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Archive for September, 2003

Monday, September 29th, 2003

Back To The Salt Mines

Another year is starting at the UO, and what kind of omen can that pathetic WSU game be? Really, what are we going to do?

Anyway, DenBeste’s commentary on farm subsidies is mostly spot-on. I was not aware of ADM or their efforts to keep the sugar quotas in place, they do seem to be a rather decent stock pick, but the ethical problems DenBeste alludes too would be enough to turn me off.

In any case, my only issue with DenBeste’s commentary is his treatment of the sugar quota. ADM certainly has a role in keeping the quotas in place, but there is a consortium of sugar farmers who also wish to maintain this particular status quo. Additionally, the price of sugar in the United States is about twice what it would be without the tariff [and I don't believe the ASA's claim of 22% below "developed country average," whatever that is]. This costs the average American family about $8 per year, but the high price drives makers of many products to use corn sweetener, and increases the cost of consumer goods an incredible amount (This is according to Prof. Ron Davies). The USDA has proposed a system of auctioning import rights which may alleviate some of the issues surrounding current sugar policy, having not read the whole document I can’t point to its strengths and weaknesses, but I can say that there are a certain set of issues with any sort of sellable rights scheme.

Most estimates of cost to consumers hover around $1.5 billion, net utility loss estimates seem to be $1 billion. These protectionist policies are causing real harm to consumers at home, and having deleterious effects on many third-world nations. If local farmers in third-world countries could compete with the artificially low local prices (due to US “dumping” of surplus corn products) they could help to establish thriving local economies instead of spending their money on imports.

And now for the bit about basic game theory. This might get sort of boring, so just hang on:

While he is correct in asserting that the fewer barriers to trade, the more global welfare, it is possible for a large nation to achieve a net welfare gain over the free-trade outcome. Suppose there are two countries, we’ll call them Britain and the USA for the sake of argument. Now, when both countries engage in this scheme of completely free trade, total welfare is maximized, but welfare for each state is not. That is, the nations can gain from instituting some sort of protectionist policy. Say, a tariff or quota, for instance. If the US starts using a tariff on a good imported from Britain, the USA stands to gain; this will start a game of best responses, which leads to a trade war, which ends in a self-sustaining Nash Equilibrium which is a whole hell of a lot worse than the free trade point was. Point is, in a world of best-response, the free trade point is not a sustainable equilibrium. This is why the WTO [and GATT before it] exists, to prevent trade wars and keep things flowing relatively smoothly.

The main question regarding any sort of trade protection is whether or not it causes a net welfare gain for the nation using the barrier, in the case of US sugar subsidies, the answer is no. Agricultural subsidies should be eliminated, and barriers in that area of trade could probably come down relatively quickly with little harm to those sectors of the US economy. We should be focusing our strategic trade policy on things like domestic content requirements for foreign owned manufacturing, and other sectors which might be better for the aggregate economy. Our current agricultural policy causes net loss of welfare and only helps a small group of farmers whom the market would have put out to pasture long ago.

Tuesday, September 16th, 2003

Grumble…Grumble…Frickin’ Keystone Court….

The 9th Circuit, in it’s most appalling decision since last week, has delayed the California recall. I know it must be hard for people to punch a damn hole in a card, especially if those people are minorities. Gee, nice to know that the ACLU thinks so highly of the American citizenry, especially the minority citizens they claim to represent. Way to go guys.

Sunday, September 14th, 2003

OH NO, NOT RADIATION!

Steven Den Beste today explains exactly why depleted uranium ammunition is completely harmless.

Money Quote: I would be exposed to more radiation by spending a night in bed with a beautiful woman than spending the night next to a one-ton block of DU. (Nonetheless, I’d prefer the woman. It’s a risk I’m willing to accept.)

Friday, September 12th, 2003

New Issue!

The Summer Issue is now available online (to your right) and throughout highly discriminating outlets around campus.

Friday, September 12th, 2003

This Man Must Not Govern!

Earlier this week, Howard Dean said this “There is a war going on in the Middle East, and members of Hamas are soldiers in that war,” Jesus. And I suppose there’s a war going on in Northern Ireland and the members of the IRA are soldiers in that war. That must mean that ol’ Howard views Gusty Spence as some sort of Irish general….The man thinks HAMAS is a legitimate organization, and he’s leading the democratic polls…the left really is falling apart.

Sunday, September 7th, 2003

Whoo Hoo!

Now these are my kind of girls!

Monday, September 1st, 2003

Just What Lazy Euro-Socialism Needs

This (Yeah, okay, from Drudge, but it was too good to pass up).

A group of cross-party politicians in the German Bundestag has called for the introduction of a children’s vote. With the “voting right from birth”, parents should be able to vote on behalf of their children. The group said their aim was to attract more attention to children’s issues: “It is unfair that more than 5 percent of Germany’s citizens cannot vote”.

RIIIIIGHT…so let’s encourage a population boom in a welfare state with 10% unemployment by giving people an incentive to have children in order to gain more political pull. Sure, Germany may not be as bad as some of the other European nations in terms of its economy (Italy, France, Spain) but this idea is assinine. Next they’ll make sure that every owner of a dog can vote for his pet because, dammit, pets are people too.