Category: International Trade

President-elect Donald Trump

President-elect Donald Trump

Sen. Lindsey Graham, Republican from South Carolina, wants to change the rules of one of the biggest crony capitalist organizations in Washington.  He wants to make it easier for the Export Import Bank to dish out large amounts of corporate welfare to companies such as Boeing, which already brings in revenues upward of $95 billion per year.

USA Today reported in a recent article that “Graham, as chairman of the Senate Appropriations subcommittee that funds foreign operations, has added a provision to the 2017 spending bill that would allow the Export-Import Bank to consider projects of more than $10 million.”

Many supporters of free trade have long opposed the cronyism and corporate welfare of the Export-Import Bank, all while only celebrating minor victories.  In the summer of 2015, the Export-Import Bank’s charter expired forcing it to close its doors until five months later when Congress reauthorized the bank for another five years.

Another minor victory for those who oppose the Export-Import Bank might be the election of Donald Trump.  Although evidence from Trump’s past portrays him as a mercantilist, the president-elect is on record of making critical remarks toward the Export-Import Bank:

I don’t like it because I don’t think it’s necessary. It’s a one-way street also. It’s sort of a featherbedding for politicians and others, and a few companies. And these are companies that can do very well without it. So I don’t like it. I think it’s a lot of excess baggage. I think it’s unnecessary. And when you think about free enterprise it’s really not free enterprise. I’d be against it.

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Today at The Stream I provide some analysis of Donald Trump’s speech earlier this week at the Detroit Economic Club. As I conclude, “The trouble for Trump’s promised future lies in the impossibility of reclaiming a bygone era.”

In Trump’s campaign there is a mix of both nostalgia and optimism, which bookend serious critiques of America’s more recent past and the legacy of his political opponents in particular. This approach is appealing to an important, and often overlooked segment of the American public. These are the new voters who Trump has promised to bring to the GOP, and who have sometimes embraced his campaign with a kind of religious fervor.

But the broader appeal of this vision is dubious. Trump’s larger economic vision certainly does bear some resemblance to Bernie Sanders’ agenda, as they emphasize nationalism, interventionist trade policy, and a revitalization of traditional manufacturing and labor sectors. It remains to be seen how many of Sanders’ supporters will migrate to the similarly nationalist approach of Donald Trump.

The real challenge for Trump is to express this hopeful vision about the future while simultaneously hearkening back to an idyllic past. If Clinton is “the candidate of the past,” it is the recent past, the last few decades of the Obama administration and bad trade deals like NAFTA. Trump, meanwhile, is both the candidate of the future as well as of the more remote, perhaps even mythic past, in which America was first: in jobs, manufacturing, global influence, leadership, and military strength.

As Trump put it in his Detroit speech, “Americanism, not globalism, will be our new credo.” Joseph Sunde pointed out the salient Christian critique of such a credo recently, and I also recommend Abraham Kuyper’s treatise Twofold Fatherland for a proper and penultimate valuation of the nation-state and national identity relative to Christian citizenship in God’s kingdom. Twofold Fatherland is included in the forthcoming On the Church volume of the Abraham Kuyper Collected Works in Public Theology.
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The discussion is certainly on-going among the 220 opinion leaders who attended and spoke at Acton’s December 3 Rome conference In Dialogue with Laudato Si’: Can Free Markets Help Us Care for Our Common Home?

The Institute’s Rome office had hoped that the “dialogue” would continue well past the conference itself – within the Vatican, its pontifical universities and mass media – after heated discussion erupted over what is magisterium and debatable opinion in encyclical letters. When discussing environmental issues treated by Francis in Laudato Si’,  questions focused especially on technical matters related to economics and the material sciences as well as calling into question the expert secular counsel the Vatican often seeks to inform itself in areas of prudential judgment.

One of the panelists invited to the debate, economist Philip Booth of England’s St Mary’s University and Institute of Economic Affairs, was particularly outspoken about the pope’s own criticism of the financial industry and so-called manipulation of global food prices. (more…)

Blog author: jcarter
Wednesday, May 20, 2015
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FREE-STUFF-Several years ago economist Bryan Caplan provided the most succinct and helpful statement about how we should think about free trade: “We’d be better off if other countries gave us stuff for free. Isn’t ‘really cheap’ the next-best thing?”

As with any simplification, critics could find many reasons to grumble about what that leaves unstated (e.g., trade leads to offshoring of jobs). But it highlights an important point about why free trade matters. Free trade is about as close to a “free stuff” economy as you can get in the real world.

A primary effect of free trade, as Tim Fernholz says, is that when companies hire or set up factories abroad to take advantage of cheap labor elsewhere, Americans’ real income goes up because a lot of the stuff they’re buying is cheaper.
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At RealClearReligion, Rev. Robert A. Sirico offers an analysis of President Obama’s move to thaw relations with Cuba, a diplomatic opening that was supported by the Vatican. Citing Pope Francis’ appeals for “an economy of inclusion,” Rev. Sirico asks: “What, indeed, could be more inclusive than trade and travel?” More:

Free trade is not the solution to all economic, social and political problems. Nor does anyone expect it to be. That said, on my visits to Cuba and China, I have yet to meet anyone who thought restricting trade or travel helped, all of which will have to be negotiated once relations are normalized. Mutatis mutandis, those unfortunate to have to live under oppressive regimes are among the first to long for U.S. companies to setting up shop in their countries, gain new markets for their own products and will increase contact and opportunity for themselves. To have more exchanges with Americans at every level, whether it is through tourism, educational, trade or technological exchange, is what many Cubans want.

The open question is to see whether the Castro regime — which, after all, remains ideologically Marxist and viciously persecutes anyone who steps out of line — will use this thawing as a way of moving Cuba away from 50 years of one party rule and a top-down approach to the economy, and towards wider freedoms. Their track-record, to date, would not inspire confidence.

Read “The End of Cuba’s Double Despotism” by Rev. Robert A. Sirico at RealClearReligion.

The eyes of many in the world have turned to Cuba over the last day or so. A great deal has been made of the historic changes in the relationship between the US and Cuba and whether such changes fundamentally alter the situation of the political leaders and the elites in the island nation.

More interesting to me, however, are the personal stories of suffering and loss during the years of the Castro regime and the hope that dawns,  however slight it may be, with the normalization of relations. Perhaps the changes will simply serve to prop up a tyrannical regime, but there is real possibility that the day-to-day existence for millions of people will improve with greater travel, access to markets, and communication.

One of the great tragedies of the Castro regime was its suppression of non-approved cultural artifacts and forms, including traditional Cuban music. The Buena Vista Social Club’s closure was representative of a larger tradition of cultural pluralism and civil society in Cuba that had no place in the communist regime.

The guitarist Ry Cooder visited Cuba in the 1990s, and was able to reunite many of the original members of the club. Cooder put together an international tour for these wonderful musicians, including a trip to Carnegie Hall in New York City. That created an album and later a documentary. Here’s a scene from the documentary where a couple of Cuban musicians are visiting New York City for the first time:

The audio cuts out a couple minutes in, but you can see the wonder and appreciation that is apparent in their reactions. They see immediately and instinctively that the vitality and vigor of the city, with its commerce, exchange, culture, and liberty, are a marked contrast to their experiences in Cuba. “Activity! Activity! Activity!” one of them celebrates.

“This is the life!” concludes the other. Let’s hope that increased liberalization of engagement between the US and Cuba can help unleash more of this kind of vibrant dynamism among a people that stand in so desperate need of it.

Do yourself a favor and check out The Buena Vista Social Club.

Sic semper tyrannis, eh?

Sic semper tyrannis, eh?

The Burger King acquisition of Tim Hortons and the resulting plans to move the corporate headquarters under the taxing authority of the Canadian government is being derided by some as unpatriotic.

This is the latest in a long string of similar phenomena over the last decade or so, as we see patriotic loyalty (or the lack thereof) becoming a political issue in the context of offshoring, globalization, outsourcing, and so on.

A response to the charge of being unpatriotic would seem to me to require at least two points.

First, the responsibilities of a business owner, CEO, or corporate board are different than those of a government politician. They have different loyalties, so to speak. So to judge the one by the standards of the other is an exercise in missing the point.

Second, I would respond with a query along these lines: Which is more unpatriotic, a greater disservice to a nation, for someone to be involved in: moving a business from one country to another or making the tax environment in a country inhospitable to businesses?