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Collective Choice from the American Perspective
Here’s a letter to the programming director at MSNBC:
You feature a Reuters’s story reporting that “Most Americans think the United States should raise taxes for the rich to balance the budget, according to a 60 Minutes/Vanity Fair poll released on Monday…. Sixty-one percent of Americans polled would rather see taxes for the wealthy increased as a first step to tackling the deficit, the poll showed. The next most popular way – chosen by 20 percent – was to cut defense spending (“Poll: Tax the rich to balance the budge,” Jan. 3)
In other words, most Americans want lots of government if other Americans pay for it.
Sincerely,
Donald J. Boudreaux
The culture that is Wisconsin
The state of Wisconsin has gone an entire deer hunting season without someone getting killed. That’s great. There were over 600,000 hunters. Allow me to restate that number. Over the last two months, the eighth largest army in the world – more men under arms than Iran; more than France and Germany combined – deployed to the woods of a single American state to help keep the deer menace at bay. But that pales in comparison to the 750,000 who are in the woods of Pennsylvania this week. Michigan’s 700,000 hunters have now returned home. Toss in a quarter million hunters in West Virginia, and it is literally the case that the hunters of those four states alone would comprise the largest army in the world.
the impending collapse of the united states
Niall Ferguson writes:
One day, a seemingly random piece of bad news -- perhaps a negative report by a rating agency -- will make the headlines during an otherwise quiet news cycle. Suddenly, it will be not just a few policy wonks who worry about the sustainability of U.S. fiscal policy but the public at large, not to mention investors abroad. It is this shift that is crucial: A complex adaptive system is in big trouble when its component parts lose faith in its viability.
Over the last three years, the complex system of the global economy flipped from boom to bust -- all because a bunch of Americans started to default on their subprime mortgages, thereby blowing huge holes in the business models of thousands of highly leveraged financial institutions. The next phase of the current crisis may begin when the public begins to reassess the credibility of the radical monetary and fiscal steps that were taken in response. Neither interest rates at zero nor fiscal stimulus can achieve a sustainable recovery if people in the United States and abroad collectively decide, overnight, that such measures will ultimately lead to much higher inflation rates or outright default. Bond yields can shoot up if expectations change about future government solvency, intensifying an already bad fiscal crisis by driving up the cost of interest payments on new debt. Just ask Greece. Ask Russia too. Fighting a losing battle in the mountains of the Hindu Kush has long been a harbinger of imperial fall. What happened 20 years ago is a reminder that empires do not in fact appear, rise, reign, decline and fall according to some recurrent and predictable life cycle. It is historians who retrospectively portray the process of imperial dissolution as slow-acting. Rather, empires behave like all complex adaptive systems. They function in apparent equilibrium for some unknowable period. And then, quite abruptly, they collapse.
Washington, you have been warned.
The USDA Tries to Come Clean
I’m sure they’ll quickly correct this, but as I post this, the USDA’s blog currently reads:
…the USDA is making every effort to make sure that today’s children are the first American generation to have a shorter life expectancy than their parents.
Link.
Today's 'wow' Momment
"Globalisation allowed the US to suck up the savings of the rest of the world and consume more than it produced." George Soros, FT.com January 23 2008.
Seismograph. The line indicates the daily volatility of the Dow Jones index, between 1901 and 2009.
How do you like your chicken: with or without chemicals?
Roughly speaking, that's the issue in the EC - Measures Affecting Poultry Meat WTO dispute (DS389), for which the U.S. recently announced it will request a panel. The panel request describes the issue as follows:
The EC prohibits the import of poultry treated with any substance other than water unless that substance has been approved by the EC. The EC has not approved any other substance. Consequently, the EC prohibits the import of poultry that has been processed with chemical treatments ("pathogen reduction treatments" or "PRTs") designed to reduce the amount of microbes on the meat, effectively prohibiting the shipment of virtually all US poultry to the EC. The EC has not published or otherwise made available the process for approving a substance. The EC also maintains a measure regarding the marketing standards for poultry meat, which defines "poultrymeat" as only "poultrymeat suitable for human consumption, which has not undergone any treatment other than cold treatment."
In 2002, the United States requested the European Commission ("Commission") to approve the use of four PRTs in the production of poultry intended for export to the EC: acidified sodium chlorite, trisodium phosphate, peroxyacids, and chlorine dioxide. However, after more than six years, including unexplained delays, the EC has not approved any of these four PRTs and instead has rejected the approval of their use.
The EC's failure to approve is despite the fact that various EC agencies have issued scientific reports regarding a number of different aspects related to the processing of poultry with these four PRTs. Those reports did not find any scientific basis for banning the use of these PRTs. To the contrary, the conclusion of these reports is that the importation and consumption of poultry processed with these four PRTs does not pose a risk to human health.
In a nutshell, the trade issue is the following: U.S. producers use chemicals to clean their poultry, but the EC does not allow the sale of poultry cleaned this way, so U.S. producers can't sell their poultry in the EC.
For SPS disputes, I'm always interested to see how the substance of the dispute is presented, in particular whether the claim is mainly about "discrimination," "necessity," or "science," or some combination of these three. Here, the parties seem to want to take different approaches to characterizing the dispute. From the USTR press release:
"The U.S. poultry subject to the EU ban is safe. There is no scientific evidence that the use of pathogen reduction treatments pose any health risk to consumers," said Nefeterius McPherson, a USTR spokeswoman.
By contrast, from the DG Trade press release: "we will defend our food safety legislation, which does not discriminate against imported products." So, in the battle of the press releases, it's about science for the U.S., whereas for the EC it's about discrimination (or lack thereof).
Of course, it's the panel request that really matters in this regard. Here are some of the key provisions the U.S. cited in the request and what they are mainly about:
SPS Agreement Article 2.2 - Necessity and Science
SPS Agreement Articles 5.1 and 5.2 - Science
GATT Article III:4 - Non-Discrimination
GATT Article XI:1 - Quotas and other Import Restrictions. (This one could be interesting if it explores the intersection between import restrictions and domestic regulations, given that the measure bans all such poultry, not just imports)
TBT Agreement Article 2.1 - Non-Discrimination
It's interesting that the U.S. press release does not mention discrimination, but the panel request cites some discrimination provisions. I'm not sure what to make of that. I would have thought it would be a good idea to sell the case as being about discrimination, at least in part.
It's also worth noting that in the consultations request, the U.S. left out explicit references to the non-discrimination provisions. There, the U.S. cited SPS Agreement Articles 2.2, 5, 8 and Annex C(1); GATT Articles X:1 and XI:1; Agriculture Agreement Article 4.2; and TBT Agreement Article 2 (without mentioning which sub-provisions).
The substance of the discrimination claims will also be worth following. From what I can tell, this will be a claim of de facto discrimination, as the measures apply to all products regardless of origin. It is these kinds of claims that often give the most insights into the scope of the non-discrimination standard.
Andy Warhol would be happy
David Reilly at Bloomberg notes that the pricing of credit default swaps on both the US government debt and Campbell’s is the same...
Here is the link. Hat tip goes to TheBrowser.
the Empiricist-in-Chief
Following up on yesterday's post about quantifying political speech, Dartmouth's Michael Herron - who is a first-rate political scientist and data hound - points out that Obama was the first president to speak about "data" in his inaugural address, and only the second to mention "statistics."
Chrysler hires BK law firm
From the WSJ: Chrysler Hires Law Firm Jones Day as Bankruptcy Counsel
Chrysler's move suggests the auto maker is preparing for imminent financial failure should its efforts to persuade Congress to deliver federal rescue funds fall short.
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Click on cartoon for larger image in new window.Rerun of a great cartoon from Eric G. Lewis, a freelance cartoonist living in Orange County, CA. |
