November 10th, 2010

PK Icon

This NPR Story explains so much of what's wrong

This story so neatly captures everything that is dysfunctional with our government, where the waste really is, and our diminishing influence abroad.

Short version, we subsidize our cotton industry to the tune of $3.5 billion. This is a flagrant violation of World Trade Organization (WTO) rules. When Brazil sued us over this at the WTO in 2002, we lost. We ignored it. We filed appeals. We lost every appeal. We ignored it.

Under WTO, Brazil's recourse is to impose tariffs on our goods. So Brazil picked the most powerful U.S. industries and informed them that Brazil would impose punitive tariffs within 30 days unless the U.S. sent a negotiating team with sufficient power to reach an agreement on cotton.

Guess what, it worked! These industries went to the White House and screamed "Do something!!!" So the U.S. sent a negotiating team and agreed to pay Brazilian cotton growers approx. $147 million a year until we convince Congress to eliminate the $3.5 billion cotton subsidy.

Please note that, ten years ago, we would never dream of bribing Brazil. We would expect that Brazil would hurt itself by cutting itself off from our markets more than we would lose from being cut off from them. This is no longer the case. Brazil is a rapidly expanding economy, with 200 million people with a lot more disposable income. By contrast, most of Brazil's trade surplus is not with the U.S., but with the rest of the world. Also, a lot of other countries make what we make. So if U.S. companies face crippling tariffs, all the Brazilians with growing disposable income will buy the cheaper competing goods from other countries. We lose. By contrast, if we retaliated with matching tariffs, it would not appreciably harm Brazilian interests because we are just not as significant to their trade as they now are to ours.

I would love to see a fiscally conservative Congress eliminate both our $3.5 billion cotton subsidy and the ongoing bribe to Brazil. Especially as I expect other countries, particularly India, to begin using similar tactics. After all, all these countries are asking is that United States abide by our principles and compete in an open market. Germany manages to do it quite successfully, and without the benefit of cheap labor. So it can be done. We just have to be willing to do it.

Fun times ahead.
PK Icon

Progressives, Stop Embarrassing Me

Dear Fellow Progressives:

Please stop embarrassing me by making it impossible to have an intelligent conversation around Social Security. We are supposed to be the people with ideas. While I am all for keeping benefits at existing levels and preserving this as one of the few social safety net programs available, we are going to need to be able to start having real conversations that look at actual policy and stuff.

Using "death panel" type tactics and calling the deficit reduction commission the #catfoodcommission is not useful. It is stupid. We cannot win using Republican/conservative tactics. Making people more afraid and preventing rational conversation around emotional topics will just drive more elderly voters to the comforting lies of Glenn, Rush, and the rest of the Fear/Echochamber because these guys do it much better than you EVER will.

So seriously, stop. I know you are pissed off and depressed about both the Obama Administration and the election results. But the reaction needs to be well thought out and strategic, not just throwing dumb-ass scary crap all over the place in the hopes that you can panic old people.

Wouldn't it be much better to propose diverting money from corporate welfare programs to pay for maintaining Social Security benefits? Wouldn't it be better to suggest that raising corporate taxes to support enhanced social security benefits is appropriate because of the way companies consistently underfunded their pension obligations and because Wall St. hedge funds crashed everyone's 401(k)? Making these kind of arguments: "Yes, there's a problem, but the solution is to find ways to pay for Social Security rather than to slash benefits" will resonate with older voters who want to keep their benefits and puts the conservatives back on the defensive.

Finally, losing credibility on this front will raise serious credibility issues when the real sh*t goes down.