You are browsing the archive for 2014 July 16.

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U.S. Abides Global Trade Rules…Just Ignore the Steel Protectionism, Antidumping Abuse, WTO Violations, Etc.

July 16, 2014 in Economics

By Daniel J. Ikenson

Daniel J. Ikenson

Politicians and protectionists have been served by the enduring myth that the United States is the most open market in the world and its government earnestly adheres to the rules of trade, while others, intent on exploiting U.S. naivety, cheat and pursue state-sponsored mercantilism. Ohio Senator Sherrod Brown is both a politician and a protectionist, so he was probably twice as tickled by Friday’s U.S. Department of Commerce determination that South Korean exporters are dumping “Oil Country Tubular Goods” (OCTG) — a class of steel products used primarily in oil and gas well projects — in the U.S. market. He intoned:

Today’s ruling is an important step toward ensuring a level playing field for our workers and businesses. Ohio’s steel tube manufacturers are among the strongest in the world. But their ability to compete is undermined when countries violate trade law by subsidizing their producers or when exporters dump their products in the U.S. market. By levying trade tariffs against countries like South Korea, we can protect local jobs and strengthen our economy, creating new jobs along the way.

Let’s begin with the hypocrisy, which won’t even include discussion of the numerous subsidies bestowed upon Ohio producers or whether Sen. Brown worries that dumping by Ohio exporters may have “undermined” workers and businesses in a variety of foreign countries, who subsequently did less business with other U.S. companies.

Let’s set aside the fact that the far greater number of U.S. jobs in oil and gas well projects that would be created by the revolution in fracking and horizontal drilling is now threatened by the imminent increase in the price of steel those projects require.

Let’s not even discuss how it is impossible to “strengthen our economy” by choosing political over economic means and forcing the economy’s real value creators to pay more than their international competition does for raw materials and intermediate goods.

The U.S. government is not some upstanding citizen fighting for trade justice and the proverbial level playing field, while everyone else cheats.”

And let’s not ask the senator to wonder whether longstanding U.S. antidumping and countervailing duty restrictions on hot-rolled steel — the main ingredient in OCTG — might give foreign OCTG producers, with abundant access to low-priced hot-rolled, a leg up over its U.S. competitors in Ohio.

No, let’s just set all of those points aside and focus on a different grade of hypocrisy.

Though, under global …read more

Source: OP-EDS

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A Titan Falls

July 16, 2014 in Economics

By Doug Bandow

Doug Bandow

For most people politics looks like a game about who is up or down. Sometimes established favorites win big. Other times long-shots burst forth and upset the established order. The horse race tends to most capture public attention.

The recent Republican primary defeat of House Majority Leader Eric Cantor was one of the bigger shocks to American politics in some time. Two decades ago Democratic House Speaker Tom Foley was ousted in the general election. Fourteen years before that House Majority Whip John Brademas of Indiana went down to defeat. However, congressional leaders usually are handily reelected. Once they are known to for bringing home the bacon for local folks, they become as titans bestriding the world.

But Cantor’s loss will have a much larger impact than simply reshuffling who enjoys the biggest offices on Capitol Hill. He gave lip service to fiscal responsibility but was, argued Nick Gillespie of Reason, “atrocious and hypocritical in all the ways that a Republican can be,” constantly voting to grow government.

Citizens everywhere should be frustrated with a government driven by interest groups where business leaders actively subvert the market economy.”

Indeed, Cantor’s constituency was as much corporate America as it was Virginia voters. Business was counting on his support to push through reauthorization of the Export-Import Bank, long known as “Boeing’s Bank” for the extensive benefits lavished on one company; extension of terrorism risk insurance, which transfers financial liability for loss from firms to taxpayers; and preservation of Fannie Mae and Freddie Mac, which nearly wrecked the economy while subsidizing homeowners, builders, and lenders.

Cantor’s loss, said the Washington Post, was “bad news for big business.” The New York Times observed that Cantor was “a powerful ally of business big and small, from giants like Boeing to the many independently owned manufacturers and wholesalers that rely on the federal government for financial support.” He was also “one of Wall Street’s most reliable benefactors in Congress.” His opponent, an economics professor, targeted Cantor’s crony politics.

In practice Cantor’s loss changes little. His replacement as House Majority Leader, California’s Keven McCarthy, appears no less political than Cantor. McCarthy also has relied on Wall Street for fundraising. However, while previously voting to reauthorize the bank, he recently said he would prefer to let the institution’s charter expire. He once owned a sandwich shop, and therefore understands the problems of small business.

Suffering near political death was Sen. Thad Cochran (R-Miss.), who trailed …read more

Source: OP-EDS

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China Courts South Korea: Opportunities and Risks for the United States

July 16, 2014 in Economics

By Ted Galen Carpenter

Ted Galen Carpenter

Chinese President Xi Jinping’s recent state visit to South Korea raised more than a few eyebrows in both East Asia and the United States. Most notably, the way the visit was handled constituted a monumental snub to Beijing’s long-time North Korean ally. Xi did not even bother to stop in Pyongyang either before or after his trip to Seoul. The Chinese are skillful diplomats, and one can be confident that the decision was no mere oversight. Indeed, it was likely a deliberate, blunt message to North Korea.

If China is de-emphasizing its ties to Pyongyang and seeking stronger ties to Seoul, that change creates both opportunities and potential problems for the United States. It is imperative that Washington explore and carefully gauge the nature and extent of China’s policy shift on the Korean Peninsula.  A stodgy, obtuse U.S. response could waste an unprecedented chance to reduce or even end the North Korean threat to regional peace and stability.

It is imperative that Washington explore and carefully gauge the nature and extent of China’s policy shift on the Korean Peninsula.”

The bilateral relationship between Beijing and Pyongyang has been under considerable stress for several years. The main source of irritation has been North Korea’s repeated defiance of China’s warnings not to conduct nuclear tests or missile tests. Both Kim Jong-un and his father and predecessor as North Korea’s supreme leader, Kim Jong-il, ostentatiously ignored Beijing’s admonitions that such conduct was provocative and disruptive. In early April 2013, Xi stated bluntly that no country “should be allowed to throw a region and even the whole world into chaos for selfish gain.” Foreign Minister Wang Yi added that his government would “not allow troublemaking on China’s doorstep.” Although neither leader explicitly named North Korea, there was little doubt that Kim’s regime was the target. Xi’s courtship of Seoul, and what that move symbolizes, sends a new warning to Pyongyang that there is a substantial price to pay for such defiance. 

But tensions involving nuclear and missiles tests are not the only source of China’s annoyance. Long gone is the once-common view in Beijing that China and North Korea “are as close as lips and teeth.” Especially to younger Chinese officials and other members of the country’s elite, the alliance with North Korea seems more an embarrassment than an asset. Even the financial drain is resented, as China has to provide …read more

Source: OP-EDS

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California Braces for the Worst: El Niño May Be Too Little, Too Late to Save It From Drought

July 16, 2014 in Blogs

By Cliff Weathers, AlterNet

The Golden State issues statewide water restrictions as it prepares for the worst shortage in its history.

California has imposed statewide water-use regulations for the first time as its three-year drought worsens. Yesterday, state regulators approved stringent new measures limiting outdoor water, which include $500 fines for using an outdoor hose without a shut-off nozzle.

Meanwhile, hopes that the drought would break by autumn have been tempered. The National Weather Service's Climate Prediction Center downplayed the help that El Niño may bring to the drought-plagued West in its monthly report of Pacific Ocean weather patterns. While the Center is still projecting that sea surface temperatures will be warmer than usual—a phenomenon known as El Niño—it is now saying that the effect will be only “weak to moderate.”

The forecast strength of the El Niño was downgraded because Pacific Ocean temperatures near the International Date Line have not continued to rise since earlier this year when they were well above average. While strong El Niño weat​h​er patterns usually create more rain for California, weaker El Niños typically don't bring more rains to the region.

The Center said that there is a 70% chance El Niño will develop by the end of the summer, and an 80% chance that one will develop by the early winter.

Australia's Bureau of Meteorology concurred with U.S. climate forecasts in a press release yesterday. It further suggests that El Niño has been effictively counteracted by the arrival of cooler water.

All of California is under drought conditions and will likely remain that way through autumn. Reservoirs are precariously low in many places. The nation’s largest reservoir, Lake Mead in Nevada, is now at an all-time low.  

It is the first time in 15 years that the entire state suffers from a water shortage. The U.S. Drought Monitor, a government-funded weekly map of drought conditions, says that the entire state now suffers from conditions ranging from “abnormally dry” to “exceptional drought.” Heavy-population centers all suffer from “extreme drought” or “exceptional drought.”

El Niño refers to a recurring weather pattern that develops …read more


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Without Obama Being Charged with Impeachment, Who Are We As Americans?

July 16, 2014 in Economics

By Nat Hentoff

Nat Hentoff

I was astonished and angered to read last week that the American Civil Liberties Union gathered “a coalition of 45 civil rights, human rights, privacy rights and faith-based organizations (and) sent a letter to President Obama asking for ‘a full public accounting of … practices’ ” related to the NSA’s spying on five leading American Muslims (“Civil Rights Groups Ask Administration to Explain NSA Surveillance of American Muslims,”, July 9).

Sure, it’s a legitimate complaint, so why am I angry? Because instead of requesting this “full public accounting,” the ACLU should be organizing with other presumed guardians of our individual constitutional liberties to demand that impeachment proceedings begin against Obama, the most flagrant presidential violator of the Constitution in our history.

This is for the sake of our very identity as Americans.

On Dec. 4, 2013, George Washington University law professor Jonathan Turley, who has often appeared in this column through the years, testified before the House Judiciary Committee about Obama’s constant desecration of the Constitution’s separation of powers:

“The problem with what the president is doing is that he is not simply posing a danger to the constitutional system. He’s becoming the very danger the Constitution was designed to avoid. That is the concentration of power in any single branch” (“ ‘Impeach Obama’ Campaign Moves Mainstream,” Bob Unruh,, May 10).

Did you reread the Declaration of Independence on July 4? Remember what King George III was doing to so powerfully suppress the colonists that it led to our American Revolution?

During the same congressional hearing last December, Michael Cannon, director of Health Policy Studies for the Cato Institute (where I am a Senior Fellow), said:

“If the people come to believe that the government is no longer constrained by the laws, then they will conclude that neither are they” (Unruh, WND).

And in the second term of his reign, Obama has publicly delighted in his unassailable command:

“Conceding defeat on a top domestic priority, President Barack Obama blamed a Republican ‘year of obstruction’ for the demise of sweeping immigration legislation … and said he would take new steps without Congress to fix as much of the system as he can on his own” (“Obama: I’ll Act on My Own on Immigration,” Erica Werner and Jim Kuhnhenn, the Associated Press, June 30).

In this White House speech, Obama said: “I’m beginning a new effort to fix as much of our immigration system as I can on my own …read more

Source: OP-EDS

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Industrial Policy Is Still a Loser

July 16, 2014 in Economics

By Mises Updates


Mises Daily Tuesday by by Stewart Dompe and Adam C. Smith

Joesph Stiglitz, 2001 Nobel laureate in economics, wants to revitalize industrial policy through greater government intervention to favor certain technologies over others. He says it’s not about picking winners, but about positive externalities. Either way, it all comes down to central planning.

…read more