How Free Trade Helps You

Alan Reynolds of Cato wrote a nice article in the New York Times about how NAFTA benefits Pennsylvanians. Since Democrats are competing over who hates NAFTA in order to win some PA votes, it’s a great time to look at the facts.

Aside from what he has to say about NAFTA and Pennsylvanians, Reynolds does a great job describing how the shift in the number of manufacturing jobs isn’t due to outsourcing. It’s simply the consequence of a new age, and it’s affecting the whole world.

Technology (computers and robots) has long been shrinking assembly-line manufacturing jobs in virtually every nation. If we exported manufacturing jobs, it must have been to the moon. A 2006 Banco de Mexico study worries that in recent years employment in (Mexican) industry has been decreasing whereas the employment in the service sector has been increasing. Even China eliminated 10 million manufacturing jobs from 1991 to 2003, according to the Asian Development Bank.

Read the whole article here.

More on Gas Prices

David Kreutzer of Heritage wrote a great article about the folly of using price ceilings and windfall profits taxes to reduce gas prices. He makes clear these tactics only make the problem worse.

Kreutzer admits such ideas (which people see as punishing Big Oil) poll well, but we already tried all this in the 1970s and we ended up with a real mess. Correctly understanding the situation takes a bit of knowledge about economic cause and effect that most people never bother to look into.

In The Myth of the Rational Voter, economics professor Bryan Caplan exposes the discouraging gap between popular conceptions of economics and economic reality. With that in mind, it isn’t surprising that the same 1970s-era surveys showing the energy crisis to be the biggest problem also showed the most popular solutions were those that would amplify the very things causing the crisis. A large majority wanted more stringent price controls. A near majority even wanted to issue ration coupons.

Kreutzer gives a nice little economics lesson about the problems with price controls and profit taxes. It’s worth a read.

Der Environment Fuhrer

Sen. Barack Obama said today in Pennsylvania that he would want Al Gore to be involved in forming administration policy on global warming. A Global Warming Czar?

Obama said he wants to form a cap-and-trade system, and admitted it could mean higher electricity bills for consumers. Maybe the Democrats’ new campaign slogan should be: “Vote for us, and we’ll increase your energy costs.” (See prior post about gas prices.)

When asked about involving Gore in his administration, Obama had this to say:

“I would. Not only will I, but I will make a commitment that Al Gore will be at the table and play a central part in us figuring out how we solve this problem. He’s somebody I talk to on a regular basis. I’m already consulting with him in terms of these issues, but climate change is real. It is something we have to deal with now, not 10 years from now, not 20 years from now.”

No Senator. Entitlement reform is something we need to deal with now, not 10 or 20 years from now. Not Al Gore’s fetishes.

Solving High Gas Prices By Making them Higher

A House committee grilled top oil executives on the Hill yesterday, with the Democratic congressmen yet again demonstrating both a fundamental misunderstanding of a complex problem and their uncanny ability to offer ”solutions” that make problems worse.

 The Democrats are pushing the concept of lowering gas prices by taking away tax breaks for the oil companies. So, essentially, in order to reduce the price of gas they’re planning to raise the gasoline production costs for oil companies. It doesn’t take an economist to figure out which direction this will get gas prices moving, does it?

 The oil execs tried to explain their business is cyclical and their current profits are in line with other industries. Granted, that’s not very convincing, but Democratic suggestions that tax breaks should be nixed and the money should go to the holy grail of renewable fuels is astonishingly irresponsible to anyone who has knows even a little bit about the current state of the “renewable revolution.”

Of course the best solution for reducing fuel prices in the short run is removing restrictions and opening up the U.S.’s own fuel rich reserves to drilling. It will take a while for these oil fields to be fully utilized, but the fact that such projects are ramping up would be a self-fulfilling prophecy when it comes to gas prices. When Congressman Sensenbrenner asked the oil companies what could be done to bring lower prices, that’s what they said.

The Democrats refuse to believe any of this. It’s part of their environmentalist religion to believe green innovation and renewable energy and earth-friendly whatnot are the solution to environmental problems and to everything else. It’s an article of faith with them.

Here’s an excerpt from Hebert’s AP article about the hearing:

“We need access to all kinds of energy supply,” replied Robert Malone, chairman of BP America, adding that 85 percent of the country’s coastal waters are off limits to drilling.
   But Markey [D - Mass.] wanted to know why the companies aren’t investing more in energy projects other than oil and gas — or giving up some tax breaks so the money could be directed to promote renewable fuels and conservation and take pressure off oil and gas supplies.
   “Why is Exxon Mobil resisting the renewable revolution,” asked Markey, noting that the other four companies together have invested $3.5 billion in solar, wind and biodiesel projects.
   Exxon is spending $100 million on research into climate change at Stanford University, replied Simon, but current alternative energy technologies “just do not have an appreciable impact” in addressing “the challenge we’re trying to meet.”

Alternative fuels are not the answer. Neither is raising taxes on oil companies.

The Democrats’ grandstanding on the Senate and House floor, and finger-jabbing at oil executives creates the impression they’re really giving ‘em hell and doing something for the small guy. But if Democrats are successful at exploiting high gas prices for their environmental, anti-business agenda they’re going to end up costing Americans a lot more for gas then they’re already paying.

Horses and Babies

Today is apparently National Anti-Horse Slaughter Call-In Day. That means it’s time for all the people who enjoy horses (riding, not eating) to call and clog up the lines of their Senators and Congressmen. One Senate office had well over 200 calls mid-way through the day.

Legislation was already passed several years ago making horse slaughter illegal in the U.S.  What this bill, (S.311, HR503) would do is make it illegal to ship horses to Canada and Mexico to be slaughtered, where the meat is then be shipped to places that have a hankering for horse. In other words, it would help create a mini bureaucracy within the Department of Transportation’s giant bureacracy to monitor where horses are being shipped. And of course, as many ranchers and horse owners point out, what do you do with the old horses?

You can see a good explanation of why S.311 is bad legislation here. The American Quarter Horse Association explains that the bill would do more harm than good for horses.

Oh, and today is the anniversary of Roe v. Wade. The previously mentioned Senate office that had hundreds of calls about saving the horses? Not a single call about abortion.