Many advocates of limited government are rather unhappy with the GOP’s fiscal record in recent years. Yet even after losing Congress in part because of fiscal profligacy, it seems that Republicans have not learned any lessons. The major candidates for the Republican presidential nomination have conspicuously failed to identify programs they would cut and departments they would eliminate — presumably because they have no interest in reducing the burden of government. But then I found this video, which shows that it is possible to be a Republican who believes in smaller government.

Just about every American needs to buy socks every year, while a relatively tiny number of U.S. workers actually MAKE socks for a living. Yet the Bush administration may decide by this Friday whether to sock it to the many for the temporary benefit of one small and dwindling industry.

Under a provision of the Central American Free Trade Agreement approved by Congress in 2005, the Bush administration is weighing whether to impose special duties on socks imported from Honduras. According to today’s Wall Street Journal, the move would placate a particular lawmaker in Alabama with several sock factories in his district and a few other, mostly southern lawmakers whose votes may be necessary for upcoming trade deals the administration wants.

Has U.S. trade policy come to this? For the sake of a domestic sock industry that, by its own count, employs only 20,000 workers, the U.S. government would impose a temporary 13.5 percent tariff on the 8.3 percent of imported socks that come from the small neighboring democracy of Honduras—a country that entered into a free trade agreement with the United States only two years ago.

By design, the tariff would mean higher sock prices for the 300 million or so Americans who buy and wear socks. And the sock tax would fall disproportionately on lower-income families, who spend a higher share of their income on such staples as food and clothing.

The Bush administration should forget nose counting for future trade agreements if gathering votes means raising trade taxes on low-income Americans. If the administration wants to support free trade, it should resist any calls for higher tariffs.

Sen. John McCain boasts about the breadth of his support: “We’re depending on Republicans, Democrats, independents, Libertarians, vegetarians, Trotskyites,” he said in Michigan.

Alas, the 71-year-old senator is not up on the latest lingo. The Trotskyites prefer to be called neoconservatives now.

This week’s Health section in The Washington Post has one, two, three illuminating articles showing how aggressive medicine can either hurt or help:

1. Often helpful, often unhelpful, sometimes harmful medicine: “Brenner and his colleagues estimate that CT scans may be responsible for perhaps 2 percent of all cancers in the United States. The ECRI Institute estimated the scans may be causing 6,000 extra cancers each year, half of them fatal … While there are scant hard data about how often CT scans are done needlessly, several experts estimated that perhaps one-third could be eliminated.”
2. Outright harmful medicine: “One of the most horrifying medical treatments of the 20th century was carried out not clandestinely, but with the approval of the medical establishment, the media and the public. Known as the transorbital or “ice pick” lobotomy, the crude and destructive brain-scrambling operation performed on thousands of psychiatric patients between the 1930s and 1960s was touted as a cure for mental illness.”
3. Unexpectedly helpful medicine: “Scans of my bones, pelvis and abdomen were all clear — suggesting the prostate cancer hadn’t metastasized. But the stomach scan caught a couple of inches of my right lung in the picture — and it wasn’t pretty. A suspicious nodule was growing in the lung’s lobe, apparently unrelated to my prostate cancer. A PET scan ‘lit up’ the nodule, confirming it was a live growth … My experience puts me in a select group of people lucky to have received an accidental lifesaving diagnosis.”

A story from the Associated Press today suggests that WTO-sanctioned piracy is still a way off. Antiguan Finance Minister Errol Cort arrives in Washington today to discuss the internet gambling dispute with U.S. Trade Representative Susan Schwab, in hope of resolving the case.

Last month I reported that a WTO arbitration panel had agreed with Antigua that the U.S. restrictions on gambling over the internet entitled the Antiguans to retaliation — in this case by suspending its obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) to protect U.S. trademarks and copyrights, as well as suspending market access for some U.S. services firms. Antigua has long maintained that retaliation is not its preferred option, and would rather negotiate with the Americans to allow regulated access to the U.S. internet gambling market.

Antigua has strongly rejected the WTO arbitrators’ decision about the level of damages — a decision that is made especially controversial given that one of the three panelists dissented from the opinion, a rare occurrence in WTO jurisprudence, and by their own admission that they were on “shaky grounds” in determining the level of damages. According to Antigua, by basing their analysis on the “most likely scenario of compliance” by the United States rather than the export opportunities foregone, the arbitrators were showing unfair sympathy to the American case. The Americans were pleased that the $21 million in annual damages was well below the figure sought by Antigua ($3.4 billion), but expressed concern over the form of retaliation authorized. The United States had originally argued that their restrictions were worth only $500,000 in damages.

Notwithstanding the back-and-forth over the amount of sanctions, a couple of problems remain. First, who is to say how much it is worth to, say, download illegally a new CD or movie. Is it equivalent to the market value of buying a legal copy of the material? Or is it worth the cost of the download itself (less than a penny, I imagine). That is important because the WTO would limit Antigua to $21 million fairly strictly, and the U.S., under instruction from Hollywood and the software industry, would be expected to pounce if they saw the limit violated. There is also the question of whether Antigua would be able to export the fruits of its copyright violation to other countries and “earn” the $21 million that way.

While this is not the first time that the WTO has sanctioned violating intellectual property protections by suspending obligations under (that first came in March 2000, when the WTO gave Ecuador permission to suspend TRIPS obligations to the tune of $201 million in their dispute over European banana tariffs), the authorization has never been “actioned.” And, if the U.S. comes to its senses and begins to allow its citizens to gamble online freely, this case may not bring that to fruition either.

Cato’s Center for Educational Freedom has a lot to say in response to an article by Sol Stern in the most recent issue of the City Journal. 

Stern, a Manhattan Institute senior fellow and a formerly strong supporter of school choice, argues that market reform in education has failed to deliver on its promise and that we should refocus our energies on curriculum and pedagogy, or “instructionist” reform.

I take issue with Stern’s inaccurate accounting of the school choice policy landscape here:

Et Tu, City Journal? A Terrible Argument for Dismissing School Choice

Andrew Coulson addresses Stern’s misunderstanding of free markets and school choice policy here:

Stern Shouldn’t Be Taking any Bows…

Neal McCluskey exposes the core of Stern’s argument for “instructionist” reform as a fantasy buoyed by misconceptions here:

A Thought Experiment Gone Terribly Wrong

The nations of the former Soviet Union include some of the world’s most interesting free-market reformers. Estonia is famous for its laissez-faire approach, but Georgia deserves attention as well — and not just because I went to the University of Georgia (a different Georgia, I’ll admit, but let’s not get bogged down in details). A few years ago, it implemented a 12 percent flat tax. But it still had a problem of a very high 20 percent payroll tax rate, so Alvin Rabushka reports that Georgia has lowered the combined 32 percent flat tax/​payroll tax rate to 25 percent this year. But why stop there? According to the Wall Street Journal, Georgia now plans to lower the 25 percent tax rate to 15 percent over the next five years and also abolish the capital gains tax:

Newly re-elected Georgian President Mikheil Saakashvili wants to slash taxes, speed privatization, ease foreign-investment rules and tap international capital markets as part of a radical plan to shake up the economy of the Black Sea country, his prime minister said in an interview. “The state will basically do everything to support business and investments instead of standing in the way of it,” said Prime Minister Lado Gurgenidze… The government last week signed off on a proposal that would cut average income taxes to 15% from 25% over the next five years. Capital-gains taxes, currently at 20%, would be abolished altogether.