Free Trade Agreements

We are for unilateral free trade.  We favor eliminating all US tariffs.  We are OK with helping other countries by reducing their taxes including tariffs but it isn’t really important to us.  Thus any free trade deal is a second best solution for us.

Iain Murray at NRO brings us an interesting issue of all the additional agreements that have cluttered up trade agreements.  Do read the whole thing for a good discussion of the trade-offs.  He says:

Trade deals are better than no trade deals, generally speaking. But bad trade deals can set dangerous precedents. That was why in the 1990s, the staunch free trader Fred Smith, founder of the Competitive Enterprise Institute (where this author works), opposed the North American Free Trade Agreement’s (NAFTA) inclusion of side agreements that had nothing to do with trade. He worried that those provisions, mainly concerning labor and environmental standards, would set a precedent to elevate those goals above tariff reduction—the supposed point of trade deals.

Was he right? The conclusion of NAFTA’s renegotiation, the U.S.-Mexico-Canada Agreement (USMCA), suggests he was.

USMCA has 34 provisions, 13 annexes, and 13 side letters.  Iain is right that the expansion of such agreements is a problem.  Some times the problem is a bit of neocolonialism and other times it is the reverse.  We are against both but especially the latter because we live here.  It could be solved most easily with our suggestion of eliminating all US tariffs because.  The problem is that free trade is only high political priority for a few of us.  Many people oppose free trade.  Some folks support neocolonialism and others the reverse.

Free trade is a high priority for us just like Fred but we tend to support such agreements.  It is clear to us that we are not going to take our preferred step of eliminating all tariffs.  It is equally clear that agreements will need to be complex to garner sufficient support to be agreed to by the administration and supported by the Senate.  Rejecting such agreements because they are not ideal is eliminating the possibility of any agreement.  It is a binary choice to approve or reject USMCA.  We vote to support approval of USMCA despite its flaws.

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Never Trump Behavior In 2020

We didn’t get the Never Trump folks in 2016 and we are even more perplexed about what they will do in 2020.  We see 2020 as The Donald versus either Corey or Kamala.  The Donald is not the first choice for MWG but we prefer him to any alternative that we see.  We are close to certain that we won’t see HST or JFK from the Democrats.  As we learned ex-post from the Post, JFK would no longer pass the character test.

With a h/t to Instapundit here is part of a letter from one of Rod Dreher’s readers:

I can’t stand [The Donald]. I didn’t vote for him and for the moment don’t plan to in 2020. But where else to turn? What we have learned in the last two weeks is that the left will crush anyone who does not support The Agenda. [Emphasis added]

We don’t get it.  In November 2020 there will be another binary choice.  Didn’t you learn from 2016?  We think it will be The Donald versus Corey or Kamala with the latter as the most likely.  Is there anyone there close to passing a character test?  The writer seems to understand as the bold item indicates but then cannot draw the obvious conclusion that you can dislike, even despise The Donald and still vote for him because the alternative is worse.  The Donald is not a conservative and has poor character but he does some conservative things.  The other folks are the anthesis of conservative and will use their poor character to, as the writer says, enforce The Agenda.  The Never Trump cadre is going to have an interesting 2020.

Update: Here is a scurrilous attack on Brett by Kamala’s organization.  There is lots of nasty stuff on both sides but almost entirely the nasty stuff from what we might call serious folks comes from the left.  Thus, the Never Trump folks have decisions to make or unmake.

Still Never Trump

We are finishing up Jonah Goldberg’s new book.  We recommend it and will give a fuller review later but the book is diminished by him continuing to fight the Never Trump battle.  On p. 315 after he paints The Donald as a nationalist he says:

The traditional American conservative vision of limited governments and free markets has passed it sell-buy [sic] date.  The choice is now progressivism or nationalism. [Emphasis added]

We will limit ourselves to two observations.  First, if you don’t think The Donald is doing anything for limited government then Google “Trump reducing regulations” or some variant of it.  Jonah is absolutely right that the Donald isn’t a conservative but he has been very effective at advancing some conservative ideas.

Second, the choice in 2016 general election was Hillary or The Donald.  Jonah seems to have recognized that many of us are reluctant supporters of The Donald.  The next open election will provide some other choice.  We wish one of them wasn’t progressive but we are not optimistic.

Jonah needs to recognize that conservative can’t always agree and conservatives are a non-trivial part of the GOP but if the GOP only attracts conservatives it will almost always lose national elections.  Jonah supported eight years of Hillary because it would damage the brand and we might do better in 2024.  The evidence might change in the next six years but so far he is way wrong.

Democracy In Primaries

This morning in the after-handball discussions we agreed with Jay Cost about the problems of primaries.  We identified the challenges of voting in Alabama today and then agreed that the final three in the presidential primaries were thoroughly unimpressive.  We didn’t know that Jay Cost (at NRO) had said about the same thing:

In my judgment, the top three finishers in 2016 among the two parties — Hillary Clinton, Donald Trump, and Bernie Sanders — were manifestly unfit characters to serve as commander in chief.

Jay can be an honorary handball player.  He then says it would be nice to have a solution to this problem we have seen in several presidential primaries and many senate primaries:

It is advisable instead to find some wise, virtuous, and public-spirited intermediate body that will channel the interests of the people into a slate of candidates who can represent the true welfare of the nation.

Yes it would be advisable.  He goes on to say:

It is advisable instead to find some wise, virtuous, and public-spirited intermediate body that will channel the interests of the people into a slate of candidates who can represent the true welfare of the nation.

Perhaps Madison and Jefferson are looking for a new gig.  If not, we will offer our services to both parties.  We share Jay’s concerns about democracy but we don’t see asking smaller groups to make the initial decisions will be any better.  In fact one of the presidential problems is the initial primaries in Iowa and New Hampshire.  Our only solution is equally utopian.  We need a serious, diverse press that helps inform folks making those decisions.  We expect to see weak nominees continue at the state and national level because we don’t see a solution.

Understanding Jonah

We almost skipped Jonah Goldberg’s Newsletter because the title was “Don’t Choose The Lesser Of Two Evils.”  A simpler title would be don’t vote.  Voting is almost always a matter of voting for the lesser evil.  In Wisconsin we have had the opportunity (twice!) to vote for Ron Johnson against Russ Feingold and have the special joy of Ron winning both times.  That and Reagan in ’84 sums up the votes of almost 50 years that were not the lesser of two evils.  We suspect that our total of three is higher than average.  For example, if you are a conservative and live in NY and weren’t old enough to vote for James Buckley in 1970, there haven’t been many opportunities since then.

Sidebar: The Donald didn’t make our list.  We have said before that he was a dominant choice over Herself meaning that he was at least as good everywhere as her.  The problem is that they both have hideous character problems and are both anti-trade.  A dominant choice can still be the lesser evil.  End Sidebar.

Jonah’s newsletter confirmed our opinion and helped us to understand our differences.  Here is his argument against the obvious:

Tully Borland, a philosophy professor (!), writes, “Never voting for a lesser evil means never voting.” This is morally poisonous sophistry and casuistry.

Tully is overstating the case but just barely.  Jonah is, well, wrong.  It is not morally poisonous.  It is not sophistry (subtly deceptive).  It is not casuistry (specious [having deceptive allure] argument).  It is exactly the relevant argument.  We don’t know why Jonah thinks de Tocqueville would call something that is true a clear but false idea.  We are willing to accept that Doug Jones might be a better choice than Roy Moore but Jonah needs to tell us why.

Later he tells us we never recovered from declining moral consensus of the 60s and Bill Clinton.   He is exactly right when he says:

That moral consensus, for good and ill, started to break down in the 1960s. In the 1990s, Bill Clinton shattered it among liberal elites, who scrambled to find reasons to celebrate the president’s European sophistication as evidenced by his willingness to diddle the interns.

Yup, although there was consensus it was harder to get caught so we have only heard about all sorts of behavior, like JFK’s, that would have outraged the moral consensus then but wasn’t available on a timely basis.  Jonah concludes:

What we need — again — are universal standards of moral conduct.

We couldn’t agree more.  It isn’t gonna happen because it is difficult and there needs to be exceptions.  In regards to sexual harassment we think zero tolerance, any accusation is disqualifying, is a terrible idea.  Although it might be possible to create a grading rubric for sexual harassment it is quite a challenge.  Somebody at Powerline tried to start one, mostly in jest if we remember.

Folks in Alabama need to decide how to vote in the Senate race.  We don’t do this full-time so we don’t have an opinion on who is the lesser evil.  We will find out what Alabama thinks.  The Senate has passed the GOP tax bill but Congress critters need to agree on the conference bill that can be passed by both houses.  Here we are strongly in favor of the tax bill because it is a great deal less evil than the existing code.  Binary choices are often hard.  It is why, in general, we like governors for President.  Philosophy informs but rarely answers practical problems.

Tax Nonsense

Andrew Stuttaford has a long nonsense post at the NRO Corner.  Fortunately he explains why in the first paragraph so you don’t have to read anymore.  Here is Andrew’s first paragraph.  We have comments in brackets.

True tax reform  [no other improvements are relevant] should aim to satisfy four main ‘fiscal’ principles: It should aim at a tax system that is flatter (with lower nominal rates), broader (as many people as possible should have skin in the game) [only relevant for individuals], simpler and, even allowing—as I would –for some supply side magic, it should be fiscally responsible.  As that final goal is extremely difficult to reconcile with those earlier principles without either truly brutal [nope, but likely to be portrayed as such] claw-backs in entitlements (not something I would favor [something we very much favor]) or (my very clear preference [us too]) some sort of federal VAT/GST/Sales tax, both political impossibilities for now [agree], the best that can be hoped for is that any change in the tax regime should not worsen the country’s (unattractive) long term financial condition by too much.

Then Andrew says the plan does great things by reducing corporate rates and eliminating AMT but he sadly informs us that it is not true tax reform.  If you are wiling to accept less than the full MWG plan,

Sidebar: The full MWG plan starts with the Graetz plan and reduces or eliminates a variety of taxes including corporate taxes, AMT, tariffs, and gas tax while adding VAT and carbon taxes.  We are not holding our breath.  End Sidebar.

as we are, then the question is does it improve the current system?  The answer, as Andrew seems to admit is yes it does improve the country’s long term financial condition by improving the business side.  We too would like more improvements on the individual side but it is unlikely to happen.  At some point there will be a binary choice.  As long as the GOP proposal includes “true” business tax reform we are going to support it.  Andrew could have just said that he was waiting for true tax reform from a true Scotsman and we would have understood it in one sentence.

The Tax Bill 11/12/17

Well, there isn’t a tax bill at this time.  There are two: one in the Senate and the other in the House.  It isn’t a binary choice yet and there will be changes.  Although there could be some improvements it seems unlikely that there will be major changes.  We think that the crucial area for improvement at this time is in business taxes and both the proposals deliver that.  We are in agreement with Laurence Kotlikoff at WSJ:

But the new tax plan, while far from what I and other tax specialists would design, will boost the economy, generate more revenue, maintain fairness, and raise Americans’ living standards. It’s imperfect but worth passing.

Let’s find some other conservative opinions.  Edward Lazear at the WSJ likes the basic frame work but doesn’t like that the full expensing is temporary and has a solution to make it permanent:

One way to offset that would be to use a more targeted approach to reducing the taxes paid by small and midsize businesses.

We care about rates and not full expensing because most businesses are not manufacturing.  We don’t want targeted solutions.  We want lower rates for businesses.  We will count Edward are leaning towards passage.  The Editors at the WSJ have a different ruse, eliminating the Obamacare tax, in mind:

While the penalty raised $3 billion in revenue in 2015, Arkansas Senator Tom Cotton points out that abolishing the mandate would actually be a revenue gusher under the Congressional Budget Office’s scoring rules. Last December CBO projected that repealing the mandate would save $416 billion over 10 years because fewer people would sign up for Medicaid or receive subsidies on the exchanges. Fewer workers might also enroll in employer-sponsored plans, which could result in more taxable compensation.

Being who they are we are pretty sure they will have a hard time supporting tax reform without reductions in individual rates.  We will count them as undecided.  George Will has an entirely different idea.  He is concerned that less people will pay income taxes.  He finds that payroll taxes are different from income taxes.  We are not sure why he thinks that.  He wants to repeal and replace the Internal Revenue Code (IRC) starting with repeal:

This year’s best tax bill, which Representative Bob Goodlatte (R., Va.) has introduced six times since 2006, is four pages long and contains fewer words (411) than the new Republican bill has pages. It could be titled “The ‘What You Wished For, Mitch Daniels’ Act.” It is titled, with almost unprecedented accuracy, the “Tax Code Termination Act.” It would nullify the existing 4 million-word code as of Dec. 31, 2021, and require that by July 4 of that year it must be replaced by a new one, which would necessarily be one designed on purpose.

We are 100% with George but we don’t see why we can’t improve it now.  Kevin Williamson at NRO is taking aim at Catherine Rampell’s analysis of the Republican tax proposal in the Washington Post.  Kevin has been distracted by The Donald but he has great fun in this article although he really ought to pick on an equal.  You should read it all.  He starts off:

The Republican tax plan may be kind of dumb, but if it were three times as dumb as it is, it would only be half as dumb as the Washington Post’s analysis of it.

So Kevin, like us, supports a zero corporate tax rate and seems to support eliminating the death tax.  We would like a different tax reform but we are willing to vote for this one.  Kevin and George don’t seem to be getting enough reform.  It seems likely that they will get the status quo.

Our take is that we think the bill is a big improvement on the status quo on business taxation and that is the crucial area for reform.  We think that because many conservative pundits have a low option of The Donald they will argue for great solutions and that means it is less likely that we will get a good solution.  At some point it will become a binary choice.  We hope that everyone makes the right choice when it does.