A common refrain heard from political figures on both the left and the right goes something like this:  "I'm not for free trade, I'm for fair trade."  The statement is typically followed by some appeal for greater government interference in the marketplace, usually through increased trade tariffs against the perceived offender du jour.  The implication is that


Often the perceived unfairness is the result of the so-called "trade deficit" the United States has; that is, we buy more foreign-made imported goods than we export.  Another area of perceived unfairness in trade matters concerns the tariffs charged by countries on imported goods compared with the tariffs we charge those same countries on goods we import.  Often tied in with these arguments is the claim that such trade-related "imbalances" are resulting in a net loss of American jobs, particularly in manufacturing.

The trade deficit angle ignores a simple fact:  the United States only runs a trade surplus in years of extreme economic strife.  There was a 10-year period in which the US ran a trade surplus in 9 of those years:  the 1930s, during the Great Depression.  A trade deficit is the rule, not the exception, and it signifies a strong American economy -- we have the money to buy things, so we do.

The import/export tariff angle tends to be framed wrongly as well.  A tariff is a tax.  It is levied by the government on goods imported into a particular country, and is ultimately paid by consumers in the form of higher prices.  Therefore, when a government raises tariffs on imported goods and services, the government is raising prices on its citizens both directly and indirectly -- directly in the prices of the goods and services themselves, and indirectly in the prices of other goods and services produced by businesses who use the higher-priced imported goods.  An increased tariff on gasoline, for example, would raise the price of any item that is transported on a truck.

There's also another indirect cost of import tariffs:  lack of competition.  A tariff on, say, imported steel raises the cost of foreign-made steel relative to steel produced by an American company.  There is then less incentive for the American steel company to innovate or improve efficiency or quality; not only are American consumers then met with higher costs, but also with a lower quality product.

Finally is the jobs argument.  Supposedly unfair trade practices by other countries are resulting in the loss of American jobs.  However, this ignores several important facts as well.  First of all, manufacturing jobs are decreasing around the world.  The cause:  productivity increases due to technological innovation -- it simply takes fewer workers to make a given product than it did 50 years ago.  Increased productivity is a good thing -- more efficient production of goods and services provides more resources to improve other parts of our economy and lifestyle.  Yes, 50 years ago we had a greater percentage of Americans employed by factories than we do today; is anyone seriously suggesting we should go back to a 1950s-style way of life?  We have more choices today to buy better products at less expensive prices.  That sounds like progress, not a problem.

If American products are not able to compete on the world market, there are several potential reasons.  If the products aren't of a high enough quality, then it is the job of the companies producing those products to increase quality and/or decrease the price to meet the market demand.  If the products are too expensive due to oppressive regulation or taxation by the United States government, then we should act either to improve the inequitable situation or else decide that the relevant taxes and regulations are worthwhile to us as a nation and should be kept, uncompetitiveness be damned. 

If it is oppressive tariffs by another country's government causing American products to be uncompetitive in that country's market, then the answer is a little tougher.  The first  impulse is to raise our own tariffs in retaliation.  However, we've already established that the effect of high tariffs is a net negative on the consumer for several reasons.  So retaliatory tariffs is effectively getting back at a government for screwing its own citizens by turning around and having our government screw our own citizens.  Does that make sense?

I consider "fair trade" to be a transaction in which both seller and buyer participated freely, without coercion or fraud.  It is no business of the government whether I buy a Mercedes or a Ford, and if Ford wants my business they need to provide a product I want to buy at a price I deem to be "fair".  The government's role is to protect private property rights, enforce contracts, and protect against fraud or coercion.  As long as they are doing that, then I am engaging in "fair trade".

The collapse of the I-35W bridge in Minnesota is a startling and tragic event.  That "only" four people lost their lives is amazing when one sees the pictures of the wreckage and thinks about the sheer terror of a bridge, loaded with commuters, crashing into the swirling currents of the Mississippi River.  My condolences go out to those who lost family members or endured the horrific event.

But upon further inspection, the story grows darker still.  It seems that the government knew the bridge was structurally deficient; yet the bridge was not taken out of service, the tragedy-preventing repairs not made.  Worse yet, this bridge is but one of many across the country in similar state of disrepair, and apparently the price tag for bringing all these bridges up to standards is in the hundreds of billions of dollars.  Meanwhile, while these bridges have been standing in their structurally deficient glory, billions and billions of our tax money has gone elsewhere -- to new bridges to "nowhere", to pet projects in the home districts of senators and congressmen, to art museums, trains, and milk farmers.  Our sugar is more expensive and our Everglades more polluted thanks to the government spending millions each year to subsidize domestic sugar producers; our milk is more expensive and our money wasted thanks to milk subsidies; billions have gone to farmers so they would not grow crops; billions more go to ethanol producers already earning billions in profits.  Money is available to tobacco museums, billboards warning against premarital sex, and to prosecute people betting on football games while our bridges become death traps.  Yet Congress now says they need more of our money, in spite of the fact they can't manage the extreme amount they already get.

If the I-35 bridge were owned by a private corporation, the people affected by its collapse and its obvious negligence could sue and get at least some recompense.  Not that money replaces a life, but because the owner was the government, not even that avenue exists.  A private enterprise with a profit motive and a serious financial consequence for inaction would be more likely to get things done -- to improve and innovate -- than a pencil-pushing government bureaucrat whose job is to do the same job he did yesterday, with no consequences for inactivity or failure.

The broader lesson here is the answer to many of the issues we hear about in the current presidential campaign and in the congressional elections to come:  do we want to trust the same government who can't even keep bridges structurally safe with even more responsibility over our daily life?  Do we want to relinquish even more of our own choices, thus more of our own liberty, to such glaring incompetents?  Do we want to trust even more of our own money to be spent at the whim of people who don't understand that structural safety of a bridge is more important and a higher priority than funding PBS?

I know what my answer is.

 Michael Nifong, the now infamous prosecutor of innocents and withholder of evidence in the Duke lacrosse rape case, has been disbarred.  Justice is served.  In what was perhaps one of the most cynical, despicable moves in history, Nifong apparently decided that the key to his re-election as district attorney was to aggressively pursue three Duke students regardless of the lack of evidence against them (or, in some cases, evidence that actually exonerated them).  He lied to defense attorneys, he discarded DNA evidence exonerating the defendants, he rigged a police lineup, and he ignored evidence placing one of the accused somewhere else at the time of the alleged crime.  He will now never practice law again, and I hope there can be some sort of further retribution for the families whose lives were thrown into disarray by the actions of Mr. Nifong.

I saw an interesting poll result:  apparently, when you break out the main issues from the immigration bill, such as guest worker program, border enforcement, method for allowing illegals already here to pay fines and stay (as long as certain conditions are met), etc., public approval for each of these issues is pretty high, even among Republicans.  I saw a list of the questions, and they were very evenly worded and substantive, not leading or provocative.  Why then is there such outrage about the bill under debate in the Senate?  For one, there are some truly ridiculous provisions in the bill dealing with gangs, criminals, etc.  But I believe the biggest reason is that there has been little substantive debate on the issues addressed in the bill; instead, we've had nearly constant demagoguery, misstatements, and distortions about both the provisions of the bill and the motives of those who favor it.  Ultimately, I still believe that it's going to be incredibly difficult to get something passed, through the House, and then through the conference committee.  I think this is going to be continuing source of discomfort for both sides of the aisle.

The last album by the Editors was a rich retro to the 70s Joy Division sound.  If the first single, "Smokers Outside Hospital Doors" is any indication, they are building on their debut and adding a few masterful twists, like a soaring, anthemic guitar.  I don't know what the rest of the forthcoming album will sound like, but if "Smokers" is any indication, it will be one of the best this year.  It certainly is one of the best songs I've heard in a long time.

Has anyone else noticed that every single one of the Democratic candidates for the presidency have already endorsed raising taxes?

Quietly, gasoline prices have dropped by about $0.50 per gallon over the past several weeks around Houston.  Is this the result of price "gouging"?  If the oil companies are conniving to raise prices, why would they ever allow them to fall again?

Speaking of gasoline prices, even at $3 per gallon, it is still cheaper than a 16 ounce latte at Starbucks.  Is Starbucks guilty of price fixing also?  Gouging?