened, not loosened.
In introducing his legislation, English relies on the same tired, well-refuted rhetoric: “Failing to update our outdated trade laws allows foreign countries to continue robbing Americans of their jobs,” he says. Pu-lease.
Granted, in Mr. English’s district of Erie, Pa., the unemployment rate of 5.1 percent is slightly higher than the downward-trending national rate of 4.6 percent (just announced today). Yet Erie's rate is still well below the national average in each of the past four decades.
But it’s not the jobs of his Erie constituents that English seeks to protect. Rather, it’s the jobs of Washington’s legions of underutilized trade lawyers who are the primary beneficiaries of this proposal.
“My initiative streamlines the process for American companies seeking relief against import surges, illegal imports, and other crippling circumstances stemming form trade,” English says. “Our trade laws are essential to police our domestic market and are used only when others break the rules. Now is the time to fix the law to serve our interests, not those of predatory trading partners.”
Exactly whose interest he means by “our interests” should be clear. There’s been a lot of talk within the trade community recently about the paucity of new trade remedy cases. In fact, there has been only one U.S. antidumping initiation this entire year, and only three over the past 10 months, which is a major dropoff from the one or two per months we’ve seen for the past few years. Combine that trend with the recent “softwood lumber” truce between the United States and Canada, and you have a sudden glut of starving trade lawyers. (And Research-in-Motion thought it was out of the woods when its patent infringement suit settled!)
The reduction in trade remedy cases is attributable to a few laudable facts:
First, the U.S. economy has been growing steadily, if not handsomely, for over four years now. Under those circumstances, it’s difficult to make the case that your industry is materially injured (one of the stubborn requirements of winning antidumping protection).
Second, the U.S. steel industry, which accounts for the preponderance of antidumping protection, is healthier than it has ever been.
Third, as globalization has progressed, supply chains have gone international. The once clear definition of a domestic industry has been blurred by the fact that production of a final product often takes place in multiple countries. Bringing antidumping suits has a greater downside now, as domestic petitioners are more likely to ensnare an entity in its own supply chain or related to them in some other way.
And fourth, as the world economy has expanded, producers have many more sales opportunities around the globe than they used to. Emerging demand in previously flat markets has caused managers to rethink their sales strategies: fewer are pursuing a strategy of competing on price in the United States, while more are looking to be early entrants in developing markets.
So, since the conditions that give rise to successful antidumping petitions are scarce today, the lawyers are trying to create demand for trade remedy measures by lowering the standards. If Congressman English’s bill were to become law, they just might succeed. What will be interesting to track is the rigor with which respondent law firms (those firms that typically represent importer and foreign-producer interests) oppose this legislation. The current environment favors their clients, but the lack of legal action doesn't pay those hefty lawyer salaries.
The award for obvious headline of the day goes to this offering from AP:
"The Iraq example coupled with the North Korea example probably is part of the motivation for some in Iran to get a nuclear weapon," and do so quickly, said Ken Pollack, research director at the Brookings Institution's Saban Center for Middle East Policy.
Iran absorbed the lessons of those other two nations that President Bush linked as a three-way "axis of evil," Pollack said.
"We didn't invade North Korea because they had a nuclear weapon. We did invade Iraq because they didn't have a nuclear weapon but we thought they were trying to get one. If you're Iran, what is the logical lesson?"
In his 2002 State of the Union address, President Bush explicitly linked both North Korea and Iran to Iraq in an "axis of evil."
It would hardly be surprising if Pyongyang and Tehran concluded they would be next on Washington's hit list unless they could effectively deter an attack. Yet neither country could hope to match the conventional military capabilities of a superpower.
The most reliable deterrent — maybe the only reliable deterrent — is to have nuclear weapons.
In other words, U.S. behavior may have inadvertently created a powerful incentive for nuclear weapons proliferation — the last thing Washington wanted to occur.
This morning on the radio, I heard the Washington Post's Richard Morin express alarm at the latest study from the Center on Addiction and Substance Abuse regarding underage drinking. This year's study — like previous studies from CASA — declares underage drinking a monumental problem, and concludes that the alcohol industry is not only to blame, but that the industry's bottom line is dependent on continued consumption by minors.
Morin is an ideas guy. He should know better than to buy into what a baldly neoprohibitionist group like CASA puts in its press release without a bit of skepticism. Unfortunately, he's not alone — this short NY Times piece bites on the study, too.
CASA has an unfortunate history of fudging data in pursuit of an anti-alcohol agenda. The group had to apologize and retract a 2002 study just hours after its release when critics pointed out massive errors in methodology.
The invaluable Statistical Assessment Service at George Mason University (STATS) takes a crack at this year's study and, once again, finds it lacking:
Here are a few numbers that don’t make sense: according to their estimate, over 20 billion drinks are consumed by underage drinkers. STATS was unable to reconstruct this number. According to their own analysis, 47.1 percent of kids age 12-20 are “drinkers”, that is, they consume at least one drink per month. According to the 2000 U.S. Census, there are 35.8 million people in the United States in this age range; of these, just under 17 million drank in the past month. The average number of drinks/month, according to the data given in this article, is 35.2 per person per month– or about 422 per year. This amounts to about 422 times 17 million, or just under 7.2 billion drinks per year, far from the 20 billion reported in their table, and used for their analysis. For these same kids to consume 20 billion drinks, each teen would have to consume over 1,000 drinks per year, or almost three drinks a day!
STATS runs through CASA's other hysterical claims, debunks them, then concludes:
The upshot of all this: the number of drinks consumed by youth under 21 is overestimated, the cost per drink is overestimated, the amount of drink attributed to abuse and dependence is overestimated, and the benefit to the industry of youth drinking and alcohol abuse and dependence is overestimated.
Alcohol industry giant Diageo has started a blog to debunk neoprohibition nonsense. Regarding the CASA study, Diageo also points out that nearly all statistical data indicate a sharp decline in underage drinking over the last 15 years, as well as sharp declines in the social problems one might associate with alcohol abuse — drunk driving fatalities, for example. (While Diageo is an alcohol manufacturer, the data it cites come from the federal government.)
Two other points to consider in all of this:
- This type of data manipulation is alarmingly common among anti-alcohol activists. Just a couple of months ago, the American Medical Association (which has adopted an odd, militant temperance philosophy of late) was caught passing off an Internet poll on spring break and alcohol consumption as scientific, complete with a made-up margin of error. That story was all over the media before any reporter or editor thought to look at its methodology. And it's unlikely that the millions who saw the original story on the Today Show or read about it in USA Today saw the handful of follow-up stories showing the poll to be little more than anti-alcohol propaganda.
- There's no question that underage drinking is common, and much of it is unhealthy (though I don't buy into the notion that each time a glass of alcohol touches a 19-year-old's lips qualifies as an incident of "abuse"). But it's not nearly as widespread as the neoprohibition crowd would have you believe. Nor is putting bans or severe limitations on alcohol marketing the proper way to address it.
Unfortunately, neither CASA and its comrades in temperance nor the alcohol industry will consider what I think is a far more sensible approach: Abolish the federal drinking age and, at the state level, adopt a more realistic minimum age — 18 or 19 for purchase, with no minimum for consumption under parental supervision.
Prohibitions on intoxicants have never worked, and never will. They encourage binging and "underground" consumption.
I wish that I had the knack for making a media splash the way some people can. For instance, when Harvard's Karen Lasser and some fellow health care researchers recently released a goofball telephone survey of health care, the media werere all over it.
Here’s a closer look at the gap between the United States and Canada on various health conditions:
- Obesity: 20.7 percent of U.S. respondents; 15.3 percent of Canadian respondents.
- Sedentary lifestyle: 13.6 percent of U.S. respondents; 6.5 percent of Canadian respondents.
- Diabetes: 6.7 percent of U.S. respondents; 4.7 percent of Canadian respondents.
- High blood pressure: 18.3 percent of U.S. respondents; 13.9 percent of Canadian respondents.
- Arthritis: 17.9 percent of U.S. respondents; 16 percent of Canadian respondents.
- Chronic obstructive pulmonary disease (COPD): 1.9 percent of U.S. respondents; 1 percent of Canadian respondents
Wow, that Canadian health care system is amazing! Look at the big difference in "sedentary lifestyle." That's obviously due to the fact that they have socialized medicine and we don't—or so the reasoning goes:
"Compared with Canadians, U.S. residents are one-third less likely to have a regular medical doctor, one-fourth more likely to have unmet health care needs, and are more than twice as likely to forgo needed medicines," write Lasser and colleagues.
They add that "problems accessing medical care are particularly dire for the U.S. uninsured," and that while both countries had racial gaps in health, those gaps were wider in the U.S.
But why did Lasser et al. conduct their own telephone survey of Americans? The Medical Expenditure Panel Survey, a larger and more reliable study of U.S. health care consumers, would have been a perfectly reasonable source to use. The "gaps" may be a little harder to find, though. The average health care spending of people below the poverty line was slightly above that of people above the poverty line—and far above that of people in Canada.
In deference to supporters of government-run health care, we ought to try a single-payer system at a state level in the United States. Then we could see whether having a single-payer system magically improves everyone's lifestyle, access to doctors, and so forth. Until then, we have this "grass is greener" outlook on Canadian health care in the media, and any attempt at a reality check is fruitless.
Two days ago, I blogged that Americans spend too much for health care as a result of the bizarre health care financing system that has been fostered by government regulation and tax provisions. Michael Tanner subsequently responded that my claim makes little sense in a free society--Americans, who are wealthy, consume more health care because they simply prefer more health care and they have the money to buy it.
Permit me a response to Michael's response. I offer a lengthy counter on my own blog; here is an excerpt of my reply:
I think of the American health care system not as a free-market system, but as a government-designed contraption constructed to vacuum money out of the pockets of consumers and into the pockets of health-care providers. A lot of this contraption is built into state regulations of health insurance and provider licensing. The Federal government adds an important layer by encouraging "employer-provided health insurance" (i.e., vacuuming wages into prepaid health plans).
Our difference is tactical. Tanner wants to put libertarians on the side of saying, "The American health care system is the finest in the world. Don't mess it up with a socialized system like everyone else's."
I think that tactic is vulnerable to charges that people in other countries are healthier, charges which very well may be true. I would rather be in the position of attacking our vacuum contraption than defending it.
The debate continues...
Well, Paul Krugman sure smeared me in his May 29 column (sub. req’d.) where he accused me of "fraud pure and simple" in congressional testimony eight (!) years ago.
Krugman's screed was just another salvo in the current global warming charm offensive, coinciding with Al Gore's screeching movie, demonstrations against Max Mayfield, director of the National Hurricane Center, because he had the audacity to NOT blame last year's Hurricane Katrina on global warming (which would have been "fraud pure and simple"), and multiple smearings of any climate scientist who dares to speak out against the current hysteria.
Krugman was incensed with my July 27, 1998 testimony before the House Committee on Small Business. In it, my purpose was to demonstrate that commonly held assumptions about climate change can be violated in a very few short years.
One of those is that greenhouse gas concentrations, mainly carbon dioxide, would continue on a constant exponential growth curve. NASA scientist James Hansen had a model that did just this, published in 1988, and referred to in his June 23, 1988 Senate testimony as a "Business as Usual" (BAU) scenario.
BAU generally assumes no significant legislation and no major technological changes. It's pretty safe to say that this was what happened in the succeeding ten years.
He had two other scenarios that were different, one that gradually reduced emissions, and one that stopped the growth of atmospheric carbon dioxide in 2000. But those weren't germane to my discussion. Somehow, Krugman labelled my not referring to them as "fraud."
The BAU scenario produced a whopping surface temperature rise of 0.45 degrees Celsius in the short period from 1988 through 1997, the last year for which there was annual data published by the United Nations' Intergovernmental Panel on Climate Change at the time of my testimony. The observed rise was 0.11 degrees.
I cited the reasons for this. In fact, the rate of carbon dioxide increase in the atmosphere was quite constant--rather than itself increasing like compound interest--during the period. Ten years later, Hansen published a paper in which he hypothesized that "apparently the rate of uptake by carbon dioxide sinks, either the ocean, or more likely the forests and soils, has increased." This was not assumed in any of his scenarios. In fact, the general hypothesis has been that, as the planet warms, the ocean takes up carbon dioxide at a slower rate.
Then, contrary to everyone's expectation, the second most-important global warming emission, methane, simply stopped increasing. Some years have shown an actual drop in its atmospheric concentration. To this day, no one knows why.
There's also the nagging possibility that we haven't yet figured out the true "sensitivity" of surface temperature to changes in carbon dioxide. Scientifically, that's a chilling possibility.
On May 30, Roger Pielke, Jr., a highly esteemed researcher at University of Colorado's Center for Science and Technology Policy Research, examined Hansen's scenarios. Of the two "lower" ones, he concluded, "Neither is particularly accurate or realistic. Any conclusion that Hansen's 1988 prediction got things right, necessarily must conclude that it got things right for the wrong reason." (italics in original)
That's precisely the keynote of my testimony eight years ago: in climate science, what you think is obviously true can literally change overnight, like the assumption of continued exponential growth of carbon dioxide, or how the earth responds.