One of the leading Geek Squad agents in southwest Missouri has been charged in two counties with possession of child pornography.
Following an undercover investigation by the Southwest Missouri Cyber Crime Task Force Jerry Lee Thurman II, 37, of Ozark was charged in Christian County with having more than 20 still images of child pornography, consisting of pre-pubescent children engaged in sexual poses and/or acts as well as posing nude, and one video containing kiddie porn on two computers in his home.
Christian County chief assistant prosecuting attorney Donovan Dobbs says Thurman is also facing charges in Barry County of promoting child pornography with the intent to distribute obscene material with children under the age of 14.
According to court records, On November 7th an undercover officer with the Cyber Crimes Task Force discovered a person believed to be in the Ozark area sharing a large amount of known and suspected child pornography."
Authorities subpoenaed the Internet Service Provider and identified the user as Jerry Thurman.
On December 6th officers obtained a search warrant and on Dec. 7 officers seized two computers from Thurman’s home containing “20 still images and one movie...that depicted most pre-pubescent children engaged in sexual poses and/or acts.”
According to the probable cause statement filed with the charges, "Thurman admitted that he had downloaded images and movies containing child pornography and he moved files from one computer to another consistent with what officers located during the search."
Authorities say further examination of Thurman's computers “will be accomplished as soon as practical.”
Thurman is currently in Christian County Jail on a $25,000 bond. He is facing 5 to 15 years in prison if convicted of the charges.
The great folks at the Investor's Business Daily have just published a new op-ed by me and AEI's Phil Levy. In it, we argue that President Obama has a fantastic opportunity to do what only a few months ago seemed utterly unthinkable: to finish the WTO's Doha Round by the end of 2011.
Don't laugh! If Obama takes our advice and puts forth a serious US proposal, combined with a little leadership and diplomacy, he could actually pull it off.
Granted, that's a rather big "if," but still, the time is right to finally - finally! - conclude the Doha Round. And the United States needs to go big or go home. Period.
Here are a few snippets from the new piece:
The last two years of Doha Round stagnation have proved that U.S. leadership is essential. The president could provide that with an ambitious proposal to reduce agricultural subsidies....
The move would be timely. The G-20 leaders in Seoul, South Korea, and the APEC leaders in Yokohama, Japan, recently called for a Doha "end game" in 2011 and publicly directed their trade negotiators to re-engage in across-the-board negotiations to conclude the round.
The WTO's director general, Pascal Lamy, just offered an intensified work plan, endorsed by almost all 153 WTO members, that would complete the round by December 2011....
But a bold proposal alone would not suffice.
There is no possibility of selling a Doha deal on Capitol Hill without new access to the major emerging markets. India and China's reluctance to offer such access helped crash the talks in 2008.
The U.S. therefore needs a developing country partner with heft and influence....
Intrigued? Good. Now go read the whole thing here. C'mon, you know you want to.
Tragedy unfolded at a slumber party Monday night at a home near Neosho.
Sheriff Ken Copeland says the homeowner at 13911 Sunrise Drive had gotten a new holster for Christmas and had put a .38 caliber handgun he retrieved out of a gun safe in his new Christmas gift and then laid it on top of a piano.
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- Copeland says four girls (all 14 year-old) who attend a Christian school in Joplin were attending the party when two girls found the weapon shortly before 9 p.m. "One of the girls pointed the gun at Meggon G. Reppond' head and pulled the trigger. She told investigators that she didn't think the gun was loaded."
Reppond was airlifted to a Joplin hospital and then transferred by an air ambulance to a Springfield hospital where she died after being taken off life support today.
The shooting remains under investigation by sheriff’s deputies and Newton County juvenile authorities, according to Copeland. "Based on the information so far, I don't believe the prosecutor is going to file charges against the homeowner. It's a tragic situation, everybody is devastated"
Over the last few weeks, I've cautioned that America's absurd ethanol policies and the new US WTO complaint against Chinese "green subsidies" (which arose from the United Steelworkers' Section 301 petition) could spark new trade disputes targeting US exports. Today comes news that China might be getting the ol' retaliation ball rolling with an anti-dumping investigation that fits both of my criteria perfectly (emphasis mine):
China, the world’s biggest grains user, has started an anti-dumping investigation into U.S. shipments of dried distillers’ grains, an animal feed ingredient, adding to tensions in ongoing trade disputes.
The government will probe for unfair trade practices on products imported in the year ended June 30 after receiving complaints from four domestic ethanol producers, the Ministry of Commerce said on its website today. Distillers’ grains, commonly known as DDGS, is a by-product from making corn-based ethanol.
The probe is likely to further strain commercial ties with the U.S. a month before President Hu Jintao is scheduled to visit Washington. China’s surging livestock production has spurred imports of animal feed ingredients including corn, soybeans and DDGS.
“This case against U.S. DDGS probably isn’t an isolated incident and must be observed in the context of the two sides’ trade relations,” Li Qiang, managing director at Shanghai JC, said by phone. “The investigation outcome may not support the charge because prices of imported DDGS have been higher, so it’ll be difficult to establish damages based on price,”
Imports of DDGS may jump nearly fivefold to over 3 million metric tons this year, according to Li. Still, the probe “may not have significant impact beyond the initial concern.”...
The investigation comes after the U.S. last week filed a complaint at the World Trade Organization against China over support for its wind-energy manufacturers. A government fund for wind manufacturers requires recipients to use domestically made parts, violating WTO rules, the U.S. Trade Representative’s office said. China responded by saying its policies were in line with the regulations.
Last month China said it would extend an anti-dumping probe on U.S. sports utility vehicles and large sedans and in October it said it would consider appealing a WTO decision to reject the bulk of its complaints against U.S. duties on imports of steel pipes....
The ministry will begin the investigation today and will likely conclude the probe within a year, the ministry’s statement said. The probe may be extended under exceptional circumstances to June 2012, it said.
Yes, this new investigation could just be a big coincidence. Then again, the last time that the United States announced that it was targeting China in response to a USW petition under an arcane provision of US trade law (Section 421), the Chinese immediately responded with two new anti-dumping (and countervailing duty) investigations of US chicken and automobile exports. And with US ethanol tariffs and subsidies angering producers around the world, it's no surprise at all that China's Ministry of Commerce (MOFCOM) had this petition the Chinese industry sitting around. (Unlike the more transparent US system, AD/CVD petitions are submitted confidentially in China, and MOFCOM has complete discretion re: whether and when to initiate an investigation.) So you can draw your own conclusions as to whether this qualifies as "retaliation," or whether it's just a long-overdue Chinese response to bad US behavior on ethanol. Either way, it's not good for US exporters of DDGS.
And speaking of naughty US ethanol policies, I must admit that I didn't foresee the DDGS case itself and instead was warning about potential countervailing duty investigations of subsidized US ethanol. But the Chinese DDGS anti-dumping case is hardly surprising because, while it wasn't the direct result of US ethanol tariffs and subsidies, it's almost certainly the indirect result of these policies, as they inevitably increase domestic production (and thus lower prices) of the ethanol byproduct DDGS. So while other DDGS cases could be on the way, we still could also see new investigations targeting US exports of the subsidized ethanol itself. We shall see.
One last trade-lawyerly point: I'm not exactly sure what Li Qiang means when he/she says that the case might not result in anti-dumping duties against US exports because DDGS import prices are higher than domestic prices. This could be a legitimate point if we're talking about proving that US DDGS imports materially injured the Chinese injury, but injury cases are very complex, and simple average unit value (AUV) comparisons are a pretty poor indicator of a "material injury" determination (and those import volume increases provide strong support for an injury finding). On the other hand, Li is mistaken if he/she thinks an affirmative dumping finding will be difficult in this case because DDGS import prices are higher than domestic prices. (Recall that the imposition of anti-dumping duties requires affirmative findings of both dumping and injury.) Dumping occurs when import prices are lower than prices in the home (US) market or cost-of-production (aka "Normal Value"), so domestic (Chinese) prices are inapposite. Li probably means the former scenario, but it's impossible to tell. Chalk it up to shoddy reporting, I guess.
The former Speaker of the Missouri House is facing another legal obstacle, according to The Turner Report and online court records.
Rod Jetton, 43, was charged with careless and imprudent driving after being involved in an accident November 8th in Butler County.
He was scheduled to be arraigned on those charges December 20th, however that court appearance was postponed until January 6th at the request of his attorney.
Jetton is scheduled to stand trial on February 3, 2011, trial in New Madrid County on a charge of assaulting a woman during rough sex at the woman's Sikeston home.
The following is an excerpt from the probable cause statement:
[WOMAN] STATED THE NEXT THING SHE REMEMBERED, SHE WAS ON THE FLOOR IN THE LIVING ROOM AND MR. JETTON WAS TRYING TO RESTRAIN BOTH OF HER HANDS WITH WHAT APPEARED TO BE A LEATHER BELT. SHE STATED SHE WAS VERY GROGGY AND UNABLE TO SPEAK BUT WAS ABLE TO PULL HER HANDS FREE FROM THE RESTRAINT. SHE STATED AT THIS POINT, MR. JETTON BEGAN TO STRIKE HER ON THE LEFT SIDE OF HER FACE WITH AN OPEN HAND. SHE STATED AFTER THE FOURTH BLOW TO THE LEFT SIDE OF HER FACE, SHE BEGAN TO SEE STARS AND BLACKED OUT. [WOMAN] STATED SHE WAS UNSURE HOW MANY TIMES MR. JETTON HAD STRUCK HER AFTER SHE HAD BLACKED OUT.
The woman told an investigator that when woke up "Mr. Jetton was behind her having intercourse in the bedroom. The woman said her memory was hazy but that Mr. Jetton stayed the night and when he woke up he gave her a kiss and said, you should have said green balloons." Green balloons was the "safe word" the two had agreed to use when sex needed to stop.
In 2007 Jetton became a household name in southwest Missouri when he attempted to hijack the "village law" into legislation. If it had passed it would have allowed developers to avoid oversight of county governments by incorporating small subdivisions into "villages."
The chatter was that Jetton did that on behalf of late land developer Robert Plaster. Plaster had 400 acres of land near Kimberling City that he wanted turned into the Village of Table Rock. The Stone County Commission had turned Plaster's request down, and a state appeals court upheld their decision in 2006. -
Robert W. Plaster (courtesy News Leader)
On August 28, 2007, the DAY the law went into effect, Plaster's attorney filed paperwork with the Stone County Commission to create the Village of Table Rock. New "villages" would have been exempt from county jurisdiction like planning and zoning ordinances. - The village law was repealed in the next legislative session. -
Jetton was elected speaker of the Missouri House in 2005 and was termed out of office in 2008.
COMPARE: President Obama boasting in May 2010 about his administration's investment of 465 million taxpayer dollars in American electric car manufacturer Tesla Motors:
Thanks to loans through the Department of Energy, which helped provide Tesla Motors with the financial wherewithal to expand, that shuttered plant is soon going to reopen. And once again -- once again, it will be a symbol of promise, an example of what's possible here in America.
CONTRAST: The New York Times today on private investors' less optimistic feelings about investing their own money in Tesla Motors (despite all that government cheese):
Fresh from the holiday, shares of Tesla, the electric car maker, dropped 15 percent on Monday, after the lock-up period expired.
Tesla went public in June, at $17 a share. By late November, the stock had more than doubled to $35.47. Then shares in the company began to slide. With investors free to sell their I.P.O. stock on Monday, Tesla was trading at around $25.55.
Tesla has gotten a lot of buzz. The company’s first car, the Roadster, enticed the likes of the Google co-founder Larry Page and George Clooney to drop $100,000 in 2006 for the “wicked fast” vehicle. Three years later, the company unveiled the Model S, an all-electric car that the company is developing with Toyota. The hope is that the vehicle will be available in 2012 for less than $50,000.
But despite all the hype, Tesla has never been a financial hit. The Silicon Valley start-up, founded in 2003, has never turned a profit — and it is not expected to do so until 2012.
Concerns persist about the potential demand. Carter Driscoll, an analyst at Capstone Investments, recently wrote that he didn’t think the company would grow as quickly as the market anticipated, as consumers would be slow to adopt the new technology. He has a sell on the stock, with a price target of $22, roughly 14 percent below its current level.
“I just think that there were a lot more risks than there were positives at the price it was at,” he said.
But even Mr. Driscoll said he didn’t expect the price to drop so precipitously.
It's amazing that the President's politically-motivated feelings about investing my money in a super-neato future-car differ from those of professional investors risking their own money on an unproven product with flaccid demand. But, hey, I'm sure a few dozen technocrats in Washington know better than the market and its vast number of participants and price signals.
Two men who were charged with sex crimes involving children have been found not guilty by juries in Taney County.
Moses Francisco Perales, 55, of Branson was facing child molestation and sodomy charges after his girlfriend's daughter told her mother that he fondled her multiple times in 2009.
Luther "Luke" David Mitchell, Jr., 40, of Hollister was charged in 2008 of sexual misconduct of a minor after a friend of his daughter said he fondled her when she stayed all night.
Attorney Joseph Allen says juries in both cases said the state did not have enough evidence for a conviction. "This wasn't a typical result for them (prosecutors.) We have a conservative minded jury pool in Taney County. It's refreshing to see that they were willing to listen to the evidence and just not sitting in a jury box willing to convict innocent men."
Things are about to get realllly slow in anticipation of the Big Guy's arrival on Saturday, so here's a cavalcade of reading material to tide you over:
Rep. Michelle Bachmann (R-MN) comes out swinging against the United States' embarrassing, anti-competitive corporate tax rate.
The 111th Congress is over, and so is China currency legislation (until the next election season, natch).
At literally the 11th hour, Congress extended trade benefits for Andean countries and US consumers of goods from those countries. But by failing to extend the Generalized System of Preferences, Congress screwed over other developing countries and US consumers (who saved $577 million in 2009 due to the program). Gee thanks, Sen. Sessions. By the way, be sure to check out that USTR press release: Amb. Kirk talks about import benefits and tariff savings. Nice!
Great essay by GMU's Don Boudreaux on tariffs, freedom and that age-old canard that protectionism propelled the US to glorious heights in the late 1800s.
A truck driver passing through Springfield in the early 80's has been charged with second-degree murder and armed criminal action for the stabbing death of a woman twenty eight years ago.
Today, Greene County Chief Assistant Prosecutor Dan Patterson charged Richard Leroy Walker, 56, (who has been serving time in a Colorado Correctional facility since 2000 for sex crimes and assault) for the July 29, 1982, stabbing death of twenty two year-old Angela Baskin outside a Springfield motel.
Authorities found Baskin lying in the grass near the Villa Inn Motel at 2601 North Glenstone about 1 a.m. after someone in an upstairs apartment called cops to report screaming in the parking lot. When police arrived, they found Walker shimming up an iron support railing and attempting to pull himself up to the second floor.
When the man noticed authorities arriving, he dropped down and began walking across the parking lot.
According to court documents, "He said he wasn't aware of any problems at the motel complex; however, he then changed his story and stated....hurry the problem is around the corner!"
Police arrested Walker, who was a driver for Prime and staying at the motel in room #240, not far from the murder scene after he bolted from two officers after he gave them his ID.
Authorities later determined that the iron railing that Walker was attempting to climb up was directly above where Baskin was found and near Walker's room.
A friend of Walker's told detectives that Walker was wearing a sheath that held a knife and it was attached to his belt before he got kicked out of Wild Bill's Lounge. Walker, was kicked out of the lounge that was next door to the Villa Inn Motel "because there were complaints from other patrons that he was getting too intoxicated."
A security guard at the lounge told investigators that after Walker was kicked out, he remained in the parking lot of the business for over an hour and then walked toward the motel.
When Walker was arrested, he was no longer in possession of the knife that had been attached to his waist.
At the news conference to announce the charges against Walker, Springfield Police Chief Paul Williams said there was not enough evidence to charge Walker with Baskin's death at the time of the crime.
That evidence changed for investigators on December 14th when Springfield Police Detectives Kevin Shipley and Todd King traveled to Arrowhead Correctional Facility in Colorado and Walker allegedly admitted to killing Baskin.
Angela C. Baskin
According to the probable cause statement, Walker first denied involvement in Baskin's death and said he had "very little recollection of what occurred prior to being arrested at the scene."
The next day, on December 15th, Walker told the detectives that after he was kicked out of Wild Bill's Lounge, Baskin approached him in the parking lot and asked him if he could help her find some marijuana. During the initial investigation in 1982, some friends of Baskin as well as patrons of the lounge told investigators that Baskin "made several inquiries for assistance in locating marijuana."
Walker told Shipley and King that he told Baskin he couldn't help her in locating any drugs and walked to the Villa Inn Motel parking lot where his truck was parked. Walker said, "while he was bent over inside the cab of his truck repairing the electrical wires with his pocket knife, he was grabbed on the shoulder from behind, which frightened him and spun around with his knife still in his hand and began stabbing at the unknown person standing behind him."
"Walker claimed that after stabbing the subject an unknown number of times, he then realized the person was the same female that had approached him on the Wild Bill's Lounge lot looking to find some marijuana."
"Walker claimed the female victim then stumbled over to the grassy area at the corner of the building that contained his motel room where she fell to the ground, at which time he observed that she was bleeding heavily from the stomach area.
"Walker claimed that he then realized he had stabbed the female, at which time he began to panic, threw his knife into the field located behind his motel building and was walking away from the building when he was contacted by police."
Williams said the SPD have been in touch with Baskin's only living relative, her father, who is in his eighties and lives in Louisiana. She was originally from Carthage, Texas, and had moved back there after getting a divorce. She had only been back in Springfield two weeks when she was killed. Millsap said her son was killed in a car accident and that her ex-husband has also died.
Williams, Patterson and Lt. David Millsap refused to answer reporters questions on whether or not DNA helped them solve the case or whether or not any kind of weapon was used in the sexual assault that Walker is serving time for in Colorado. They also would not comment on if they have recovered the weapon used to kill Baskin saying "it will come out at the preliminary hearing."
Katherine Sanguinetti, public information officer for the Colorado Department of Corrections says Walker was convicted of a sexual assault and assault for an incident in Adams County on October 3, 1999. "He grabbed a knife and held it to her throat," she said. - Sanguinetti says Walker had no prior felony record before the sexual assault conviction in Colorado. He is serving ten years to life in prison for the assault there.
There has been no preliminary hearing nor arraignment date set for Walker's murder charge here and authorities aren't sure when he will be extradited to Missouri. "We'll put a hold on him," said Chief Williams. - Chief Williams says in the last 40 years, there have been 268 homicides in the city-- 89% of those have been solved, leaving 29 active cold cases.
USTR announced today that it has filed a request for WTO dispute settlement consultations with China over its alleged subsidies to domestic wind power manufacturers. But this is no ordinary WTO dispute for a whole host of reasons. Here's Reuters with the news:
U.S. trade officials said they were concerned Chinese manufacturers of wind turbines and related parts and components could have received several hundred million dollars in questionable government grants in 2008 under China's Special Fund for Wind Power Manufacturing.
They said the grants appeared to violate WTO rules by requiring Chinese manufacturers to use only Chinese-made parts and components.
"Import substitution subsidies are particularly harmful and inherently trade distorting, which is why they are expressly prohibited under WTO rules," U.S. Trade Representative Ron Kirk said in a statement. "These subsidies effectively operate as a barrier to U.S. exports to China....
The steelworkers union filed a petition in September, accusing Beijing of a long list of subsidies and other policies to favor production of clean energy technologies in China at the expense of the United States and other countries.
Kirk said his office would continue to investigate many of the allegations raised in the steelworkers' petition, and could bring additional cases at the WTO.
One high-profile issue still being examined by the U.S. trade representative's office is a complaint about China's restrictions on exports of rare earth minerals used in production of wind turbines, electric vehicles, solar cells and energy efficient lighting....
Kirk's office also said it had made progress on some of the steelworkers' concerns during the U.S.-China Joint Commission on Commerce and Trade meeting last week in Washington.
Beijing agreed to no longer require foreign companies bidding for large-scale wind power projects in China to have prior experience in China, the U.S. trade office said.
China also recommitted to eliminating discriminatory local content requirements in wind manufacturing and informed the United States that two other subsidy programs challenged by the steelworkers union had been eliminated, Kirk's office said.
Steelworkers President Leo Gerard acknowledged progress was made in the recent U.S.-China talks and said the steelworkers were satisfied with the administration's approach.
The USTR request resulted from the USW's petition under Section 301 of US Trade Law. When the USW filed the petition, I had a few notes, two of which still apply now:
(1) I must admit that I'm at a loss as to what the USW is really getting for its unknowing members' duesmoney here.... Section 301 is not like Section 421 (the tires case) or antidumping and countervailing duty investigations (the other cases mentioned), which can result in the unilateral imposition of remedial US tariffs on Chinese products. Instead, the very best outcome here is (i) the mutual resolution of the matter through bilateral consultations or (ii) a WTO case adjudicated by an independent panel of arbiters (unlike the, ahem, sympathetic US Department of Commerce or USTR). And, trust me, a 5000+ page petition drafted by a big DC law firm is not cheap (well, not if you want it done right). So what gives? Is this the world's most boring PR stunt, or am I missing something?
...
(3) It's no secret to readers of this blog that the USW complaint reeks of hypocrisy, as the Obama administration has already thrown billions of taxpayer dollars at green manufacturers over the last 21 months in an attempt to make them globally competitive. And it wouldn't be surprising at all for USTR to bring a WTO case against China's green subsidies, despite the fact that the US government's hands are also deep into the (green) cookie jar. What is surprising, however, is that the USW petition freely admits that US companies (and their unions, natch) have received tons of government cheese:...
In essence, the USW is openly complaining that the Chinese are better cheaters than we are, and the union thus wants the US government to call in the WTO's referees in order to stop China's cheating.
The first point still applies: it simply doesn't make much sense from anything other than a PR/muscle-flexing angle for the USW to have spent all that money to get USTR to initiate one small WTO case against China (and to resolve a few other little things on the side). USTR made clear in its press release that this is the only WTO dispute that it'll be filing based on the union's Section 301 petition. And USTR was pretty savvy in picking a subsidy program that was relatively simple (allegations of prohibited subsidies don't require proof of "adverse" trade effects, and the subsidies, if found to violate WTO rules, must be withdrawn immediately) and relatively non-controversial. It's pretty much the exact opposite of a case on China's rare earth minerals policies, which the USW demanded (and USTR dodged). So by filing the case today, USTR appeases the unions, avoids a major conflict (for now), and gets a pretty easy WTO dispute - one that, if valid, will actually help to (relatively) quickly eliminate trade-distorting subsidies through bilateral consultations or a WTO panel/Appellate Body ruling. Of course, China can always just terminate the challenged program and initiate another one, but that's not USTR's fault - it's an issue for all WTO anti-subsidy disputes.
My point (3) above is even more applicable now, seeing that the US just re-upped on a whole host of subsidies for US biofuels producers and "green" manufacturers. And that fact should make us all wonder how China will respond to this news. Recall that after the United States imposed tariffs on Chinese tires, China responded by immediately announcing trade remedies (anti-dumping and countervailing duty) investigations of US cars and chicken and by filing a WTO complaint. Will China respond to the new US "green subsidy" complaint with a formal WTO challenge of the United States own green subsidies or with new CVD cases against subsidized US exports? I wouldn't be surprised at all, but I guess we'll just have to wait and see.
Three concluding points re: the bigger picture here. First, the new US-China WTO dispute continues an increasingly troubling pattern of international trade disputes over nations' "green" policies, particularly subsidies. I've highlighted several of these over the past year, and should China retaliate in-kind, we'd have (at least) one more. And, as I've said repeatedly, I wouldn't be surprised if more disputes are on the way, given that pretty much every country in the world (especially the US and China) is simultaneously enacting "green" subsidies and protectionism at home, while trying to boost sales of its green products abroad. The only bright side (so far) is that the disputes have been peacefully handled at the WTO, through bilateral consultations or through WTO-sanctioned domestic trade remedies cases. One must wonder, however, if that good news will continue if/when the green trade tensions keep building.
Second, has the USW's (somewhat) successful Section 301 petition resurrected the long-dormant provision of US trade law? As you may recall, Section 301 was once a pretty powerful, contentious and much-used tool in the US trade enforcement arsenal, but the cases pretty much disappeared after the WTO came online in 1995 because (i) the law was amended to comply with WTO rules and thus no longer would result in unilateral trade measures against other WTO Members (which is pretty much everyone); and (ii) USTR (under the Bush administration) had rejected all recent petitions. Now, with USTR's acceptance of the USW petition and its filing of this new dispute, does this mean that other aggrieved unions and/or domestic manufacturers have a new way to push USTR into initiating a WTO dispute even when USTR (or some US companies) doesn't really want to do go down that road? As a longtime supporter of the resolution of trade disputes through the WTO, I can certainly think of worse things, although many US companies have eschewed direct confrontation with China (for obvious reasons). But a revitalized Section 301 and more WTO cases are certainly a lot better than the often-used alternative: paying off a Senator from, say, Ohio to sponsor WTO-illegal legislation imposing aggressive unilateral measures against possibly-innocent trading partners.
Finally, the new dispute might raise some long-dormant questions about the consistency of Section 301 with WTO rules. The EU challenged Section 301 back in the early days of the WTO, and a panel delicately ruled that the measure, in theory, didn't violate WTO rules because it allows USTR to postpone any enforcement action until after all WTO dispute settlement proceedings have been completed and authorization to retaliate had been granted. However, the WTO's Appellate Body never ruled on the issue (thus making the Panel's decision less definitive), and the Panel's ruling was (and still is) pretty controversial. More importantly, the Panel in the EU dispute made clear that the United States walked a pretty narrow tightrope with respect to Section 301 proceedings, and that the US could quite easily violate WTO rules in practice. Thus, USTR's actual application of Section 301 in this case could raise a whole host of issues that the EU challenge never really raised. I'm certainly not saying that China's definitely on solid ground for a new WTO complaint against the US application of Section 301 or the law itself, but such a dispute wouldn't surprise me at all (particularly after China boldly challenged the United States' seemingly-bulletproof decision against Chinese tires under Section 421 of US trade law). And that doesn't even get into what happens if the US loses the WTO dispute. Then what happens under Section 301? Does USTR (not to mention Congress and the USW) just drop the matter altogether? Hmmm.
I know, I know: I'm asking lots of questions tonight and providing few answers. But, hey, cut me some slack; we're in pretty uncharted waters here.
Question:When is a legislative provision imposing a tax on all Americans in order to financially benefit a single, politically-connected manufacturer in a Senator's backyard not an earmark?
Answer:When a United States Senator says it isn't, goshdarnit!
Please allow me to explain. A rather substantial stink has recently been building on Capitol Hill due to Sen. Jeff Sessions' (R-AL) desire to increase taxes on US sleeping bag consumers in order to benefit an American manufacturer of those products who just so happens to be located in Sessions' home state of Alabama. The Hill gives us a good rundown of the issue:
While Republicans mounted a chorus of opposition to earmarks in spending bills this week, Sen. Jeff Sessions has been quietly blocking a routine tax measure to demand the addition of what is basically an earmark: a new tariff that would benefit a single small business in his state....
Sessions is arguing for a tariff on Bangladeshi sleeping bags to benefit an Alabama company called Exxel Outdoors, which claims to be the only U.S. manufacturer of discount sleeping bags.
CEO Harry Kazazian told Roll Call the tariffs are needed to close a loophole in the Generalized System of Preferences, which allow for duty-free import of certain products from developing nations.
Enacted during President George H.W. Bush’s presidency, the law applies to goods that would not provide direct competition to domestic manufacturers and was designed to help the economic growth of developing nations.
Since it was passed, the legislation has largely gone unnoticed. Aides in both parties said it has typically been renewed through unanimous consent agreements and has become one of the background bills agreed to during evening wrap-ups in the Senate.
But over the past year, Exxel has found its business threatened by the GSP, as companies have begun importing inexpensive sleeping bags from Bangladesh essentially duty-free.
Kazazian said Wednesday that could spell the end for his Haleyville, Ala., company....
Earlier this year, Sessions sought to include language in the renewal of the GSP to close the loophole and save Exxel’s Alabama plant, but he has been unable to reach an agreement with Democrats and Republicans, who are pushing to pass the bill as is.
After numerous proposals to address the situation, Sessions opted to place a hold on the bill, which at this late date in the session means the GSP is likely to lapse at the end of the year.
Ok, let's fill in a few blanks here that The Hill missed. The GSP and other tariff preference programs provide duty-free access for about 5000 different imported goods from developing countries not only to benefit those countries, but also to benefit the myriad American businesses and families that consume those imports. The bill essentially eliminates vestiges of protectionism - high tariffs that remain in the US tariff schedule due to old school cronyism - that force American consumers to pay more for the protected goods. In short, and to use a phrase that protectionists just love, US preference programs "level the playing field" for beneficiary developing countries seeking to compete in the US market by lowering or eliminating existing tariffs that have tilted the playing field in domestic producers' favor. This "leveling," of course, also provides lower prices for US consumers. Indeed, according to the US International Trade Commission, US prices for high-tariff goods like clothing, dairy products, shoes and ball bearings are significantly higher than global prices, thus imposing a regressive tax on all consumers and forcing American families to expend more of their paychecks on the protected finished goods (and American businesses to pay more for the protected inputs). So GSP and other preference programs essentially provide tax cuts for all US consumers - tax cuts that disproportionately benefit those on the lower-end of the income scale.
In the case of sleeping bags, the US tariff schedule imposes a 9% tax on all imports of these products, thus preventing typical foreign producers from competing freely in the US market and forcing American retailers and consumers to pay more of their hard-earned money for sleeping bags. GSP eliminates that regressive tax for imports from (economic powerhouse) Bangladesh, thus enabling Bangladeshi producers to compete with US producers on a truly level playing field (i.e. one without any artificial barriers to trade due to a 0% tariff) and allowing Americans to pay less for their sleeping bags, if they so choose. We don't know where the money saved will go - maybe to savings or camping trips or S'mores or whatever - but what we do know is that American consumers won't be forced to waste their money on non-competitive domestic sleeping bags. They, of course, can very well choose to buy the American sleeping bags if they want, but that choice simply is not good enough for Sen. Sessions and his cronies. They want to amend GSP such that we are all forced to pay more for sleeping bags in order to "save" (read: prolong the inevitable demise of) a tiny sleeping bag manufacturer in Alabama.
And Senator Sessions is willing to take down the entire GSP program to do it, thus jeopardizing exporters and consumers of not only sleeping bags but also lots of other things that we use everyday like tires, jewelry, carpets, luggage, gloves, etc etc. According to the Coalition for GSP, total 2009 trade in products covered by GSP totaled over $20 billion, thus saving American families and companies (and their thousands of workers) millions of dollars annually and providing poor countries with a fantastic, free market way to help their citizens escape abject poverty. Yet all of these benefits - and others resulting from another preference program targeting the Andean region (ATPA, which covers Colombia, Ecuador and Peru) - will disappear next week because of a little earmark for an Alabama sleeping bag manufacturer and its 70 workers. Nice, eh?
Now, some, including Sen. Sessions argue that Bangladesh doesn't compete "fairly" with the United States because of its cheap labor costs, so this 9% tax is desperately needed to truly "level the playing field" and allow Exxel to compete in the US market. Now, leaving aside for a moment the absurdity of calling a 9% tariff on fairly-traded goods a "playing field-leveler," or the cold-yet-important economic question of whether American citizens should be subsidizing labor-intensive industries that simply can't compete on price with other, lower-cost manufacturers (hint: they shouldn't), does Sessions' "competitiveness" argument hold any water? In short, no for two important reasons. First, it's a real stretch to believe that a 9% tariff on sleeping bags from a single country will solve Exxel's competitiveness problems over the long-term, when America's anti-competitive tax and regulatory regime pose a much higher threat than some manufacturers in poverty-stricken Bangladesh. As Exxel's own CEO admits, "I spend more on health care in one month than they spend all year on labor,” and ObamaCare will only make those costs worse. Moreover, the United States has the highest corporate tax rate in the developed world. So attacking GSP simply masks Exxel's real economic problem - a domestic business environment that is, at present, hostile to business - and in the process harms lots of other (over-taxed and -regulated) American businesses that rely on GSP-elgible imports to remain globally competitive. Clearly, the Senator's approach to America's competitiveness problems is an awful deal for the US economy.
Second, GSP has a built-in "surge protector" for hyper-competitive products from beneficiary developing countries called a "competitive needs limitation." If imports from a country break the CNL (either total import value or as a share of total imports), they lose their GSP status. So the idea that super-competitive duty-free sleeping bags from Bangladesh are flooding the US market simply defies reality. Indeed, a quick review of US import stats from 2008-2010 reveals that China dominates the import market for sleeping bags and is once again increasing its market share here, and that Bangladesh, while gaining market share over the last few years, is still running a very, very distant second:
So if we revoke Bangladesh's duty-free status, the chart above makes clear that most likely outcome is not Exxel's resurgent dominance in the US market but instead (i) more market share for China, (ii) higher prices for US consumers and (iii) the denial of a critical lifeline to one of the world's poorest countries. Awesome.
Sen. Sessions, however, will have none of these measly economic or legal arguments. So let's talk in terms that he apparently does understand: politics and public image. Apparently, the good Senator isn't worried that his efforts might scuttle GSP, ATPA and all of the programs' attendant economic benefits, or that his efforts, while winning about 71 votes in Alabama, will do little to help Exxel in the long-run. But he is very, very upset that some people in Congress (and the media) are calling him (gasp!) a low-down dirty earmarker:
Sessions flatly denies the provision he is seeking is an earmark. His office claimed he is trying to undo an old earmark.
“Bangladesh gets to ship sleeping bags to America without paying a cent of taxes, and they get to use materials from China without paying a cent of taxes either,” Sessions spokesman Stephen Miller said Wednesday. “This outrageous earmark for Bangladesh is crushing America’s top sleeping bag manufacturer, Exxel, and threatening their workers’ jobs.
“Sen. Sessions is trying to end that injustice, and eliminate that earmark, by ensuring that Bangladesh and China have to play by the same rules as everyone else in the world. He is fighting to close a gaping loophole in our trade laws so that companies in America are at least allowed to compete on the same playing field. We need to stop giving Bangladesh workers an earmark so we can give these Alabama workers a fighting chance. Or is the message we want to send this Christmas that we will keep this loophole in place, even as our nation struggles with crippling unemployment?”
But that argument isn’t sitting well with Democrats or Republicans.
“Sen. Sessions is putting politics ahead of a remarkably successful program that supports more than 80,000 U.S. jobs and sustains economic growth and employment in Alabama and across the U.S. and the globe. Rather than working to sustain thousands of American jobs and small businesses — including many in Alabama — Sen. Sessions is looking to carve out protections for one single sleeping bag producer,” a Senate Democratic aide said.
A GOP aide agreed, arguing that, “You can call it whatever you’d like, but when you’re holding up legislation that effects a wide swath of the economy for a carve-out benefiting one company, it certainly doesn’t look good.”
The aide pointed out that the Senate GOP’s internal earmark ban for next year would bar not only traditional earmarks such as line-item appropriations, but also tax provisions and tariffs that would benefit an individual company.
Even the Senate’s earmark disclosure rules clearly define the tariff change Sessions is seeking as an earmark. For instance, the rules require the disclosure of any “congressionally directed spending items, limited tax benefits, or limited tariff benefits.” Limited tariff benefits are specifically defined by Senate rules as “a provision modifying the Harmonized Tariff Schedule of the United States in a manner that benefits 10 or fewer entities.”
So to recap: Republicans and Democrats in Congress call Session's protectionism an earmark; the GOP's new ban on earmarks classifies Sessions' protectionism as an earmark; and existing Senate rules define Sessions' protectionism as an earmark (three cheers for that, by the way). Yet when asked about whether the Senator is demanding an earmark, his staffer responds with, in essence, "hey, he's not an earmarker; everyone else is the earmarker," and then angrily adds that his boss' attempts to increase taxes on Bangladeshi sleeping bags (which, by law, are paid by American importers who then pass those costs onto American consumers, of course) from 0% to 9% is actually "leveling the playing field." Touchy touchy!
But hey, maybe Sessions is right. I mean, if you think about it, the existing GSP program, which has been law for decades and benefits all American consumers at the expense of a few, insular domestic industries, is an "earmark"... for the American people. And raising taxes from 0% to 9% on sleeping bags from Bangladesh does "level the playing field"... for Chinese producers. So you see, folks, this is all just a silly misunderstanding.
- Stone County Prosecutor Matt Selby has filed first-degree murder and armed criminal action charges against Timothy Lee Seaman, 34, of Crane for the November 2006 death of David Dulin of Hurley.
In 2008, Zackary Lee Stewart of Hurley was tried and convicted of first-degree murder for Dulin's murder in Greene County where the case was moved on a change of venue. He was sentenced to life in prison without the possibility of parole.
During Stewart's trial a key piece of evidence was questioned by Dulin's family. Selby said a bloody hat recovered at the crime scene belonged to Dulin. Family members approached Selby and told him they had never seen their loved one in possession of the hat.
Selby had DNA analysis expedited on the hat in the middle of Stewart's trial. When the analysis came back it was a bombshell, it connected DNA to three people other than Stewart; Dulin, Stewart's brother-in-law Tim Seaman, and another unknown person.
During closing arguments, Selby argued that the preliminary DNA information from the bloody hat reflected a DNA "hit" to Seaman made by an investigative database. He stressed that it was not a DNA "match" confirmed by comparing it with Seaman's actual DNA.
Seaman's DNA was in the CODIS database because of previous convictions of leaving the scene of an accident and property damage. He pleaded guilty last month in Stone County to charges of unlawful possession of a firearm and his bond was revoked after Stewart's release because Selby believed he was a flight risk.
According to online court records, Seaman has also pleaded guilty to assault, trespass, possession of marijuana, operating a vehicle without a license and not paying child support.
The Missouri Supreme Court reversed Stewart's conviction earlier this year. He was scheduled to be retried for Dulin's murder on February 14, 2011, when Selby announced on December 3rd that he was dismissing those charges saying he'd received "more information" about Dulin's death. "Based on all of the information currently available," Selby said, "I do not believe that it is appropriate to continue Zackary Stewart's current prosecution."
Stewart was released from the Greene County jail the same day into the waiting arms of family, friends and his attorney's, Stacie Bilyeu and Grant Rahmeyer. -
Stone County Prosecutor Matt Selby
- A little after midnight on November 29, 2006, Dulin called 9-1-1 and told the dispatcher that two men in their 20's and 30's had broken into his home and shot him in the head with his own .22 pistol.
As Dulin lay dying in his home at 403 Tin Can Hollow, he told the 9-1-1 operator that he did not know who shot him, but stated that the assailants were from Hurley and that one of the men said he was the "Eby girl's boyfriend."
Seaman was married, but seperated, from Candy Eby-Seaman at the time of Dulins murder.
Another man, Leo Connelly of Crane, also was charged with Dulin's murder at the same time as Stewart. The prosecutor dropped charges against Connelly about a year later. At the time of the murder, Connelly was living with Christy Pethoud, another sister of Stewart's. - According to the probable cause statement filed with the murder charge against Seaman, "A black semi automatic Walther that belonged to Dulin was missing from Dulin's home."
A gun found during an investigation in Springfield on February 17, 2007 was sent to the Missouri State Highway Patrol Crime Lab for testing. Shell casings found near Dulin's body matched the gun recovered in Springfield.
On August 20, 2008, Detective Karl Wagner interviewed a man from Hurley who told him, "He had purchased a black .22 with a laser light on it from Timothy in the fall about two years earlier....after David's murder."
Wagner goes on to write, "A person who told me they were in the company of Timothy Seaman on the night of David's murder told me they were party to a conversation with Timothy that night where Timothy discussed robbing someone for money to buy dope. Taking a gun and shooting that person was also discussed before David's murder. Some weeks after David's murder, Timothy told the same person that Timothy disposed of a gun taken from David's home the night David was shot. "
The High Court wrote in their ruling the following:
When asked if Tim had said anything to him about a homicide, Bales, Tim's nephew, responded, “He just told me that he and [John] Mills were at the house where it happened, and that's pretty much it, that they saw it. He didn't mention any other names or anything like that.” Bales testified that Tim did not tell him anything else and he never talked to Tim about the homicide again.
Selby says the investigation into Dulin's murder is ongoing.
Seaman is jailed in Stone County on $1 Million dollars bond his prelimary hearing is scheduled for February.
Stone County Prosecutor Matt Selby has charged a United States Marine with an Internet sex crime.
Sheriff Richard Hill says an investigation into Christopher Allen Downs, 26, of Seattle, began on April 27th after the man allegedly sent nude photos of himself to an undercover deputy posing as a teenager.
Downs, was serving in the United States Marine Corps and stationed in Camp Lejeune, North Carolina when the investigation began. He was deployed to Okinawa, and arrested as he returned from duty in Seattle on December 17th.
Stone County deputies worked closely with NCIS to locate Downs and have him returned back to the states to face charges. He is being held in Washington on $15,000 bond pending extradition to Missouri
There have been plenty more headlines over the last few days, so let's get right to 'em:
China's contentious policies on exports of "rare earth" minerals lead to the re-opening of (and foreign investment in) directly competitive US operations by the end of 2010. Three cheers for the free market. (Now, let's just hope that US protectionists and/or environmentalists don't doom the new operations and the jobs that come with it.)
Ecuador's ICSID arbitration win over a US oil company demonstrates, once again, that "NAFTA-style" investment provisions in international agreements aren't nearly the scary menace that anti-traders would have you believe.
Mexicans can't get their hands on American Christmas Trees because of absurd US protectionism. Feliz Navidad!
Caterpillar publicly presses Congress and the White House on 2011 passage of all pending FTAs, not just the KORUS. We should expect a lot more of this next year.
So the WSJ editorial board must read this blog, as they hit on both the US-Colombia FTA and those troublesome subsidies for Big Wind that I discussed last week. (Or I'm just blogging on really common issues.)
Here's a little something that doesn't pass the laugh test: "Yet the aramid tariffs flew under the radar in trade talks with South Korea. That could be because concerns from the U.S. textile industry were drowned out by several other large U.S. industries that support the new agreement." Me: Oh, yeah, that poor US textile industry just doesn't have any disproportionate sway over US trade policy. Rrrrriiight.
Once again, Rep. Jeff Flake (R-AZ) gives us hope that not everyone on Capitol Hill is a sleazy politician.
More proof that the prices of most globally-traded goods (e.g., computers) have declined dramatically since 1980, while non-traded services (e.g., haircuts) have actually increased.
An man from St. Charles has been charged with sexual misconduct with a child under 15 following an online chat with an undercover Nixa police officer.
Following a four month investigation, 28-year-old Robert D. Reichert was busted for allegedly exposing himself on a webcam to an undercover officer with the Nixa Police Departments Internet Crimes Against Children Division.
He is being held in the St. Louis County jail on a $10,000 bond pending extradition to Christian County.
- A man from Reeds Spring who was shot seven times during a domestic disturbance on December 15th remains in the intensive care unit following several surgeries.
Stone County Sheriff Richard Hill says Jason Devron Campbell, 40, was drinking and out of control at his home at 196 Jami a little after 10:45 p.m. when he chased his girlfriend to her sister's next door.
When no one inside the sister's house would open the door for Campbell, he kicked it in. A 39 year-old man inside the residence then shot Campbell who was holding a knife.
Hill says deputies have dealt with Campbell a number of times regarding burglaries, assaults and domestic violence. "We're very familiar with Mr. Campbell, " Hill stated.
Stone County Prosecutor Matt Selby charged Campbell with third-degree domestic assault and third-degree assault on November 17th for an unrelated incident. He pleaded not guilty to those charges and is scheduled to reappear in court for that case on January 25, 2011.
Hill says Campbell faces additional surgery, "At this point we don't know if he's gonna make it."
Authorities in Taney County are investigating the theft of a Christmas lighting display from the Branson Area Festival of Lights.
Chamber of Commerce officials say a new display called "Snowman Follies" which consists of a Snowman and six Christmas gift boxes, were stolen from the drive-through holiday light display sometime between 11:30 p.m. Thursday and 10:30 a.m. Friday.
Director of Tourism Development for the Branson Lakes Area Chamber of Commerce Kathleen Bullock says electrical wiring was ripped from the displays. A crew worked Friday to repair the damage, and the display has reopened. The value of the display is estimated at $1,500.
The holiday light display, which remains open through January 2nd, is located off Shepherd of the Hills Expressway with the entrance near the Sight & Sound Theater.
Anyone with information about the reported theft is asked to contact the Taney County Sheriff's Office at 417-546-7250.
One of this blog's many non-monkey-related themes has been the realization that 21st century global supply chains have rendered conventional trade statistics like the trade balance wholly unreliable indicators of the efficacy of current trade policy. Economist Mark Perry points us to yet further proof of this fact from a fascinating article in yesterday's WSJ about a new study on the origins of the iPhone and its impact on the US-China trade deficit. The WSJ story also hits on the political implications of this important research (emphasis mine):
One widely touted solution for current U.S. economic woes is for America to come up with more of the high-tech gadgets that the rest of the world craves.
Yet two academic researchers estimate that Apple Inc.'s iPhone—one of the best-selling U.S. technology products—actually added $1.9 billion to the U.S. trade deficit with China last year.
How is this possible? The researchers say traditional ways of measuring global trade produce the number but fail to reflect the complexities of global commerce where the design, manufacturing and assembly of products often involve several countries.
"A distorted picture" is the result, they say, one that exaggerates trade imbalances between nations.
Trade statistics in both countries consider the iPhone a Chinese export to the U.S., even though it is entirely designed and owned by a U.S. company, and is made largely of parts produced in several Asian and European countries. China's contribution is the last step—assembling and shipping the phones.
So the entire $178.96 estimated wholesale cost of the shipped phone is credited to China, even though the value of the work performed by the Chinese workers at Hon Hai Precision Industry Co. accounts for just 3.6%, or $6.50, of the total, the researchers calculated in a report published this month....
The result is that according to official statistics, "even high-tech products invented by U.S. companies will not increase U.S. exports," write Yuqing Xing and Neal Detert, two researchers at the Asian Development Bank Institute, a think tank in Tokyo, in their report.
This isn't a problem with high-tech products, but with how exports and imports are measured, they say.
The research adds to a growing debate about traditional trade statistics that could have real-world consequences. Conventional trade figures are the basis for political battles waging in Washington and Brussels over what to do about China's currency policies and its allegedly unfair trading practices....
Breaking down imports and exports in terms of the value-added from different countries can lead to some controversial conclusions. Some U.S. lawmakers, for instance, argue China needs to let its currency rise significantly against the U.S. dollar in order to reduce the trade gap between the two nations.
The value-added approach, in fact, shows that sales of the iPhone are adding to the U.S. economy—rather than subtracting from it, as the traditional approach would imply.
Based on U.S. sales of 11.3 million iPhones in 2009, the researchers estimate Chinese iPhone exports at $2.02 billion. After deducting $121.5 million in Chinese imports for parts produced by U.S. firms such as chip maker Broadcom Corp., they arrive at the figure of the $1.9 billion Chinese trade surplus—and U.S. trade deficit—in iPhones.
If China was credited with producing only its portion of the value of an iPhone, its exports to the U.S. for the same amount of iPhones would be a U.S. trade surplus of $48.1 million, after accounting for the parts U.S. firms contribute....
The latest results are broadly similar to analyses made by the Personal Computing Industry Center at the University of California, Irvine, of the trade and manufacture of another Apple product, the iPod. That research also found that Chinese labor accounted for only a few dollars of the iPod's value, even though trade statistics credited China with producing its full value....
Awesome. The new study is available here, and it adds to a growing number of studies which show, as I've chronicled extensively over the last two years, that globalization - in particular global supply chains, multinational specialization, cross-border investment and realtime logistics - has rendered old school trade stats increasingly worthless for everything except raw materials/foodstuffs and the most basic industrial goods. This latest work is especially cool because it shows that the United States derives almost twice as much as China from the actual manufacturing of the iPhone - a little tidbit that should quell some (misguided) criticisms of an earlier iPhone study which showed that, of the iPhone's $600 retail price, the United States derived $360 "only" from services (design, engineering, marketing) and profit, as opposed to manufacturing. (China got only $6.54 for assembly.)
Unfortunately, as the WSJ article mentions, many American politicians and so-called "experts" still rely on these obsolete data, in particular bilateral trade balances, to justify their trade policy demands, whether it be for Chinese currency appreciation or solving global "imbalances" or any other policy prescription that could have massive ramifications for the global economy and, in many cases, create serious new conflicts with some of our largest trading partners. For example, on the same day that the WSJ published this story, Sen. Ron Wyden (D-OR) released a new "report" breathlessly complaining about evil Chinese "green" protectionism and demanding that the Obama administration take action to "combat" China's policies. And Wyden's only proof of foul play? Yep, the US-China trade deficit in green goods:
“It has become clear to me that China’s aggressive and targeted industrial policies are giving its producers and exporters of green goods an unfair leg up on the competition, so much so that our green good trade deficit with China grew even while our overall trade deficit in these products shrank,” Wyden said, Chair of the Senate Finance Committee’s Subcommittee in International Trade. “Even in a good year, American workers and producers in Europe and Japan are falling prey to what appear to be unfair practices employed by China. A unified approach is needed to combat these challenges and I urge Ambassador Kirk and Secretary Locke to make clear to China that the U.S. places a high premium on a fair market for green goods.”
The report shows that the U.S. trade deficit with China in green goods grew by almost 60 percent, to $954 million in 2010, even as the U.S. green goods trade deficit with other countries shrank. The report also shows that the U.S. exported more green goods in 2010 than at any time in the previous five years. Despite this growth, U.S. exporters continue to lose market share to the Chinese in the biggest and fastest growing markets.
So to recap: on the same day that the nation's most-read newspaper published a big story about how global supply chains have (i) completely ruined conventional statistics on trade in high-tech goods and (ii) seriously undermined policies based on said data, Sen. Wyden released a new report advocating a fight with America's second-biggest trading partner based solely on the very trade stats that the WSJ article has just debunked.
You simply cannot make this stuff up. And it's just further proof that in the 21st century, using the trade deficit to plan US trade policy makes about as much sense as using astrology to plan your retirement. It might've been what they did in the old'n days, and it might've even worked for a few people, but it sure as heck ain't the best way to ensure a reasonable return on your investment.
All humor aside, this little coincidence also raises a very serious point. Since the original 2007 UC-Irvine study on the iPod and global supply chains, there have been many scholarly analyses revealing the obsolescence of conventional trade statistics like the US-China trade balance. Cato's Dan Ikenson has written several very good policy papers on this issue (including one we co-authored back in 2009); smart, widely-read bloggers like Mark Perry (and, to a much lesser extent, your humble correspondent) have repeatedly highlighted this important work; and newspapers like the WSJ and NYT have reported on the issue several times over the last few years. So, while the ADB's new iPhone study is certainly interesting and worth noting, it's not like it's really groundbreaking stuff. These issues have been widely-known, even in the mainstream press, for several years now.
Yet politicians like Sen. Wyden (and trust me, he's not alone) still rely on the trade deficit as some sort of accurate barometer for US and global trade policy. Indeed, the statistic is often the only basis for their calls for greater protectionism or more aggressive unilateral/multilateral trade "enforcement" actions - things that would dramatically alter, if not implode, the global economy. At some point, mustn't we ask whether our duly-elected representatives are acting not out of somewhat-humorous ignorance, but instead out of willful and pernicious blindness to the realities of globalization and the dangerous implications of their mind-numbingly absurd plans? I mean, at some point, don't we have to stop giving Wyden and his cohorts the benefit of the doubt and start demanding that they immediately cease and desist with the silly, dangerous trade deficit demagoguery?
