Friday's interesting reads

"March trade gap narrows more than expected" Reuters (here is another article in the WSJ):

"In a sign the current U.S. economic slowdown is taking a toll on consumer and business demand, major import categories like autos and auto parts, industrial supplies and materials, consumer goods and capital goods all showed declines in March."

Isn't this just an effect of the weak dollar? It's the price we pay for letting the dollar fall so precipitously that we import less. It's one of the reasons inflation is becoming a larger issue of late.

"SENATE Key Vote Alert - Flood Insurance" Club for Growth:

"This proposal would direct the Treasury Secretary to offer subsidized funding for state-run insurance programs, whether responsibly designed or not, potentially putting taxpayers on the hook for more billions of dollars in losses.

This amendment is fiscally irresponsible, and would further distort insurance markets and encourage unwise risk taking that would endanger lives and property. Perhaps the worst feature of this amendment is that it would encourage an irresponsible design of state catastrophe funds.

This reckless add-on to an already bankrupt national flood insurance program could dramatically increase spending and lead to higher taxes. It would clearly crowd out private reinsurance coverage, allowing government to increase its bureaucracy at the expense of the private sector. This amendment should be vigorously opposed."

Darn right it should be opposed. Just like the farm bill, if a certain group wants a certain something, they should pay the costs. If they want to live somewhere, they should pay the full costs to live there. Don't ask me to subsidize it for you.

"Bush Will Veto $296 Billion Farm Bill, Schafer Says " by Alan Bjerga for Bloomberg (HT: Sallie James with Cato, who simply said "Excellent"):

"President George W. Bush will veto the farm bill proposed by congressional agriculture leaders because it exceeds spending guidelines and offers no ``real reform,'' Agriculture Secretary Ed Schafer said."

I actually saw something like this last night on the WSJ, but I couldn't find it this morning. I hope he does and I hope he holds strong. And I hope Senator Chambliss and the others can't raise the votes to override, though I'm sure they handed out enough favors to make sure they can. Ugly.

"Global Warming and the Burmese Cyclone" by Indur Goklany with Cato:

"So I checked the sea surface temperature (SST) “anomalies” (that is, differences in temperature from the long-term average) along the track of Cyclone Nargis to see if SST might have been unusually warm from April 28th to May 3rd (when it hit Burma) of this year compared to last year. Comparing the SST anomalies from NOAA for April 28, May 1, and May 5 of 2008 against April 28, May 1, May 3, and May 7 of 2007, SSTs along the track of Cyclone Nargis don’t look that much different from last year. And for April 30, May 3, and May 7 of 2005, the Bay of Bengal seems to have been noticeably warmer."

This is in response to Al Gore suggesting the cyclone is due to global warming. I can't find it right now, but Paul Krugman said the same thing about the drought in Australia. An editorial at IBD had this to add:

"So why the hype? Well, global warming is a growth industry designed to keep Earth and some bank accounts green.

Gore himself joined the venture capital group, Kleiner Perkins Caufield & Byers just last September. On May 1, the firm announced a $500 million investment in maturing green technology firms called the Green Growth Fund.

The group announced another $700 million to be invested over the next three years in green-tech startup firms. But if the green technology business, uh, cools down, there will be no return on that investment."

"Will They Vandalize the Pepsi Machines This Time, Too?" by Andrew Coulson with Cato:

"Needless to say, the bill has earned the “intense opposition” of New Jersey’s large and powerful public school employees union. The last time somebody offered Jersey’s poor kids an escape from the union-dominated public schools, the union made that somebody an offer that was difficult to refuse.

The 'somebody' in question was PepsiCo. As I wrote in Market Education:

'In late October of 1995, officials of the Pepsi company announced at Jersey City Hall that their corporation would donate thousands of dollars in scholarships to help low-income children attend the private school of their choice. The immediate response of the local public school teachers’ union was to threaten that a statewide boycott of all Pepsi products could not be ruled out. Pepsi vending machines around the city were vandalized and jammed. Three weeks later, company officials regretfully withdrew their offer.'"

Are unions good for nothing but protecting their own turf?

"NCAA starving small schools with APR" by Spencer Hall for the Sporting News (HT: Dan Shanoff):

"Rather than some sort of conspiracy, the APR and its sanctioned, slow strangulation of smaller schools unable to pay for massive academic support centers is the result of something even more unstoppable and faceless: bad policy.

The NCAA and its members, faced with the legitimate issue of measuring how well schools balance athletics and academics, created a well-intentioned system. Like many well-intentioned systems -- such as President Bush's No Child Left Behind Act -- its actual effects are disastrous.
APR penalties slowly will erode a smaller school's ability to recruit athletes who likely will need academic support to make it through four years of balancing school work and athletics.

In short, the APR is all sticks and no carrots, a penalty-laden system with few outs for small schools struggling to get programs off the ground. (See: Florida Atlantic and Florida International.)

Like No Child Left Behind, it hits the worst of the worst, penalizing them from the starting line and all but encouraging a new variety of fraud by attaching the school's progress to a single number -- a number that could, in crafty administrative hands, become a fiction the NCAA would rubber-stamp happily ... especially in the cases of larger schools that seem to escape punishment year in and year out."

After listening to this podcast with Michael Lewis, I'm convinced players should be paid. I'd even go so far as to not even call them student athletes by absolving them from the responsibility of having to go to class. If they want to go to class and get a degree, let them. Academic eligibility would no longer be an issue. Lewis made the same point, but if a guy is 6-6, 340 lbs and would be a tremendous left tackle, why tie his ability to realize the full value of his abilities to academics? A player can't enter the NFL until he's been out of high school for at least two (or is it three?) years, so he has to go to school. I know they're doing it because they think it's in the best interest of the kids, but I think it just invites corruption.

"Vladimir Putin pledges to transform economy of Russia into a world leader" by Carl Mortished for TimesOnline (HT: CFAI Financial NewsBrief):

"Mr Putin vowed to tackle inflation, fight corruption and bring down taxes in a speech that differed from the low-key inaugural presidential address delivered by Mr Medvedev."

If he does this, he will be well on his way.

"China's Undervalued Currency Benefits Americans" by Terry Miller for The Heritage Foundation (HT: Club for Growth):

"The China Currency Manipulation Act of 2008 accuses China of engaging in 'protracted large-scale intervention in currency markets, thereby subsidizing Chinese-made products and erecting a formidable nontariff barrier to trade for United States exports to the People's Republic of China.' This is a novel use of the term 'subsidy,' which normally refers to government payments to producers of an item. In this case, the government of China is purchasing U.S. dollars or U.S. government securities, so the Chinese government payment is ultimately going to the U.S. government. To the extent that the renminbi is undervalued as a result, the benefit goes to U.S. consumers and businesses, which pay lower prices for Chinese goods imported into the United States. Chinese manufacturers get less for what they sell as a result of the process. If there is a subsidy here, the beneficiaries are U.S. consumers and taxpayers...

The measures proposed by some in Congress to pressure the Chinese to inflate the value of their currency would help some Americans—those few manufacturers that compete directly with Chinese firms—and hurt many others, including producers who use Chinese imports in their U.S. production processes, and American consumers buying Chinese goods. An inflated renminbi won't punish the Chinese; it will, on balance, punish Americans.

For the American economy as a whole, the currently undervalued Chinese currency brings a double benefit. We get both more goods and services, and more investment capital to help our economy grow and keep our unemployment rate low."

"Vets deserve free college tuition" AJC editorial by Jay Bookman:

"U.S. Sen. James Webb, a Virginia Democrat and Vietnam combat veteran, is championing legislation to improve college tuition benefits for those who volunteer to serve their country in the U.S. military...

Our men and women in uniform —- less than 1 percent of the American population —- bear a vastly disproportionate share of the burden of the wars in Iraq and Afghanistan. Giving them the chance to earn a college degree is not too great a reward for that service."

I have a problem with this. First of all, they aren't volunteers. The last I heard, they do get paid. They volunteered for their job no more than I volunteered for mine. No one forced them to join the military (though I'm grateful they did). Second, this only makes sense to me if the armed forces aren't getting enough enlistments at the current pay rates for military personnel. I would think that if they gave a free education to everyone who enlists, we'll see a tremendous increase in enlistments. Is this what the military needs? I don't know. (As a side note, the article mentions how Sec of Defense Robert Gates is afraid that giving free education would decrease re-enlistments, presumably because they would opt for school over service. My takeaway from that is they prefer experienced soldiers.) And last, if we do need an increase in enlisted men and women, why not simply raise their pay and let them decide how to spend it? That way we give the benefit to everyone who enlists, whether they have a college degree or not, and we aren't on the hook for potentially high education costs.

I don't want this to be a slight to our military men and women; I personally pray for them often. I just don't think this is wise policy.