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OpenMarket: March 2009

  • AIG Lies; Bonuses for Fannie & Freddie; Fed Explodes Money Supply, Risks Stagflation

    March 19, 2009
    It's not just AIG, being bailed out for $170 billion, that's using taxpayer money to give fat bonuses to its employees. The same thing is happening at Fannie Mae and Freddie Mac, the fraud-ridden "Government-Sponsored Enterprises" that helped spawn the mortgage crisis, and now are being bailed out at a cost of over...
  • Show Your Work!

    March 19, 2009
    Fiona Harvey of the FT is one of the better journalists covering the environmental beat, but I'm afraid that is a bit like saying that someone is one of the better members of Congress. In this blog entry on green jobs she commendably raises some objections to the idea that "green jobs" can be a panacea, but then shows her own biases with an unsupportable assertion:
    That said, the move to a low-carbon economy requires such major changes in the way the whole of the economy - from house building to vehicle manufacturing to recycling our rubbish to redesigning our cities - that it is sure to entail a large number of new jobs, which will almost certainly far outweigh the effects of any job losses.
    Really? The Heritage Foundation's analysis of green employment resulting from the weak CO2...
  • Barack Obama v. Warren Buffett on the Economy

    March 18, 2009
    [youtube:http://www.youtube.com/watch?v=kc21pz5lpzE 285 234]
  • Ron Kirk confirmed as USTR -- vowed trade "enforcement"

    March 18, 2009
    The U.S. has a new U.S. Trade Representative -- former Dallas mayor Ron Kirk.  Kirk was confirmed by the Senate today in a 92-5 vote.  Although Kirk is from the top exporting state in the country and should know the economic value of open trade, in his confirmation hearings he vowed to "enforce" existing trade agreements and to push for more enforceable labor and environmental provisions is pending and future trade deals. With all that talk about enforcement in his and President Obama's trade agenda, sounds like free trade is being viewed more like extending U.S. government regulation to trading partners rather than the exchange of goods and services to countries' mutual benefit.  Watch non-tariff trade barriers gain even more traction if he carries through on the agenda.
  • Tit-for-tat: Tariffs and trucks

    March 18, 2009
    It's no empty threat -- Mexico will be slapping high tariffs on almost one hundred U.S. products beginning tomorrow, according to its economy minister.  That's in retaliation for the U.S. reneging on its NAFTA agreement through defunding a pilot program that lets Mexican trucks bring goods into the U.S. And it's not just small potatoes (although those are included).  The affected products include a wide variety of U.S. goods -- from juices and wine to sunglasses and toilet paper.  Although tariffs on most of the goods will be 10 to 20 percent, a steep duty of 45 percent will be assessed on some fresh products.  The tariffs will apply to $2.4 billion of goods. Mexican officials said they want to pressure the U.S. Congress to reinstate the trucking program that was discontinued in the...
  • Carbon mitigation schemes are inherently protectionist

    March 18, 2009
    Thanks, Fran, for blogging on the carbon tariff threat to the peace and prosperity of the world. We should all remember that carbon tariffs are no mere quirk of this or that administration, political party, or government agency. Protectionism is an inherent feature of carbon suppression policies, for three reasons: (1) Companies and labor unions in carbon-constrained countries will demand carbon tariffs to “level the playing field” vis-a-vis firms in non-carbon constrained countries. Absent carbon tariffs, domestic industry and labor will not support cap-and-trade or carbon taxes. (2) Carbon suppression programs all exhibit the classic collective action problem. However...
  • Postmodern Union-on-Union Fight

    March 18, 2009
    The Service Employees International Union (SEIU) is being denounced by a group of its own employees for doing, well, nothing wrong or illegal, but something that SEIU wants to keep businesses it unionizes from doing: laying off staff and contracting out some operations. Reports The Washington Post:
    The Service Employees International Union, considered the most influential union in the nation, has notified the union that represents about 220 of its national field staff and organizers that 75 of them are being laid off. In return, the workers' union, which goes by the somewhat postmodern name of the Union of Union Representatives, has filed unfair labor practices charges against SEIU with the National Labor Relations Board. The staff union's leaders say that...
  • More on carbon tariffs

    March 18, 2009
    For more on the insanity of carbon tariffs, there's an excellent 2008 article by the National Post's Terence Corcoran appropriately titled "Blowing up the WTO."  Here's what he says:
    This is a legal and practical quagmire. To figure out the appropriate tax level would require a mind-blowingly elaborate carbon-measurement scheme, created on a global scale. It would have to be able to determine how much carbon emissions are embedded in the power drill that is nominally made in China, but is actually assembled from parts made in a dozen other countries. Some of those countries may or may not have carbon control programs in place.
    Corcoran concludes:
    . . . all this is a recipe for global trade wars. It would mean, in effect,...
  • Carbon tariffs quid pro quo?

    March 18, 2009

    Just as the World Bank put out a report on increased trade protectionism in the world, U.S. Energy Secretary Steven Chu came out in favor of using carbon tariffs as a “weapon” against countries that aren’t taking steps to reduce their carbon emissions and as a way to protect U.S. manufacturers.

    He seemed not to notice that the day before China’s top climate change official Li Gao had...

  • Hypocritical Posturing By Obama Over AIG Bonuses

    March 17, 2009
    In response to public outrage, Obama is belatedly criticizing the millions of dollars in bonuses that AIG, which is being bailed by taxpayers at a cost of $170 billion, is paying to its executives. But his criticism is hypocritical and dishonest, both because his administration had known about the bonuses long before they became public, and because the stimulus package he himself signed contains language specifically designed to shield those bonuses. Who put that provision there? Senator Chris Dodd (D-CT), who...

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