Thursday's interesting reads

"The 18-Cent Solution" NY Times op-ed by Bryan Caplan (HT: Don Boudreaux):

"In a perfect world, policymakers would respond to energy crises with benign neglect. In the real world, though, they know constituents want action. So it’s better for them to balance their abuse of the oil industry with an occasional olive branch. In that sense, Senator Clinton’s pairing of an excess profits tax with a gas tax holiday isn’t nearly as bad as an excess profits tax all by itself.

This sounds cynical, but I’m just being honest. Politicians are constrained by public opinion. When the public rejects the mundane explanations for high gas prices — big boring facts like rapid Asian growth — politicians aren’t going to correct them. The best we can expect is for Washington to try to channel the public’s misconceptions in relatively harmless directions. We could do a lot worse than the gas tax holiday; in fact, we usually do."

"Flight attendants, mechanics say Delta merger will hurt consumers" by Bob Keefe for the AJC:

"Attendants union, said she was concerned that a new, bigger Delta could use its heft to cut labor costs and keep out unions. She said the financial problems facing all airlines today demands attention from regulators.

'We believe Congress must take a hard and very serious look at where this industry is heading,' Friend said. The current airline industry, she added, 'is failing employees, consumers and communities.'"

What does a company owe its employees, other than the pay they promised for working? What does it owe to communities? As for consumers, my guess is they've been over-served for far too long; why else would the entire industry be operating at such tremendous losses for such a long time? I don't understand how these companies can still be in business if they lose as much money as they do.

"Happy 109th, Fritz!" by Don Boudreaux at Cafe Hayek:

"Interfering with trade and technological advances in order to protect certain producers from disappointment (and, hence, from the need to adjust to changes) not only makes the economy less productive over time, but also infuses it with greater uncertainty."

"Colbert on the Gas Tax Holiday" (via Greg Mankiw):

"I'm annouoncing a truly bold initiaive: Stephen Colbert's total gas holiday. From here on out, free gas for everyone...Immediate relief from the gas crisis...

"I'm sure you're asking, 'How will we pay for unlimited free gas?'. The answer is simple -- I don't care. Besides, have you forgotten about a little thing called "our grandkids"? Because they are very generous, even though they don't know it yet. They can be the generation that walks to work or uses public transportation." [The text on the screen said, "No Child Left Unscrewed".]

"Valeo's Revenge" by Ilya Shapiro at Cato (HT:Club for Growth):

"So instead of "leveling the playing field" between candidates for office, the Millionaires' Amendment further tilts it the incumbents' way. That's the other unfortunate aspect of this mess: Not only is this tremendously complex regulation bad policy, it's also unconstitutional.

First, the provision burdens the exercise of political campaign speech without serving any compelling governmental interest. By enhancing the political speech of a self-funded candidate's opponent -- through the increased contribution limits and unlimited coordinated party expenditures -- it creates a de facto expenditure limit, in essence restricting speech beyond the $350,000 threshold. The Supreme Court ruled in the famous 1976 case of Buckley v. Valeo that expenditure limits were unconstitutional.

Second, the Millionaires' Amendment does not prevent actual or apparent corruption because there is no threat of a quid pro quo from a candidate spending his own funds. The provision actually undermines the stated interest in combating corruption by preventing candidates from reducing their dependence on outside contributions -- and increasing their opponents' purportedly corrupt contributions and coordinated expenditures.

Finally, the compelled disclosure requirements further penalize candidates for exercising their right to engage in political discourse by imposing significant personal liability on them. The disclosure requirements also infringe on a candidate's First Amendment right not to associate with campaign contributors. And they do so without serving any informational interest the public may have, because the underlying information is already disclosed to the FEC under other McCain-Feingold requirements."

"In Defense of RINO Hunting" WSJ op-ed by Pat Toomey:

"Republicans would be better off, the argument goes, if the Club PAC spent its money targeting Democrats instead of liberal Republicans. This is the argument of politicians who care more about maintaining power than using that power to implement conservative policies.

Thus comes the demand for an uncompromising obeisance to the bottom line: Elect as many Republicans as possible, regardless of how they will vote once in office.

It is for this reason that challenges to incumbents are deemed sacrilegious, no matter how far the incumbent has strayed from conservative principles. And it is for this reason that party leaders defend some of the most liberal incumbents, also known as RINOs (Republicans in Name Only), and assail the Club PAC for helping to elect true conservatives...

Winning for the sake of winning is an excellent short-term tactic, but a lousy long-term strategy. Just look at the consequences of the 2006 congressional elections, when the GOP lost control of both houses of Congress.

A Republican majority is only as useful as the policies that majority produces. When those policies look a lot like Democratic ones, the base rightly questions why it should keep Republicans in power."

I totally agree with this. I hate the party-loyalty-at-all-costs idea that seems to have taken over politics. My primary draw, honestly, is to the Republican Party is economic conservatism. My favorite line is "A Republican majority is only as useful as the policies that majority produces." As I've mentioned, I'm not terribly pleased with some of the policies my own Republican senators from Georgia have endorsed. On the issue of immigration, I realize I've separated myself from mainstream Republicans, but with the farm bill, it just disgusts me.

"The Biofuels Backlash" WSJ op-ed (from yesterday):

"Like Suzanne Somers in "American Graffiti," the perfect biofuel is always just out of reach, only a few more billion dollars in subsidies away from commercial viability. But sometimes even massive government aid can't turn science projects into products. The industry's hope continues for cellulosic ethanol, but there's no getting around the fact that biofuels require vegetation to make fuel. Even cellulosic ethanol, while more efficient than corn, will require countless acres of fuel if it is ever going to replace oil. Perhaps some future technology will efficiently extract energy from useless corn stalks and fallen trees. But until that day, Congress's ethanol subsidies are merely force-feeding an industry that is doing far more harm than good.

The results include distorted investment decisions, higher carbon emissions, higher food prices for Americans, and an emerging humanitarian crisis in the developing world. The last thing the poor of Africa and the taxpayers of America need is another scheme to conjure gasoline out of corn and tax credits."

"The Farm Bill and Free Trade" WSJ op-ed by Bernard Gordon and Sungjoon Cho:

"International trade is essential for the American farmer. The U.S. exports tens of billions of dollars worth of farm products every year. To keep markets open and find new places for Americans to sell their goods, the U.S. works with the World Trade Organization (WTO) to hold ongoing talks in Geneva. The so-called Doha round currently underway deals especially with trade to developing countries. It has been stuck at an impasse over subsidies that developed countries give to farmers.

That impasse could soon be broken – if Congress doesn't step in with fresh subsidies for American farmers. Crawford Falconer, the chairman of the Doha Round's farm talks, is circulating a proposal for cutting tariffs and subsidies. The proposal reflects some seven years of negotiations, and is the framework which WTO negotiators are using to hammer out a deal. The president's veto threat of the farm bill was an answer to complaints that U.S. farm subsidies are the main obstacle to completing the Doha Round...

There's another benefit to vetoing the farm bill: Reaching a Doha deal will help forestall efforts to turn, instead, to regional or single-country trade deals. These pacts blossomed in recent years – there are now more than 380 of them world-wide – and are billed as "free trade agreements." In fact they are preferential trade agreements.

Economists call them "trade diverting," and they tend to slice and dice the global trading system in ways that hamper the flow of global commerce. They also tend to hurt small countries and small companies, neither of which can compete as well in a complex network of single-country trade agreements as they can within a global trading system."

I read something on The Economist (either a blog or print, I can't remember), that some research has shown that bilateral trade agreements make multilateral trade agreements more unlikely. If this is true, it's very infortunate. In fact, it wouldn't surprise me tons. I would imagine that a lot of the political capital necessary to remove trade protections can only be won by granting favors to specific groups, which is why the FTA's are so think. However, in the short term, I think the agreements are worth the costs, because they get us closer to the longer term goals of completely free trade. I hope I'm right.

"Land of the free?" Lexington column for The Economist:

"But how good is America at living up to its own ideals? A new study by Freedom House tries to answer this question. The fact that Freedom House has devoted so much attention to the United States is significant in its own right. Founded in 1941 by a group of Americans who were worried about the advance of fascism, Freedom House is now the world's leading watchdog of liberty. The fact that “Today's American: How Free?” is such a thorough piece of work makes it doubly significant."

Here is a link to the book on Freedom House's website. Cival liberties (wiretapping, Guantánamo, etc.) are a hard one for me in a time of "war" (or at least international conflict). I realize there is a tradeoff between liberty and safety. I just don't know where I fall. It just isn't as clear to me as economic liberty.