Yea For NBC

As you know, we support free trade and economic freedom.  We support them because they mean that folks get better things cheaper.  The press rarely does so it gives us joy to report on an NBC story by Martha C. White.

Sidebar: Yes, it bothers us a bit to generalize about the press.  There are members of the press that are serious about economics but mostly they are in support of leftist.  Instapundit always has some good comments on the connection between the press and the left.  End Sidebar.

It is a long quote but it is worth it when Martha says:

“It’s a good example of how the benefits of free trade are extremely diffuse but then the benefits of protectionism are concentrated,” said David Dollar, a senior fellow at the Brookings Institution.  [Emphasis added]

Collectively, Americans are paying more than $1.5 billion extra every year from this tariff alone. Another recent study by a trio of economists from Princeton and Columbia universities and the New York Fed found that the combined impact of all the Trump administration’s trade sanctions costs Americans $1.4 billion each month.

Although the tariff studied by the University of Chicago researchers was only on imported washing machines, the study found that the price increases were significantly more widespread. “Taking the effects on both goods together, the overall tariff elasticity of consumer prices is above 100 percent for the 2018 safeguard tariffs,” they wrote. “The costs of these 2018 tariffs are substantial.”

 

 

The Donald And The Jones Act

Kevin D. Williamson is at his acerbic best in encouraging The Donald to permit waivers from The Jones Act for natural gas distribution.  Kevin asks a great question and gives us the answer in no uncertain terms:

So why are people in New England importing natural gas from Russia?

Welcome to the batty world of trade protectionism.

The United States has on the books and enforces an antediluvian piece of legislation known as the Jones Act, signed into law by that great malefactor of his day, Woodrow Wilson. The Jones Act forbids the transportation of goods, commodities, or people between U.S. seaports unless the vessels used are manufactured, registered, flagged, and owned in the United States — and owned and crewed by U.S. citizens or permanent residents. It’s the reason why a cruise ship picking up passengers in Fort Lauderdale can’t disembark them in Key West — and also the reason why we can’t get natural gas from the Gulf Coast to users in the Northeast and in Puerto Rico.

We might have played the Puerto Rico card more blatantly.  We are not sure if folks care about the WASPs up in the northeast.  We have a question: Can The Donald do that, give a waiver to The Jones Act to help out the US?  We don’t know the answer but we support The Donald giving a waiver.  We also support legislation to eliminate The Jones Act permanently.  Then cruise ships can stop wherever they please and we won’t help out Russia by hurting Texas and New England.

 

 

Here’s Amy

We usually think that some of differences between the left and us are negotiable.  We suppose that the number of opportunities are fewer during the primaries.  Amy Klobuchar, the Democrat senator from MN, is Amy for America on Facebook.  Below is the page you get with the Facebook link.  The list of nine issues to check if they are very urgent didn’t come up so we reproduced them below.  Questions two through six are copied below that.  We left out the donation question.  Since typing is not a big skill for us there might be some errors but we think we have them right.:

  1. Access to affordable, quality health care.
  2. Lowering the cost of prescription drugs
  3. Making colleges more affordable and expanding access to skills training to prepare our workforce for the jobs of tomorrow
  4. Comprehensive immigration reform and passing the DREAM Act
  5. Protecting our privacy and data online
  6. Addressing the disruptive nature of new technologies
  7. Election security and voting rights
  8. Fighting climate change and rejoining the International Climate Agreement
  9. Rebuilding our infrastructure with American-made iron and steel.

The only one we see as urgent for the federal government is number seven.  We are concerned that our idea of number seven and Amy’s might be very different.  Democrats (we once asked the governor of Wisconsin directly) never support the need for voter ID.

Numbers five and nine really have two parts.  We could support comprehensive immigration reform but we need to enforce it.  We would support rebuilding our infrastructure but our support is dependent upon a lack of crony capitalism rather than an increase in protectionism.  If we reduced protectionism, the Jones Act and other government regulations that make improving our infrastructure so expensive then we are ready to support the expenditures.

Below there are five more questions.  We’ve discussed number three.  We don’t see anything anywhere near urgent in the health care list on number two.

Question number four does have urgency for us.  We are not at all sure of the solution but there is a real issue here.

Question five seems really odd.  Is this an Iowa question?  We certainly don’t want the federal government running broadband.

We are on the other side of question six.  We see government action in climate change as a bigger problem than climate change itself.  We do like the “the” in “the International Climate Agreement.”  It appears there is only one but Amy doesn’t want to name it.

We know that Amy is preparing for the primaries but she is supposed to be in the Democrat moderate lane.  Perhaps she is and that would make it certain that we will vote for The Donald.  Amy and The Donald seem overlap more than MWG and The Donald.  Amy and MWG are pretty close to mutually exclusive.

Which of the following issues do you consider very urgent? (Check all that apply.)

2. How important is it to you that our leaders work to reduce out-of-pocket health care costs, protect patients with pre-existing conditions and guarantee access to affordable care for every American?

3. How strongly do you believe that the next President should pass comprehensive immigration reform, including the DREAM Act?

4. For too long the big tech companies have been telling us ‘Don’t worry! We’ve got your back!’ while our identities are being stolen and our data is mined. How urgent do you think it is that we hold tech companies accountable when they fail to protect consumers’ privacy?

5. How important is it to you for our leaders to work to expand the economic potential of rural America by guaranteeing access to broadband services?

6. How urgent do you believe it is for the next President to tackle climate change by rejoining the International Climate Agreement and leading the United States to bold new solutions?

 

Venezuela Reminder

There is a strange presentation to a column in the WSJ.  The column title is The Americas which is written by of one of our favorite columnists, Mary Anastasia O’Grady, it has her picture on the link, and at the end of the column it has her email address but her name is not displayed.  Perhaps it is caused by something in our technology.  The column is Mary Anastasia at her best.  You should, as is often said, read it all.  She weaves together the religious and political traditions of Venezuela that have led us to the current sorry state of affairs.  Mary Anastasia tells us:

Climbing out of this hole will take more than removing dictator Nicolás Maduro. The country is devastated, but Venezuelans haven’t abandoned the collectivist cause. Many popular opposition politicians still call themselves socialists, unwilling to defend the creative class and its members’ right to the fruits of their labor.  [Emphasis added]

It is an amazing deep hole that Venezuela finds itself in.  Devastation, if anything, is not a strong enough word for what has happened to Venezuela.  Here is an estimate that inflation will be eight million percent in 2019.  Of course, many transactions are barter now that the currency is virtually worthless. Mary Anastasia is exactly right.  Venezuela elected Hugo (Obama’s mi amigo) and then Nicolas.  Not all of the elections were fair but those two had substantial support in Venezuela.  External actors like The Donald might be able to help a little but it is up to the locals to fix this.  Mary Anastasia hopes that the Catholic Church can help.  We hope so too.

Trade Among The States

We support free trade.  Everyone should but some folks think it is a problem to buy stuff from other countries.  It is not.  It makes us all richer.  People who oppose free trade, like The Donald, are pretty silly.  We had not, until today, found anyone who thought that trade among the states of the US was a problem.  That person is Dave Skoloda writing in the La Crosse Tribune.  Dave says and we are not making this up:

By one estimate, because we have to ship in almost all our fossil fuels, our energy deficit amounts to some $14.4 billion per year in the cost of importing coal and petroleum products.

That’s money that could benefit the state economy if power could come from in-state sources, according to a report by the Center on Wisconsin Strategy, a UW-Madison-based think tank. Wisconsin has one of the worst energy deficits of all the states, according to the COWS report.

Eeekkk!  People in Wisconsin buy stuff from other states?  Of course it will not help the Wisconsin economy to pay extra for Wisconsin based energy.  An no, we should not care about our energy deficit or our avocado deficit or our cheese surplus.  We might have a frat sand surplus but that has controversy surrounding it. [Check the picture.  The chairperson doesn’t look like a Tiffany.]  Of course, you know what Dave wants to do.  He wants money and regulations from the state for his friends  It is crony capitalism although we are hard pressed to understand why folks use capitalism in the phrase to describe such behavior.  Dave says:

The growing evidence that renewable energy production makes economic and environmental sense begs the question why the Legislature doesn’t wake up and devote some energy to spurring the transition with such things as higher goals for renewables and incentives for electric cars.

If it made economic sense it wouldn’t require an act of the legislature to create it.  Dave wants to charge the citizens of Wisconsin more for less reliable energy and spend their tax dollars to benefit his friends.  We have a much better idea. Let’s sell sand (and milk etc.) to other states and buy their gas (and avocados etc).

Sidebar: Eeekk!  The avocados might come from Mexico rather than New Mexico.  We have no problem with Wisconsin prospering along with Mexico.  You may but surely you have no problem with Wisconsin and North Dakota prospering together.  Do you? We have rewritten many parts of this to make it way less sarcastic.  This is the best we can do on this topic.  End Sidebar.

Both states will be better off.  Dave has a really bad idea but to be fair it is even a worse rationale.  We need to think up a name for an award for ideas like Dave’s.

A Second Thought On Carbon Tax

We were considering what we said about carbon taxes and Marlo’s No True Conservative.  We are also aghast that we misread his name.  We offer our sincerest apologies for the error.

Our second thought is about markets.  Both Marlo and MWG are friends of markets.  We think that the current price of carbon products plus a modest carbon tax is a better market price.  That is, the additional cost of using carbon that is not reflected in the market price is at least half of a modest carbon tax.  Since we are eliminating the gas tax we need to pay for roads out of that amount too.

It is a subject of controversy and there is a need for research but we think a modest carbon tax makes for a better market price.  So would the elimination of subsidies for “alternative” energy sources.

No True Conservative

When James Taranto did Best Of The Web on the WSJ one of his favorite logical fallacies was “no true Scotsman.”  We are not sure if James Freeman has continued the tradition or not.  Mario Lewis, jr. at the Competitive Enterprise Institute must not be a Taranto fan because his conclusion about enacting a carbon tax is that:

It’s irresponsible to provide bipartisan cover for one-sided assessments that hype climate change risk and deny climate policy risk. No true conservative will do it. [Emphasis added]

Since we are on the record as favoring a modest carbon tax under certain conditions and we don’t like being cast out of the conservative tent we read Mario with interest.  We also checked out Another Carbon Tax Defeat at the WSJ that reports on the provincial election in Alberta Canada where the conservatives opposed to the carbon tax instituted by their predecessors won 63 seats compared to 24 for the leftists.  The WSJ lists additional failures of the carbon tax at the ballot box:

Progressives keep touting the carbon tax as inevitable, but then why does it always lose at the ballot box? In 2014 Australia repealed a carbon tax two years after it was imposed. Last year French President Emmanuel Macron was forced to suspend increases in gas and diesel taxes after national protests. Voters in Washington state defeated a carbon tax for the second time in November, and legislators recently pulled a proposal for a statewide carbon tax in Maine.

After digesting it all we don’t favor state or provincial carbon taxes but we do still favor a modest federal carbon tax.  We don’t favor the former because it is disruptive causing business to spend their time avoiding taxes.  We still favor the latter because we see no reason to treat gasoline differently from other forms of carbon.  Carbon does pose some risk for people and a price for emissions other than zero seems reasonable. We don’t want to leave the price to the academics because we want to ensure that a carbon tax is modest.  In addition, we see a great political opportunity because, as the WSJ editorial demonstrates, the progressives are hyper-interested in a carbon tax.

Let’s check out the “true” conservative and see what is bothering him.  Mario’s first concern about a carbon tax is:

The “conservative” perspective, at least insofar as I have had any role in articulating it, is not that climate change is a hoax or poses no risks but that we have more to fear from climate policy than from climate change itself.

We agree.  We think that this is an extremely strong argument for a modest carbon tax in the US.  That would be one way to reduce the risk from carbon policy.

Most of the rest of the article is about the limited risks from climate change.  We can’t say we agree on each and every point but we agree in general.  We both agree so why doesn’t he want to put a tax on carbon other than gas?  Here is where MWG doesn’t agree with Mario:

To put the matter more simply, there is no principled or stable compromise between market-driven American energy dominance and politics-driven deep decarbonization. [Emphasis added]

We admit to being confused by the part in bold.  Well, we just don’t understand it.  We  agree that there are decarbonization zealots but we don’t want to give them a link. We think that market-driven and deep decarbonization are mutually exclusive but not anywhere near collectively exhaustive.  We think both of those groups are relative small even though we belong to the former. We disagree that a modest carbon tax would embolden the left.  It is true that the left wants to increase every tax so the carbon tax would be no different.  It takes an act of Congress to change taxes.

Sidebar: Well, not exactly.  The president already has some authority to increase tariffs and Wisconsin’s own Sean Duffy (yes a Republican) wants to give him more authority to unilaterally tax Americans.  We are not for casting out but we have to say that Sean has lost his conservative mind on this one.  End Sidebar.

Mario thinks that a modest carbon tax would increase the uncertainty for businesses.  We think it would reduce the uncertainty.  We think it is a great opportunity to negotiate.  Surely Mario would like a reduction in the subsidies to “alternative” energy as a part of the package.

We don’t think that Mario has lost his conservative mind on the carbon tax.  He has made different judgments than we have.  We still like ours and still think that a modest federal carbon tax is good policy and good politics.