New Cato Institute Paper: "Beyond Exports: A Better Case for Free Trade"

Dan Ikenson and I have a new briefing paper out tomorrow -"Beyond Exports: A Better Case for Free Trade."  In it, we argue that it's time for free trade advocates in government and the US business community to ditch their decades-old approach of selling free trade through a singleminded emphasis on exports and to take up a more well-rounded messaging strategy.  Here's the lead-in:

Despite trade’s benefits, American sentiment toward it is lukewarm in the best of times, and always vulnerable to manipulation by politicians and media charlatans looking to blame foreigners for domestic shortcomings. Before the end of this year, the 2012 presidential election campaigns will be in high gear—and trade has been a particularly dirty word in stump speeches and political debates in the past. Indeed, one of the reasons for the energetic trade policy push in 2011 is that the political environment next year is expected to be less hospitable to trade initiatives.

The fact that public opinion about trade is so malleable and arguments for restricting it so resonant at times speaks to a failure of free trade’s proponents to make their compelling message stick. It is sad but true that so many Americans need to be reminded of the benefits of being free to choose how and with whom to conduct commerce. But in an atmosphere where demagogues peddle myths to mislead the public into believing that it is preferable for government to limit their choices and direct their resources to chosen ends, it is crucial that the case for free trade be made more clearly, comprehensively, and consistently than it has been in the past.

Thus, in addition to securing the immediate goal of concluding and passing trade liberalizing agreements in 2011, advocates of trade in Congress, the administration, the business community, think tanks, academia, and among the general public should update their arguments and invest in the process of winning the trade debate once and for all. Some of the most compelling arguments for free trade have been only modestly summoned or absent from the discussion for too long.

Readers of this blog will find a lot of these themes familiar -  for the last two years, I've been regularly complainingblogging about the desperate need for US policymakers to revise their trade sales pitch.  Our new Cato paper crystallizes many of those arguments and backs them up with some good data.  The whole thing will be available here tomorrow morning.

Enjoy.

How Government "Investment" and National "Competitiveness" Quickly Turn Into Protectionism

My round-up of State of the Union commentary had a fairly consistent theme: that the President's push for national "competitiveness" and government "investment" was misguided and dangerous because it often lead to anti-market, anti-growth and anti-trade policies.  In a great Forbes op-ed, Art Carden discusses two big problems with these themes:

First, while a group of White House speechwriters apparently thought that “win the future” would have the same rhetorical resonance as “yes we can,” the Address conveyed an incorrect zero-sum worldview in which what others gain comes at our expense. As economics has shown over and over and over and over again, trade creates wealth. Voluntary exchange is a positive-sum game. If China gets richer, it doesn’t imperil our ability to get richer, too.

Second, I have always been struck by how politicians refer to spending programs that almost inevitably turn into special interest bonanzas as “investments.” President Obama exalted the teaching profession, but let’s not be naïve: teachers’ unions are some of the biggest spenders in politics, almost all of their money goes to Democrats, and they fight educational innovations like vouchers and charter schools at almost every turn.

More fundamentally, governments don’t get the kind of feedback on the success or failure of their “investments” that private firms get. Private firms can tell from their profits and losses whether they are creating value. A firm that earns a profit is using resources to produce something that people value more highly than anything else that could be done with those resources. A firm that earns a loss is using resources to produce something that people value less than at least one other thing that could be done with those resources.

Governments respond to political incentives rather than market incentives, and perhaps most importantly, they can’t go out of business. A government can acquire resources. A government can spend money. There is no way to know whether that spending really qualifies as “investment” or not.

Consider biofuels, high-speed rail, and other “green economy” initiatives. I was excited when the President mentioned getting rid of oil subsidies, but my excitement turned to disappointment when he said he wanted to spend more to subsidize things like biofuels and high-speed rail....

I’m extremely skeptical of the government’s ability to make these kinds of “investments” without turning them into massive giveaways to powerful special interests. As Steven Horwitz wrote recently on the prospect of a Libertarian-Progressive alliance, the tendency for government to serve powerful interests is a feature of politics rather than a bug. When we give people the power to rule others, we shouldn’t be surprised that people use that power to benefit themselves and their friends.

I've addressed the first problem that Carden identifies - how an adversarial approach to international economics is wrong and troublesome - many times, and the post-SOTU articles I listed the other day also make this point clear.  I've also briefly addressed the obvious differences between government "investment" and private investment.  So there's no need - for now at least - to elaborate on those points.  On the other hand, Carden's explanation of the pernicious side effects of government "investment" deserves further discussion.  He does a great job laying out how special interests inevitably distort government investment plans, but I think he glosses over perhaps the bigger problem with state meddling in the private sector: it breeds economic nationalism.

As Carden rightly notes, government "investors" (i.e., elected officials subsidizing commercial enterprises with your and my tax dollars) respond to political, rather than market, incentives and can easily throw more money (again, our tax dollars) at a project regardless of the economic return on that investment.  In short, as long as the political returns - be they votes or campaign contributions - remain high, then the government investor has an incentive to keep on investing.  It's this troubling dynamic that has given us more than three decades of government "investment" boondoggles in corn ethanol and other "green" technologies.  (To see just how long we've sucked at "investing" in environmental technologies, Google "carter synfuels" some time.)

At some point, however, the money does run out, and that's where things can get really scary.  As we've learned during the current state and federal budget crises, government funds aren't truly unlimited (thank goodness).  But, even though the state/federal coffers are dry(er), the political incentives remain equally strong - government investors still have a serious political stake (read: re-election) in seeing their investments be successful.  Without a limitless supply of money to throw at a politician's chosen company/industry, he will almost inevitably seek other means to ensure the political returns on his "investments."  And, unlike private investors, he has at his fingertips the full force of the government to improve his investments' prospects should things go sour.

Of course, when it comes to government "investment," things almost always go sour (see above).

So not only do we get bajillions of tax dollars thrown down the toilet for government projects captured by special interest lobbying, but we also get a healthy dose of government coercion to tilt the playing field in those projects' favor.  Sometimes, this coercion rears its head through top-down usage mandates like the gas/ethanol mix.  More often, it appears in the form of economic nationalism - particularly trade protectionism - because in today's global economy eliminating foreign competition is one of the easiest ways to improve your investment's chances.  (See, e.g., the current tariff on sugar ethanol.)  Of course, when a government official can't do that, she can at least blame the foreigners for the failure of her blessed programs and convince the public that "free trade," not her programs, caused all of their economic ills.

And that brings us back to the troubling protectionist implications of the President's repeated calls for more government "investment" during the SOTU.  Henry Payne over at NRO deftly pointed out that Obama's speech closely paralleled that of former Michigan governor Jennifer Granholm back in 2006:

Former Michigan governor Jennifer Granholm has yet to start teaching her new Cal-Berkeley course on green governing — but she already has a devoted student in the White House.

President Obama’s State of the Union speech Tuesday night was eerily similar to the failed economic vision that Granholm laid out in her State of the State address exactly five years ago: It even included her rhetorical ruse substituting “investments” for “spending.”

“If the states are the laboratories of democracy,” Granholm wrote in the Huffington Post last December, “Washington can take a lesson from what is happening in Michigan.” Sadly for the nation, Obama listened to his teacher.

“We need a moon shot,” said Granholm in the Huffington Post. “This is our Sputnik moment,” echoed the president on Tuesday. Granholm envisioned a transformation of Michigan from “Rust Belt to Green Belt” with massive, European-style public investments in infrastructure and alternative energy. “In five years, you’ll be blown away,” she predicted, in what would become her signature line.

It was, in fact, thousands of state jobs that were blown away, as Granholm’s vision diverted pols’ attention from much-needed reforms to the state’s budget and business climate. Since her speech in 2006, the state’s unemployment rate has exploded from 7.4 percent to 11.4.

Now Obama wants to take the Granholm model national. “The 21st Century Jobs Fund [is] the largest investment in diversifying our economy this state has ever seen,” said Granholm in her 2006 SOS. “It’ll create tens of thousands of new jobs. We’ll invest more than $2 billion in public and private funds to develop new sectors of our economy: Advanced manufacturing. Homeland security and defense. Life sciences. Alternative energy.”

“We’ll invest in biomedical research, information technology, and especially clean-energy technology — an investment that will strengthen our security, protect our planet, and create countless new jobs for our people,” mimicked Obama in this year’s SOTU.

Like Granholmnomics, Obamanomics is not only unsustainable — it diverts important investment dollars from the private sector. Welcome to Michigan, America.

What Payne doesn't point out, however, is that the failure of Granholmnomics' state-capitalist model caused her to become one of the loudest protectionists in the country.  As I noted last year, "Michigan Governor Jennifer Granholm went on CNN this morning to discuss President Obama's new trade initiative and to explain away her administration's dreadful, job-killing policies by - you guessed it - scapegoating free trade (start at about 1:00)":



So if/when President Obama's "investments" in green technology and other industries fail (as they probably will), and when the federal budget (and House Republicans) simply can't tolerate even more money being thrown at these failed investments, where will he turn?  Will he cut his losses and admit failure?  Will he force Americans to buy/use these failed products regardless of their economic (and environmental) value?  Or will he blame the country's "adversaries" (i.e., foreign competition) and attempt to erect trade barriers?

According to the "Granholm model," it'll be the last option, and, really, we shouldn't be surprised if/when that happens.  I mean, it's the natural result of an economic model based on national "competitiveness" and government "investment," now isn't it?

UPDATE: Looks like Michigan's new governor is going in a different - and far better - direction.  Good riddance.

Jury Convicts Debra Dillard Of Murdering Daughter-In-Law:

Debra Y. Dillard (mug shot HCSO)

A jury in Wright County has convicted a woman from Moody of first-degree murder and armed criminal action for killing her daughter-in-law in November of 2009.

On November 13, 2009, a passerby called 9-1-1 to report a fatal car crash on Hwy FF near Missouri 142, but authorities were suspicious immediately because the fatal wounds to Becki Lynne Dillard, 24, suffered weren't from a car crash, but from two bullet wounds to the head.

Dillard's family told investigators that she left to buy makeup at Wal-Mart for her sister's birthday but she never made it to the party.

Investigators say that Debra Yvonne Dillard, 53, Becki's mother-in-law, told detectives that her boyfriend, Billy Joe Eastep, hated Becki and followed her down Highway FF and pulled her over.
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Court documents say that Eastep began yelling at Dillard and as she turned to walk away from the confrontation he allegedly shot her in the back of the head.  Sheriff Mike Shannon says that after Becki fell to the ground, Eastep walked over to where she lay and shot her once more in the head.


Billy Joe Eastep (mug shot HCSO)

According to the probable cause statement, Debra Dillard allegedly sent signed confessions to several people implicating herself in her in Becki's murder.

Becki Dillard worked as a hairdresser at Wal-Mart in West Plains and had  two little boys, Cobey 4, and Kryckett who had just turned 1 at the time of their mother's murder.

Howell County assistant prosecutor Josh Corman says that Justin Dillard testified during the week long trial that he and his mother were home watching a movie at the time of his wife's murder.
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"The defendant confessed, then tried to retract her confession.  In a written statement she said now Becki can't hurt anyone anymore.  She's [Debra Dillard] probably the only one that can tell you why she did it," said Corman.
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Eastep, 42, who is also charged with first-degree murder and armed criminal action for Becki Dillard's murder, is scheduled to stand trial in March.

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Debra Dillard will be sentenced on April 8th, but it will merely be a formality on the armed criminal action charge because the only sentence available on a first-degree murder conviction is life without the possibility of parole.  Her trial was moved from Howell County to Wright County on a change of venue.

SOTU Round-up

There's far too much good commentary on last night's Go America Pep RallyState of the Union Address for me to list it all here, but these are the ones that I liked the best (other than mine, of course):

• Cato's Sallie James briefly explains why the President's "competitiveness" theme is misguided and dangerous.  She even channels the Sane Paul Krugman of Yesteryear ("SPKY"): "When it became clear that President Obama would make 'competitiveness' a theme of his SOTU address, I looked forward to seeing Paul Krugman’s statement pointing out how much nonsense that is. Here he is, after all, in his excellent 1997 book, Pop Internationalism (MIT Press): 'International trade, unlike competition among businesses for a limited market, is not a zero-sum game in which one nation’s gain is another’s loss. It is [a] positive-sum game, which is why the word 'competitiveness' can be dangerously misleading when applied to international trade.' Sure enough, President Obama’s speech last night was peppered with references to 'the competition for jobs,' 'new jobs and industries take root in this country, or somewhere else,' 'the competition for jobs is real,' etc. And of course there was a healthy dose of the usual mercantalist obsession with exports."  I'd only add that this type of "adversary economics" - i.e., discussing the global economy as a war to be won against our trading partners - is nothing new for this President, and I've critiqued it many times on this blog.  No need to do it again tonight, but I'm sure I'll be hitting it again soon.

• Cafe Hayek's Don Boudreaux provides some must-read clarity for those poor, misguided soles out there who thought that Obama's "pro-business" and jibberjabber would be warmly welcomed by those who believe in and support free markets.  My favorite lines: 

"In a free market, businesses profit only by pleasing consumers. But a business that obtains special favors from government can profit without pleasing consumers. And it’s here that trouble starts. Consider Obama’s commitment to make America more 'competitive.' (He used variations of the word 'compete' nine times in his address as part of his argument that American firms and workers are threatened by their foreign counterparts.) 'Competition' sounds good. But businesses don’t like competition; they like protection from competition – along with subsidies, special tax breaks, and other government favors that relieve them from the need to cater energetically to consumer demands. So a pro-business president is prone to curry favor with businesses by shielding them from competition."

"Did you know that in the decade from 2000 through 2009, the total amount of foreign direct investment (FDI) received by China was $686 billion, while the total amount of FDI received by the U.S. was $1.8 trillion – by far the largest inflow of capital from foreigners received by any country on earth? America’s receipt of FDI dollars exceeded China’s by 162 percent. On a per-capita basis, the figure is even greater: The amount of FDI America received per person from 2000 through 2009 was ten times (!) greater than was received by China. So when Obama said in his speech on Tuesday night that 'We need to out-innovate, out-educate, and out-build the rest of the world,' he wrongly implied that America currently doesn’t do so well in the international economy. But it does – which is not to say that there isn’t a lot of room for improvement. The president is correct that tax and regulatory reforms – along with reining in Uncle Sam’s deficit spending – are in order. Especially welcome is his call to lower corporate tax rates. And if calling such reforms 'competitiveness policies' improves their chances of being implemented, I’m all for it. But let’s not be fooled into thinking that America’s current economic troubles are caused by America’s open participation in global trade."

• AEI's Phil Levy succinctly labels it A Disappointing Speech and - gasp! - also channels SPKY: "In advance of the president’s State of the Union speech, I wrote about the need for difficult choices and serious stances on trade and the deficit. I didn’t hear any of that in the address. On trade, the president’s positive agenda was largely limited to endorsing his minor reworking of the three-year-old free trade agreement with Korea. He also mentioned vague plans to rework the Colombia and Panama agreements (after only two years of inaction!). I heard no mention of seeking trade negotiating authority, despite the recent efforts of Senator Rob Portman (R-Ohio) to get it for him. Nor was there any initiative to advance the global trade talks that the president has repeatedly pledged to conclude. Instead, there was an unhelpful jingoistic refrain about international competitiveness and economic threats from abroad (see Paul Krugman for why this is misguided)."

• And speaking of SPKY, since all the cool kids seem to be quoting him, I guess I will too: "The view that nations compete against each other like big corporations has become pervasive among Western elites, many of whom are in the Clinton administration. As a practical matter, however, the doctrine of "competitiveness" is flatly wrong. The world's leading nations are not, to any important degree, in economic competition with each other. Nor can their major economic woes be attributed to "losing" on world markets. This is particularly true in the case of the United States. Yet Clinton's theorists of competitiveness, from Laura D. Andrea Tyson to Robert Reich to Ira Magaziner, make seemingly sophisticated arguments, most of which are supported by careless arithmetic and sloppy research. Competitiveness is a seductive idea, promising easy answers to complex problems. But the result of this obsession is misallocated resources, trade frictions and bad domestic economic policies."  Sadly, that was written in 1994, and SPKY is today little more than a collection of words on the InterTubes.  And even more sadly, our current President, despite all his talk of "winning the future" and dominating the 21st century, is, as deftly pointed out by the AmSpec's Phil Klein sounding a lot like his Democratic predecessor back in 1994.

• Finally, Judy Shelton of the Atlas Economic Research Foundation has an excellent op-ed on the problems with the President's approach to doubling exports and "investing" in the future.  She wisely notes: "The only way to increase real wealth is through productive activity that generates true gains in economic output leading to higher future living standards; if wages are going up while purchasing power is going down due to inflation caused by government deficit spending, the gains are illusory.  If you have faith that America can compete in the global marketplace without resorting to monetary artifice, you will not be quick to embrace a strategy that elevates government industrial policy over private sector decision-making and free-market outcomes."  Exactly.

With (Trade) Friends Like These...

I've frequently lamented the attempts of many advocates of trade liberalization and FTAs to champion free trade policies through an exports-only, essentially mercantilist, approach.  Tonight's State of the Union Address - and protectionists' responses to it - perfectly demonstrate why my angst is well-deserved and why free trade proponents in Congress, the White House and the US business community need to ditch the mercantilism and adopt a new sales pitch.

Beyond the simple fact that there are myriad moral and economic arguments for open markets that are equal to or better than an export-centric approach, one of the biggest problems with a "free trade" message based only on exports is that it's completely self-defeating.  As I said last year when commenting on the President's post-State of the Union statements on trade to a group of GOP congressmen:

Obama states that "the suspicion about trade agreements is that they're all one way." Ok, that's true, but what's feeding that suspicion is not the FTAs themselves, or most Americans' real-world experiences with imports and free trade, but rather political demagoguery and media misreporting on imports, the trade deficit and the state of US manufacturing.... Until these myths are corrected - until the American people understand that imports are good for US businesses and consumers, that US manufacturing output is still the world's largest, and that the US trade balance is not some "free trade scorecard" - any attempt to sell free trade through an exports-only focus will actually enhance Americans' suspicions, rather than alleviate them. Americans simply will look at the trade deficit (which the US has held since the 1960s, so it's not like it's going away anytime soon) and think that we're "losing" at trade, and that our supposedly "reciprocal" FTAs stink. Why? Because the President told them that exports are the only thing that matter, and that the only reason that American companies aren't exporting more is because our trading partners are cheating by illegally denying US companies access to their markets....

Protectionists, of course, are more than happy to exploit this glaring vulnerability and, as I've noted many times here, they've tailored their trade-skeptical (and myth-filled) messages to prey on the public's misconceptions about trade - many of which are fueled by free trade advocates' shoddy trade salesmanship.

Case in point: President Obama's State of the Union sales pitch on the US-Korea FTA:

To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 – because the more we export, the more jobs we create at home. Already, our exports are up. Recently, we signed agreements with India and China that will support more than 250,000 jobs in the United States. And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs. This agreement has unprecedented support from business and labor; Democrats and Republicans, and I ask this Congress to pass it as soon as possible.

The message here is clear: FTA = exports = jobs.  And while exports are certainly a fine and laudable goal, the immediate protectionist response to this argument is exactly as predicted:

• Whether trade creates U.S. jobs depends on net export gains and reducing the trade deficit, which our past policies have not done.
• U.S. export growth under past Free Trade Agreements (FTAs) has been less than half that to countries with which we do not have FTAs.
• The U.S. International Trade Commission's (USITC) official study of the Korea FTA that Obama will emphasize concluded that the deal would increase the U.S. trade deficit.
• Korea FTA's chief U.S. negotiator admitted it would not be a boon for U.S. exports.
• Beware of administration claim that the Korea FTA will "support" 70,000 jobs; the core question is what net effect the Korea FTA will have on U.S. employment.
• The Economic Policy Institute projects American job losses from the Korea FTA at 159,000.
• The December 2010 Obama supplemental Korea trade deal does not alter the increased trade deficit, job loss findings.
• The USITC study identified nine losing U.S. economic sectors that include many high-wage industries, including auto and electronics manufacturing.
• Beware of the administration claim that the Korea FTA could reduce the U.S. trade deficit.
• The auto manufacturing industry may lose a significant number of workers due to the Korea FTA.
• Lack of currency manipulation disciplines in the Korea FTA mean agriculture could also lose out.

Every single one of these arguments is based on the same old protectionist myths about imports, the US trade deficit, and the state of US manufacturing.  And, despite the fact that these myths (and bogus "stats" like those from the union-backed Economic Policy Institute) have been routinely debunked here and elsewhere, they unfortunately sound almost-plausible when cast against the backdrop of the President's mercantilist SOTU statements on exports and the US-Korea FTA (and, of course, other, similar statements from pro-trade members of Congress and the US business community).

Just as troubling is the fact that the anti-trade "response" above actually came out yesterday!  In short, the "pro-trade" message coming from the White House and Congress has become so stale and predictable that anti-traders don't even have to wait until after the message has been delivered before they respond with their tired, mythtastic talking points.  (It must be nice to get paid for repeatedly cutting and pasting the same old arguments over and over again, huh?)

Could you imagine if the President and other trade advocates ever changed their mercantilist tune and spoke about the benefits of both exports and imports?  Or if they defended each American's freedom to engage in voluntary, mutually beneficial transactions with whomever he or she pleases, regardless of the political boundaries involved?  Or if they denounced protectionism as a pernicious, regressive tax on American consumers designed to line the pockets of a few well-connected producers?  Or if they simply explained that the American manufacturing sector has resumed its decades-long rise and remains the world's largest, or that an expanding US trade deficit is closely associated with economic growth, or that 55% of all imports are capitol goods and equipment that American businesses use to remain globally competitive?

For starters, anti-traders' responses couldn't be mailed-in anymore; and they'd actually have to come after the President's remarks, not before them.  Maybe they'd come up with new arguments, but seeing the dreck that they currently peddle, I'm not so sure that they could.  And considering that they've been relying on the same tired playbook for the last twenty-odd years, it would definitely be fun watching them scurry to come up with new dreck for a change.

Crazy thoughts, I know.

Joplin Murder Suspect Who Eluded Capture For Four Years Apprehended In Texas:

Jose Alberto Deleon "Chino" Cazares (mug shot JPD)

A murder suspect who has been on the run from authorities in Joplin for over four years and has been featured twice on America's Most Wanted has been captured in Texas.

Jose Alberto Deleon Cazares, 25, who was wanted in connection to the July 14, 2006, murder of 30 year-old Joshua Olson of Duenweg was taken into custody in Brownsville, Texas, on Monday.

Detectives say that Olson and a friend went searching for Jose Deleon Alberto-Cazares, who goes by the street name "Chino," and his brother Gerardo Cazares Jr., who is known as "Jerry," because Olson believed they stole the rims off of his vehicle on July 14, 2006.

Their search led them to S. Pearl Avenue in Joplin where investigators say an "argument got heated between Olson and the Cazares brothers."  According to authorities, to avoid further conflict, "Josh turned away and walked to his car." Enraged, Jose Cazares followed Olson to his car where he allegedly shot him in the head.

officers responding to a shot's fired call found Olson lying behind a house at 1617 S. Pearl Avenue. He was pronounced dead a short time later at a Joplin hospital.

A man who lived in the neighborhood told investigators that he heard three people yelling at each other in Spanish and then someone yelling in English several times...“Get off my property.” The man then heard a gun shot followed by a softer voice repeating: “Oh, my God. Oh, my God.”

Detective Mike Hobson says that investigators initially hit some stumbling blocks in the beginning of their probe into Olson's murder. The friend who accompanied Olson to the Cazares brothers house didn't want to identify the alleged shooter because "he wanted to take matters into his own hands and avenge his friends death."



Joplin Police Public Information Officer Lt. Brian Lewis



Lt. Brian Lewis says Cazares has numerous aunts and uncles who live in Brownsville, Texas, and authorities always believed that he was traveling back and forth between the border town and Matamoras, Mexico. According to Lewis, "An anonymous tip phoned in to authorities in Cameron County led to deputies finding Cazares hiding in the closet at a relatives home."
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Casares, who is charged with second-degree murder and armed criminal action, is being held in the Cameron County jail pending extradition back to Jasper County.

Monday Quick Hits

Here are some headlines to tide you over until tomorrow's big State of the Union address and its inevitably depressing depiction of "free trade" and "competitiveness" as "exports" and "subsidies," respectively:

• CHINA INFLATION ALERT!  Asia expert Lee Miller sends me tons of juicy news on China's (possibly) skyrocketing inflation.  Here are some highlights:  First, AmCham China's 2010-2011 China's Business Report finds that "Finding enough qualified staff is the No. 1 business challenge, and competition is picking up not only between U.S. and other foreign companies but between U.S. and Chinese companies -- both private and state-owned enterprises (SOEs)."  Second, Diana Choyleva writes a must-read op-ed in the WSJ Asia, concluding: "It's not just the prices of consumer goods and services. Asset price inflation, most famously in real estate, has been accelerating; as has wage inflation. All of this should make the thousands of investors looking to jump onto the China bandwagon skeptical of what they're being told. Regardless of Beijing's claims of prudent economic management, excess money is sloshing around and overheating China's economy, thanks to the huge monetary overhang from China's post-2008 stimulus. Beijing clearly panicked when the global financial crisis hit and stepped on the monetary accelerator. It halted the ascent of the yuan by re-pegging to the dollar in mid-2008 (so that exports could become cheaper), it stopped sterilizing the still-massive foreign exchange inflows (so these inflows directly entered the money supply) and ordered banks to lend historic amounts of credit. The increase in broad money was a massive 39% of GDP in 2009 and 30% in 2010, compared with a previous peak of 27% in 2003. The Chinese express alarm over Western quantitative easing efforts these days, but China's own monetary loosening beats all that."  Third, AFP reports that "China's main export region in the south will raise minimum wages by an average 18.6 percent, marking the second hike in less than a year as soaring food costs hit the country's millions of poor."  Finally, the Global Times reports that "The People's Bank of China (PBC) will print 1 trillion yuan ($151 billion) worth of new bank notes this year, but officials refuted claims that the announcement had anything to do with inflation, the Xinhua News Agency reported Wednesday." That last story might be nothing, but after reading the first three, are you willing to bet on it?

• David Harsanyi cites "Red Dawn" in his op-ed on the baselessness of the current Sino-phobic hysteria in the US.  Thus, he gets a shout-out from this Red Dawn-loving blogger.

• Joseph Sternberg provides in the WSJ a rather convincing argument as to why we shouldn't expect China to "re-balance" anytime soon.  Sternberg points out several aspects of China's banking sector that lead to a bias against domestic consumption in favor of export industries (especially state-owned ones).  His conclusion: "China's investment-driven growth has paid off so far but may already be witnessing declining marginal returns. McKinsey estimates that China now needs to invest $4.90 to produce each dollar of GDP growth, up from $3.30 in the early 1990s. Shifting to a new model will require changes at every level, right down to the bank branch. That's hard to do when you're preoccupied asserting economic might you may not have."

• Cato's Mark Calabria provides a really simple solution to White House complaints about China's preventing the appreciation of its currency by purchasing US government debt: stop borrowing money!  He states, "When China receives dollars for the many goods it sells us, instead of recycling those dollars into the purchase of US goods, it uses that money mostly to buy US Treasuries and Agencies (Fannie/Freddie securities).  These large Treasury/Agency purchases (foreign holdings of GSE debt are over $1 trillion) have the effect of increasing the demand for dollars and depressing that for yuan, resulting in an appreciation of the dollar relative to the yuan. This connection exposes the hypocrisy of President Obama’s complaints about China currency manipulation – without massive US budget deficits, China would not be able to manipulate its currency to the extent it does. If the US wants to end that manipulation, it can do so by simply reducing the outstanding supply of Treasuries and Agency debt."  Exactly.

• A new study on outsourcing from Duke University's business school shows that "American companies opting to hire offshore labor are doing so because of a domestic shortage of skilled workers, not a desire to save on labor costs."  Do you hear that hissing sound?  Yep, it's the deflation of yet another protectionist narrative.  (Oh snap.)

• AEI's Mark Perry provides our annual reminder that those preaching the "death of American manufacturing" are not just greatly exaggerating but also flat-wrong.  In so doing, Perry provides two charts-of-the-day (below) and smartly concludes: "America still makes a ton of stuff, and we make more of it now than ever before in history, but we’re able to do it with a fraction of the workers that would have been required in the past. We’re still the world’s leading manufacturing economy by far, thanks to the world-class productivity of American manufacturing workers, the most productive in the world. Instead of bashing China, Korea, and Mexico for competing against our manufacturing sector and exaggerating the decline of our manufacturing sector, Americans should take more pride and celebrate our status as the world’s leading manufacturer."  Amen.  I'd only add one thing: is it really good policy to rest the hopes of the US labor force on a sector (manufacturing) that has experienced awesome and steadily improving productivity (i.e., increasing output with a shrinking workforce) over the last few decades?  Hmmm...

That's all for tonight, folks.

Taney County Judge In Stable Condition After Suffering Brain Aneurysm:

Associate Circuit Court Judge James Justus (courtesy MO Sec. of State)

A judge in Taney County who has served the county for nearly 30 years is now in stable condition after suffering a brain aneurysm at home Saturday morning.

Judge James Justus, 59, served as prosecuting attorney and assistant prosecuting attorney before being elected to the bench as an associate circuit court judge in 2003.

Taney County Circuit Clerk Brenda Neal says Justus was first treated at Skaggs Hospital in Branson and then transferred to St. John's in Springfield where he underwent surgery and is now in the progressive care unit. Neal says additional surgery is expected.  "He's talking and shows no sign of a stroke, which we're all thankful for.  He's taking medication that will hopefully prevent a stroke."

Neal says she's spent most of the day on the phone with officials in Jefferson City trying to secure a substitute judge/or judges to assume Justus' dockets.  "I've gotten many calls from Judges asking how they can help out.  I think we'll be okay."

Justus' daughter, Senator Jolie Justus, said via Twitter, "He's hanging in there. Good sign - He told me to get back to Capitol to defend judicial payraises!"

Estate Of Former City of Nixa Employee Who Pled Guilty To Bilking City Out Of Close To A Million Dollars To Be Auctioned:

Larry Covington (CCSO)

The living estate of Larry and Paula Covington will go on the auction block this weekend in Nixa.

Larry Covington who was the streets superintendent in Nixa pleaded guilty in federal court to setting up bogus business along with another former employee, David Griggs, to bilk the city out of close to a million dollars.

Larry Covington was sentenced to nine years in federal prison without parole and ordered to pay $756,000 in restitution to the city.  Griggs was sentenced to two years and eight months in federal prison without parole and was ordered to pay $272,718 in restitution.

Paula Covington (CCSO)

Covington's wife, Paula, pleaded guilty to federal money laundering charges last year in connection to the scheme. She was ordered to serve one year and one day without parole in federal prison.

Is Ian Fletcher a Bad Person or Merely a Bad Economist?

Self-avowed protectionist Ian Fletcher has decided to pick a (rather nerdy, admittedly) fight with GMU economics professor and Cafe Hayek blogger Don Boudreaux about free trade.  After getting dressed down in several of Boudreaux's "open letters," Fletcher has fired back in a new blog entry at the Huffington Post.  This time, however, Fletcher skips the economic or moral arguments and instead opts for the truly high-brow approach of, err, jingoistic name-calling:

Libertarianism, the New Anti-Americanism

Sometimes the bad guys do us all a big favor, by openly stating what they stand for after spending years denying it. I recently received exactly this sort of favor from an economist, one Don Boudreaux, at the renowned libertarian Cato Institute, a hotbed of free-trade thinking. He wrote:

Why should you or I celebrate less an improvement in the welfare of a South Korean than we celebrate a comparable improvement in the welfare of a South Carolinian? (original here) 

That's it. So finally we have it: after years of telling us that libertarian economics -- deregulate this, deregulate that, believe that the free market is always right -- is best for America, they admit that, in the end, they just don't care.

This philosophy has the perverse virtue of perfect logical consistency: if you don't care about what's good for Americans, why not have free trade? I must grant -- and the reader should, too -- that the entire policy of free trade makes perfect sense if one adopts this premise.

The idea of caring equally about the well-being of people all over the world sounds, of course, like a very sweet and humanitarian philosophy. And in a perfect world, maybe it would be. But there are two very big realities that get in the way:

1) We live in a world of ruthless economic rivalry, so if Americans aren't willing to stand up for the economic interests of Americans, we just get rolled by multinational corporations and foreign powers that lack such delicate qualms.

2) Libertarianism, for all its pretensions of universalist humanitarianism, is in fact a notoriously selfish philosophy. Someone once defined a libertarian as "an anarchist with a credit card;" they were onto something.

The South Korea Free Trade Agreement, America's largest free-trade agreement since NAFTA, is back on the front burner. So when the libertarians speak up on this issue, as they will, just remember where their hearts are.

Sigh.  Don's a big boy and certainly doesn't need little ol' me to defend him, but, being a libertarian myself, I have a small dog in this fight and, well, just can't help myself.  For the moment, let's ignore the obvious failings of Fletcher's actual "arguments," such as the fact that--

• Fletcher totally misunderstands (or intentionally misstates?) Boudreaux's post, which, as even Cletus the slack-jawed yokel could grasp from a quick skim, clearly shows that Boudreaux believes that free trade greatly benefits Americans through increased wealth, better returns to capital and thus more investment, higher productivity and real wages, and (perhaps) lower income inequality, and that free trade also benefits workers in poor countries (hence, the selectively-quoted comment about South Koreans and South Carolinians). 

• Even if Fletcher's characterization of Boudreaux's statement were correct (and it's clearly not), that would obviously make Boudreaux and other libertarians ambivalent about America, not "anti-American"; and

• Even a dumb lawyer like me can see that modern global supply chains have made "a world of ruthless economic rivalry" a thing of the distant past, and that trade (i.e., voluntary, mutually beneficial exchanges) has never, ever been a zero sum game.  (This, by the way, is the entirety of Fletcher's "economic argument" in his eight HuffPo paragraphs.)

So, take away these clearly erroneous parts of Fletcher's statement, and you're left with the following brilliant insights:

Libertarianism is the new Anti-Americanism.  Don Boudreaux and other libertarians are "bad guys" who "just don't care" and follow a "notoriously selfish philosophy" of deregulation and free markets.  They're pretty much "anarchists with a credit card," and their hearts are clearly in the wrong place.  So remember that when they "speak up" about the US-Korea FTA.

Wow.  So, other than a brief and conclusory statement about "ruthless" international competition, Fletcher's blog entry is nothing more than a long string of jingoistic insults.  I mean, I knew the Huffington Post didn't exactly have the highest editorial standards in the world, but if this steaming pile of substanceless nonsense is the sort of thing that qualifies as "publication-worthy content" over there, then I imagine virtual poo-flinging can't be far behind.

But, hey, I guess when you're a protectionist and your economic arguments get repeatedly crushed by Boudreaux and others (including AEI's Mark Perry) and you utterly whiff on the libertarian critiques of your protectionism's obvious moral failings, then you go attack libertarians' intentions and their character.  Very classy!  Of course, when faced with the opportunity to impugn Fletcher's intentions/character, Boudreaux actually did the exact opposite and defended Flecther in the comments section of one of his earlier blog posts:

There's no reason to believe that Mr. Fletcher is insincere; no reason to think that he's writing and saying what he writes and says simply because someone is paying him to issue the opinions and 'analyses' that he issues. I'm pretty confident that he sincerely believes that the intellectual and moral cases for free trade are weak, or at least much weaker than people such as Russ, myself, Doug Irwin, Dan Griswold, and the like believe these cases to be.   

(I actually said something similar in the comments section of one of Perry's entries.)  Fletcher, on the other hand, apparently has no such reservations and has little problem essentially saying that Americans should doubt libertarians' intentions and beliefs because we are, in essence, bad people who hate America.

Seriously.

British writer and poet Samuel Johnson once famously said that "patriotism is the last refuge of scoundrels."  Historian James Boswell wrote that Johnson wasn't denouncing "a real and generous love of country, but that pretended patriotism which so many, in all ages and countries, have made a cloak of self-interest."  After reading Fletcher's latest baseless diatribe against Boudreaux and other libertarians, one must wonder whether Fletcher, in one short blog post alleging the "anti-Americanism" of his opponents, has quickly revealed himself as a true scoundrel rather than just a poor, misguided economist.


(More classy libertarian critiques of Fletcher's economics, rather than his intentions or "heart," can be found here and here.  And these were done after Fletcher's ad hominem attack!)

~~UPDATED~~Monett Authorities Searching For Man Who Allegedly Raped Girlfriend's Child:

SUSPECT CAPTURED 01-24-11:

Authorities in Monett are searching for a man accused of raping the child of his girlfriend.

Dewey Gene Stewart, 44, of Monett, was charged with first-degree statutory rape last week and is on the run from cops according to Monett police chief Tim Schweder.  The charges were filed after someone made a hotline call to the Missouri Child Abuse Hotline to report a child under 12 was being treated at Cox Monett hospital.

Stewart is on parole for several drug and traffic offenses according to Schweder.

Anyone with information on Stewart's whereabouts is asked to call Monett police at 417-235-4241; the Barry-Lawrence Crime Stoppers tips line at 354-8477 or 9-1-1.
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UPDATED - 01-24-11:

Stewart was arrested at a mobile home near Monett this morning.  Barry County Sheriff's deputies assisted officers from Monett in the arrest.

Stewart is being held in the Monett jail on $75,000 cash only bond pending transfer to the Barry County jail. 

Is Americans for Tax Reform Secretly Fomenting "Conservative/Libertarian" Opposition to the KORUS FTA? (Probably Not, But...) (UPDATED: No, So Who Is?)

A little-known group called "Americans for Free and Fair Trade" has started a new website and PR campaign dedicated to fomenting congressional opposition to the US-Korea FTA.  The group describes itself as follows:

We are a coalition of hard-working taxpayers, grassroots groups and business organizations that want free and fair trade, not managed, unfair trade masquerading as “free trade.”

Many of us are veterans in the fight against NAFTA and other so-called “free trade” fiascos that have cost America jobs and independence. But whether we call ourselves conservatives, libertarians or just “free-traders,” we are unable to support any expansive trade agreement that violates the U.S. Constitution or compromises our national sovereignty and security.

I decided to do a little Googling about this group and came up with very, very little.  However, the anti-KORUS website contains the usual anti-trade myths about manufacturing job losses, the trade deficit, foreign investment, sovereignty, etc., so I casually assumed it was your typical union/leftist front organization (BO-ring!), and thus wasn't even going to blog on the new group and its oddly-sparse website.

Until, that is, a new piece of anti-KORUS propaganda from AFFT came across my inbox today, providing 23 reasons "why even free traders oppose President Obama's Korean NAFTA Trade Agreement (KORUS)."  Hmmm.  I've downloaded that document and embedded it here so you can take a look for yourself; according to a friend, it's also apparently been circulating around Capitol Hill this week.  (Try not to focus on the glaring fact that "Korean NAFTA Trade Agreement" makes "ATM Machine" or "PIN Number" look like frickin' Shakespeare.  It's difficult, I know.  But try.)




Although most of the arguments in here are the same old protectionist gobbledygook, what's somewhat unique about this brochure is that it's trying to sabotage the trade agreement from allegedly "free market" and "conservative" points of view.  For now at least, I'm not going to tackle much of its substance because I've addressed almost all of these "protectionist myths" in other blog posts.  I will quickly note, however, the silly and obvious fabrication that is the "factual basis" of Reason #1.  The pamphlet asserts therein that, according to this Congressional Research Service Report, "Korean GDP will grow 20 times more than the U.S. GDP as a result of this not-so-free-trade."  Now, leaving aside the fact that no sane fiscal conservative or libertarian with even a rudimentary grasp of economics would judge the "free-ness" of a trade agreement on whether it is projected to produce nearly-identical increases in partner countries' respective GDPs, the pamphlet completely distorts what the CRS Report actually said.  The Report notes (pp. 6-7) that varying projections of the FTAs economic effects show an increase in US GDP by between 0.1% ($11 billion) and 0.14% ($25 billion), while Korea's GDP would increase by between .42% and 2.27%.  While this might sound like a big difference, in reality, it's insignificant because the US economy ($14.1 trillion in annual GDP) is about 17 times bigger than the Korean economy ($832 billion):



With this proper perspective, the CRS report actually shows that the KORUS is projected to increase Korea's GDP by an aggregate amount far less ($3 billion to $19 billion) than the United States' GDP increase ($10 billion to $25 billion).  But again, who cares?  Both countries are forecast to experience billions of dollars in GDP growth because of the KORUS FTA!  And this is a reason to oppose the agreement?  Really?  What a joke.

The pamphlet has similar distortions of the CRS Reprt in reasons #10, 17, 19 and 20, and shows its true lack of economic bona fides by citing the Economic Policy Institute's long-debunked data on imports and jobs.  So it's clearly not a piece of serious scholarship and is unquestionably more than a little misleading.

Given these stark and embarrassing realities, it's no wonder that this anti-KORUS campaign's front organization (Americans for Free and Fair Trade) refuses to divulge its true identity and membership.  What is surprising, however, is that when you search the address provided on the pamphlet above (722 12th St NW Suite 400 Washington, DC), you get the home office of the small government, pro-trade Americans for Tax Reform. 

What the... .?

So could ATR - a renowned champion of lower taxes, limited government and free trade - actually be stoking grassroots opposition to the KORUS using misleading arguments couched in conservative/libertarian rhetoric?  Count me as skeptical.  In fact, ATR recently blogged on the KORUS that:

It is a disgrace that the Obama administration has held this agreement hostage, one that benefits almost all sectors of the economy, to appease just one sector- Detroit automakers and their protectionist unions. Nonetheless, the net gains from this agreement far outweigh the negatives and Congress should move quickly to ratify. Now if only we could get Colombia and Panama done…

That's almost identical to something I penned right after the big KORUS deal went through in December, so that leaves us with one of three conclusions: (1) ATR has had a huge change of heart; and/or (2) the group is running some sort of secret backdoor KORUS opposition movement; or (3) some unethical, anonymous anti-trade outfit has fraudulently used ATR's home address on its deceptive "conservative" anti-KORUS propaganda.  Given the blog post above, I'm opting for option #3, and I've emailed ATR's Director of Communications John Kartch for his confirmation.  When (if?) he chimes in, I'll be sure to update this post accordingly (and then we can start asking whether this new anti-KORUS lobbying campaign - recall, these pamphlets are being handed out on the hill - has moved beyond just smarmy/unethical).

But regardless of who is behind the pamphlet, the extent of this organization's anonymity speaks volumes as to the integrity and veracity of their message, wouldn't you say?  Clearly, if Americans for Free and Fair Trade were confident that their message could withstand proper scrutiny - and as noted above, it clearly cannot - then the group wouldn't need to hide behind a fake address and/or a fake organization name.  Yet they do, and that should tell us everything we need to know about their message and their intentions.

UPDATE: ATR's Kartch just got back to me and says quite clearly that "ATR supports the U.S.-Korea free trade agreement.  There's no such entity on the fourth floor of 722 12th Street NW."  So now we know.

Man Who Carried Loaded Weapon Into Store On Black Friday Headed To Prison:

Tyrel Lee Campbell (mug shot SCSO)

A man from Ozark man who was arrested with a loaded weapon and a backpack full of ammuniation in a store crowded with Black Friday shoppers has been sentenced to three years in prison.

Prosecutor Matt Selby says Tyrel Lee Campbell, 29, pleaded guilty to charges of unlawful use of a weapon after the prosecutor dismissed charges of possession of a controlled substance against him.
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Just two months ago authorities arrested Campbell after they were tipped off that he was headed to Wal Mart in Branson with the weapon. Branson West police chief Doug Rader had officers working security at the store who spotted Campbell near the Lawn and Garden section in a crowd of shoppers. 

According to court documents, "We [officers] approached the male the male from behind. I then quickly ordered the male away from Wal-Mart customers. As we enter an aisle the male began reaching for the inside of his coat pocket with his right hand. I then ordered the male not to reach for anything in his pocket and grabbed his right hand. I then asked Campbell where the gun was located and he replied, in my front pocket."

The arresting officers say Campbell told them he felt people were watching him and the customers at Wal-Mart were “were out to get him.”
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When Campbell was arrested he had 550 rounds of ammunition for the .22 handgun.  He also was in possession of "anti-government conspiracy literature."

Jasper County Authorities Charge Man With Impersonating Federal Agent:

Jeremiah J. Hulen (mug shot JPD)

Authorities in Joplin have charged a 20-year-old man with  impersonating a federal agent and want to hear from anyone else who may have had similar dealings with the man.

Joplin police Lt. Michael Hobson said in a news release that Jeremiah J. Hulen was taken into custody following a traffic stop yesterday.   That stop was made after the truck and license plates matched the description of a vehicle that was involved in an incident Saturday afternoon in the parking lot of PetSmart at 520 S. Range Line Road.

On Saturday, a man wearing a hat with the word “Police” on it pulled in behind a woman and accused her of speeding in her vehicle, then allegedly identified himself  as a federal agent.

An off-duty police officer was nearby in the store's parking lot at the time, spotted what was taking place, approached the man and woman, pulled out his badge and told them he was a Joplin police officer.

Hobson says the man then ran to his green Chevrolet truck that had Arizona plates and sped off.

Joplin police are asking anyone who may have been approached in a similar manner recently or witnessed the incident Saturday call Detective Ron Buchanan at 417-623-3131, ext. 239.

Wednesday Quick Hits

Lots of interesting reading over the last few days, so let's spare the pleasantries:

• If you want to know how China's efforts to control the nominal RMB-USD exchange rate lead to serious inflation (and thus an increase in the real exchange rate) read this.  (And then ask yourself this: "Hmm, is this really indicative of a sound economy that will inevitably overtake the United States in the very near future?")  AEI's John Makin has more good data on China's inflation problem here, although I think his solution is a tad simplistic.

• In a great NYT op-ed Harvard's Mark Wu provides three indisputable reasons why China's currency policies aren't the problem for the United States that many, like Sen. Chuck Schumer, breathlessly claim.  My favorite part: "I recently did an analysis of the top American exports to our 20 leading foreign markets, and found little evidence that an undervalued Chinese currency hurts American exports to third countries. This is mostly because there is little head-to-head competition between America and China. In less than 15 percent of top export products — for example, network routers and solar panels — are American and Chinese corporations competing directly against one another. By and large, we are going after entirely different product markets; we market things like airplanes and pharmaceuticals while China sells electronics and textiles."  Cato's Dan Griswold also pens a nice summary on the same issue, and NRO's Rich Lowry broadens the view a little.  [UPDATE: Fresh from Worldtradelaw.net's indispensable trade headlines comes a new CNN report on a debate between Fred Bergsten and Jim Chanos on whether the yuan is undervalued or overvalued.]

• Meanwhile, China's selling US Treasurys again.

• HotAir's Jazz Shaw provides an excellent example in the Ecuador-Chevron kerfuffle of why trade agreements' investor-state protections - such as the mandatory resort to third-party dispute settlement - aren't (as many misguided trade critics claim) pernicious and instead encourage foreign investment (and thus economic growth and, of course, jobs).

• At the request of the Chinese government, "China's five largest banks have pledged to lend more to government-subsidized housing projects in 2011."  What could go wrong?  Oh, right, that.

• Green trade disputes are suddenly a hot topic!  First, Sen. McCain tells Brazilians that US ethanol policies are ripe for a WTO challenge.  Then, Reuters wonders if a "solar trade war" is on the horizon because so many governments are subsidizing the heck out of their solar industries.  Finally, former WTO Appellate Body chair James Bacchus proposes that the US and China negotiate a pre-emptive ceasefire on gree trade disputes in order to avoid a serious conflagration.  If only someone had been warning us about all of these problems for, oh I don't know, the past 20 months or so.  If only....

• The Economist provides our super-cool graphic of the day, which shows that the key to cleaner energy consumption is economic development, not top-down government control.  Shocking, I know:

• The Seattle Times' Bruce Ramsey provides an excellent Korean history lesson which shows that Korean opposition to KORUS and other FTAs is pretty silly.

• Doug Holtz-Eakin, James Capretta and Joseph Antos write a must-read op-ed systematically debunking the liberal/Democrat talking point that repeal of ObamaCare will increase the US budget deficit.

• Finally, this is hilarious, and so is this.

Enjoy!

Quantifying the Stagnation of US Trade Policy (and Hoping for Better in 2011)

Last week the Heritage Foundation released its 2011 Index of Economic Freedom - a veritable treasure chest of data for econo-nerds everywhere.  The top-line news emerging from the study is that the United States - in 9th place overall and thus earning the less-than-stellar label of "mostly-free" - continued to lose ground on economic freedom, while much of the rest of the world gained.  Hong Kong once again lead the pack, while Canada expanded its lead over the United States and remained North America's reigning economic champ (something your humble correspondent kinda-sorta predicted last year).

But for my purposes, the really interesting data lie in the Index's review of global "trade freedom" - a score based on a thorough analysis of each country's tariff and non-tariff barriers.  In these data, we see that, while the rest of the world is liberalizing as quickly as possible, the United States continues to stand still (and even retreated a little).  Heritage's Terry Miller and Bryan Riley provide the first part of this story - the "good news" part - in their analysis:

The 2011 rankings of trade freedom around the world, developed by The Heritage Foundation as part of its annual Index of Economic Freedom, show average trade freedom at its highest level to date. Since 1995, the average score out of a possible 100 has grown from 56.7 to 74.8—an impressive 31.9 percent improvement over the 17-year period. The average score improved 0.6 point from the 2010 rankings, a significant achievement given the worldwide reces­sion from which most countries were emerging....

In the 2011 Index, 85 countries improved their scores and 58 coun­tries declined, resulting in a “gainers to losers” ratio of 2.36 to 1. Countries whose scores changed by at least one full point demonstrated a simi­lar trend, with 39 countries improv­ing and 18 regressing....

Miller and Riley go on to demonstrate that more trade freedom means lower poverty, more equality and more wealth, and they conclude by smartly recommending that:

Whenever possible, countries should unilaterally reduce trade barriers that protect politically pow­erful elites at the expense of the gen­eral population. They should also continue to improve on multilateral trade agreements. Free trade will create more freedom, prosperity, and equality for everyone around the world.

Be sure to read the whole thing here; it's well worth your time.  However, the guys at Heritage leave out the other, more depressing, part of the story: while the rest of the world is racing to lower their barriers to free trade in order to reap the benefits from trade that Miller and Riley point out, the United States is stuck in neutral, embarrassingly remaining the 38th most trade-liberalized country in the world - tied with economic powerhouse Namibia and behind such bastions of free trade as Malta and Lithuania.  (Canada, by the way, ranks 8th overall.)

A review of the raw data from 2009-2011 makes this problem even clearer.  The United States' raw trade freedom score dropped 0.4 points between 2009 and 2011, thus making us a little less free today than we were two years ago (and last year).  Meanwhile, almost all of the 37 countries ahead of (or tied with) us in 2011 got freer over the same period:

As you can see from this chart (made by me with Heritage's data), the trade policies of only three countries ahead of (or tied with) the United States regressed between 2009 and 2011.  As already mentioned, the US also regressed, while every one else liberalized (and reaped the benefits therefrom).

Of course, anyone paying attention to US trade policy over the last two years already knew this from the mounds of anecdotal evidence presented on this blog and other (more reputable) outlets.  As I grumbled a few weeks ago:

Obama has placated his anti-trade base (and their congressional muscle) on Buy American, Mexican Trucks, Chinese Chicken Imports, Section 421 (tires), Section 301 (Chinese "green" subsidies), changes to US trade remedies laws,carbon tariffs - the list literally goes on and on.  He shelved his early 2009 support for the Colombia and Panama FTAs (and KORUS until last June) at the first whiff of congressional stink.  He has embraced mercantilism and adopted a "trade policy" in the NEI that is as unoffensive as it is ineffectual. 

Meanwhile, the rest of the world has pursued bilateral and regional free trade agreements at a breakneck pace.  Thus, it's no surprise that the new Heritage data show the United States stagnating on trade while the rest of the world surges ahead.  Indeed, it'd be a shock if the numbers showed anything else.

A lot of pundits and prognosticators are optimistic that this upsetting trend will change course in 2011, and that the Obama administration will finally engage on free trade and help the United States live up to its reputation as the world's free trade leader.  Recent talk from the administration on KORUS, zeroing and Mexican trucks appears to confirm this conventional wisdom, but it's only a start.  A real change of course on US trade policy will require real action to back up the White House's nice words, as well as new trade liberalization policies to catch us up with the rest of the world.

I sure hope that the conventional wisdom on US trade policy in 2011 turns out to be correct because if things don't change soon, we'll all be pining for the good ol' days when the United States sat pretty in 38th place.

Fight Between Neighbors In Nixa Turns Deadly; Suspect Released As Investigation Contiues:

An alleged fight over money between neighbors turned deadly about 8 p.m. last night in the 400 block of South Patricia Avenue in Nixa.

Detective Jason Hartsell says 51 year-old Rex Hicks and his girlfriend called their neighbor R. B. and his wife and began arguing about $200 R. B. owed them for an entertainment center.  Hartsell says Hicks (who lived at 417 Harrison) and his girlfriend then went to 410 South Patricia where the ongoing feud turned deadly when Hicks was shot with a hunting rifle after being told to leave the property.

Hartsell says it's not the first time authorities had been called to break up disturbances between the neighbors.

Hartsell will meet with Christian County prosecutors this afternoon to determine if involuntary manslaughter charges will be filed in this case.

R.B. is being held in the Christian County jail on a 24 hour investigative hold pending the filing of formal charges.
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UPDATE 01-18-11 @ 9:20 P.M.:

According to assistant prosecutor Donovan Dobbs, R. B. was released from custody and the investigation into the shooting continues.  "They're (police) looking into different things, talking to additional people and continuing the investigation. There wasn't enough evidence to charge him right now so he was released this evening."

Elderly Ozark Woman Receives Probation For Shooting Ex-Boyfriend:

Sharon Kern (mug shot CCSO)

An elderly woman from Ozark who shot her ex-boyfriend with a shotgun last September was placed on five years probation after pleading guilty to domestic assault charges.

Rex Butler told investigators that Sharon Kern, 69, came to his home on North 11th and shot him when he refused to reconcile with her. The two had lived together but had split up two months before the shooting, according to court records.  Kern says the shooting was accidental.

Kern, who says the shooting was accidental, was ordered to pay Butler's medical bills (he’s had surgery on his left arm, his colon, and his intestines) related to the shooting and must undergo a substance abuse evaluation.

If  Kern violates her probation she could be sent to prison for ten years.

Branson Man Sentenced To Ten Years For Knowingly Infecting Former Lover With H.I.V.:

Jeffrey Scott Trumbo (mug shot TCSO)

A man from Branson was sentenced to ten years in prison for knowingly infecting a former lover with H.I.V.

Taney County Prosecutor Jeff Merrell says that Jeffrey Scott Trumbo, 42, pleaded guilty to the felony last week.

According to Merrell, the female victim and Trumbo had been in a long-term relationship but had broken up last summer.  The victim told investigators last August that Trumbo then told her he was H. I. V. positive. 

Lab tests later confirmed that the woman had been infected sometime during the relationship and Trumbo was charged with recklessly infecting another with H.I. V. in October.

"Hopefully the Taney County community feels safer knowing that its local law enforcement, including the Taney County Prosecutor’s Office, understands that this is not acceptable behavior, nor do I think the community accepts this kind of behavior," said Merrell.

The prosecutor adds, "This is an unusual crime that has tragic consequences for its victim and this community. Although it is rare that we see this sort of crime, let there be no mistake that we all take it very seriously.”

Williamson Pleads Guilty To Conspiracy To Commit Murder:



Jimmie Williamson (mug shot CCSO)


A man from Nixa admitted in court today (01-14-11) that he attempted to hire a hit-man to kill his wife and stepson in December of 2009.

Jimmie Michael Williamson Jr., 37, pleaded guilty to conspiracy to commit murder and was sentenced to seven years in prison.  Williamson also pleaded guilty to an unrelated domestic assault for an incident that happened in November of 2009.  He received a seven years on that charge as well.

According to the probable cause statement in the murder for hire case, a "cooperating citizen" contacted police and told them of Williamson's plan. The informant told authorities that if they did not intervene, "Jimmie had several shady contacts that might be willing to take him up on his offer."

Cops then had their informant set up a meeting with Williamson where he offered an undercover officer, who was wearing a wire, $15,000 to have his family killed.

Court documents say that Williamson then drew the cop a diagram of his house at 940 Riverdale Road.

When the officer asked Williamson if he still wanted to go through with the deal he said, "I don't see any other way. She's going to take me for everything. I don't have anything left. Either go all out to jail for ever, forever, forever, or just give her all my money."

What Williamson was referring to was that he had been in a motorcycle accident in which he lost a leg and received a substantial insurance settlement.
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Donna Williamson filed for an order of protection (ex parte) onNovember 30, 2009, after an alleged domestic assault at the couples home. She then filed for divorce on December 9th.
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When Williamson was arrested on December 28th, 2009, he was out of jail on a half million dollars bond for the November 30th domestic assault. In that case he was also facing firearm and explosive charges as well as a drug paraphernalia charges. Cops say they found a meth pipe on Williamson when they searched him.
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Williamson was sentenced on December 21, 2010, to twelve years in federal prison after pleading guilty to transporting firearms, shipping explosive material and possession (receiving) of an unregistered firearm.
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Judge Mark Orr ruled the seven-year sentences in Christian County will run concurrently (at the same time.)  

In August of last year, Williamson alerted authorities to a plan to kill a Christian County Sheriff's deputy while he was being held in the county jail.