Blog
Isn't it Time to Take Another Look at Free Trade?
April 28th, 2010 - 8:58am
Filed under Economy
The economy is struggling through one of the worst periods in modern history. Several experts have put forth their suggestions of what we must do to end the suffering and emerge at the beginning of a recovery. Most of the proposals involve continued spending, raising taxes, or a combination of the two. Missing from the dialogue is to look at the methods that made America's economy the envy of the world. That was the implementation of Capitalism and its primary tool: free trade.
United States Trade Representative Ron Kirk recently warned the Congress that it is time to pass free trade legislation. Although President Obama has identified job creation as priority one in his recent speeches, it doesn't appear the Congress is getting the message as little is being done to facilitate free trade and to create jobs in the United States. Even the stimulus money, although paid to American firms, ends up creating jobs in China and other cheap labor markets.
Although free trade will stimulate export-driven jobs and would help to meet Obama's goal to double the United States exports over the next five years, we still see Europe claiming many of our markets overseas. The only supporters of free trade policies seem to be conservatives and business groups in Washington. Labor, through their lobbyists such as the AFL-CIO and other labor groups say they NEVER will support any program that promotes free trade. Alan Blinder writing in the Library of Economic Liberty periodical said that the divergence between economists' beliefs and those of well-educated men and women on the street seems to arise in making the leap from individuals to nations. In running our personal affairs, virtually all of us exploit the advantages of free trade...without thinking twice. The fact that another country becomes wealthier does not mean that America becomes poorer. One reason that the United States did so much better than Europe for two centuries is that Americans had free movement of goods and services across our state lines while European countries "protected" themselves from their neighbors.
Many estimates have been made regarding the "saving of jobs" through trade restrictions. Invariably, these trade restrictions end up costing Americans more. Consider the $1,285,000 we lose annually for every job in the luggage business, $199,000 lost annually for each job in the textile industry, $1,044,000 lost annually for each job in the softwood lumber industry, and $1,376,000 a year for each job in the benzenoid chemical industry! On the other side of the issue, free trade provided 1.2 trillion dollars in revenue and supported one in five manufacturing jobs here in the United States. With more than 95% of the world's consumers living outside the borders of the United States the global marketplace is important to domestic companies.
Daniel Griswold of the Cato Institute reports that a recent study by the Institute found that 90% of Senators and Congresspersons favor trade restrictions over free trade. This study shows a drifting towards isolationism. Americans pay dearly for the government intervention in free trade matters. The trade barriers erected by Congress cost Americans an estimated 70 billion dollars a year by raising prices and reducing competition. Daniella Markheim, of the Heritage Foundation, said that hiding from or ignoring the debate on globalization will not promote a free trade agenda. Rather, this approach leaves the voice of protectionism as the only voice being heard on trade issues.
The Institute for International Economics has calculated that moving from today's trade environment to one characterized by perfectly free trade would generate an additional 500 billion dollars in annual income. Also, the University of Michigan concludes that if we would reduce the trade barriers on agriculture, manufacturing, and service activities by just one third we would increase our annual income by another 500 billion dollars. So, the message is clear. Congress needs to support trade agreements, ratify the agreements already in place with a number of countries, stop protectionism legislation, and eliminate all international trade barriers. - By: GN Member John Ridings Lee
CBS ‘60 Minutes’ Explores Quilliam’s Work
April 26th, 2010 - 1:29pm
Filed under Quilliam
Quilliam's counter-extremism work has been the subject of the latest edition of CBS '60 Minutes', one of the US's most prominent and influential current affairs TV programmes. the Qulliam Foundation is a partner of Gen Next.
The programme's lead 14 minute segment, entitled 'Jihadists and The Narrative', focuses on Quilliam director Maajid Nawaz's involvement in a hard-line Islamist group and on his subsequent decision to reject Islamism - while remaining Muslim - and to co-found Quilliam to directly challenge extremism in all its forms.
First aired on Sunday evening in America, the programme also covers Quilliam's ground-breaking work in Pakistan, its regular events in British universities and its wider efforts to puncture Islamist narratives.
Maajid Nawaz says:
'Today, as this programme shows, I believe that Muslim-led organisations need to do more to actively undermine the ideas and aims of the terrorism-sympathising groups that fester in our midst - condemning terrorist violence is not enough. And in this battle of ideas, governments cannot shy away from taking sides. Such past blunders has resulted in our present malaise.
'For how much longer we try to tackle terrorism, while not uprooting the narrative and ideology behind Islamist violence? This programme helps explain the challenges that we all face.'
The programme can be watched online here.
Quilliam's annual progress report can be downloaded here.
Notes:
1. Quilliam is Britain's first counter-extremism think tank. It is an independent organization and believes in political representation as citizens through Parliament, not separatist community groupings.
Flex Fuel Vehicles Hold the Key
April 15th, 2010 - 12:03pm
Filed under Economy
Oil drilling, conservation measure not enough to address America's energy security challenge
Two policy announcements last week revealed the Obama administration's core strategy in addressing the nation's growing dependence on oil. On Wednesday, President Barack Obama announced that his administration would allow new oil exploration along the Atlantic Coast and in the eastern Gulf of Mexico. The following day, the administration announced new mandatory fuel efficiency standards of 35.5 mpg average within six years, up nearly 10 mpg from now.
By simultaneously promoting supply-side solutions (drill baby, drill) and demand-side solutions like increased efficiency, Mr. Obama is throwing bones to the two camps that for decades have dominated the nation's energy debate. This may be smart politics, but when it comes to effectiveness - though there is nothing wrong fundamentally with either efficiency or drilling - both policies will do very little to address America's energy security challenge, as they fail to address the root of the problem: oil's virtual monopoly over transportation fuel (only 2 percent of U.S. oil demand is due to electricity generation).
Last year, the U.S. Energy Information Administration (EIA) estimated that opening the Outer Continental Shelf to exploration would affect oil prices by 11 cents per barrel by 2020, which would translate to less than a penny per gallon. On the flip side, going on an efficiency diet would not even offset the growth in demand due to natural growth.
Furthermore, consider OPEC's response. The history of the past 30 years shows that when non-OPEC producers increase their production, OPEC responds with production cuts, essentially keeping the same amount of oil in the market. Conversely, when we use less due to higher gasoline taxes, stricter fuel efficiency standards or simply in response to a hike in gasoline prices, as was the case in 2008, OPEC, again, cuts its production. In other words: when we drill more, OPEC drills less; when we use less, OPEC drills less.
While both drilling and efficiency promise little relief, with growing instability in the Middle East and millions of Chinese and Indians moving from bicycles to cars, it is almost a given that we will face further painful oil crises as the decade progresses. Contrary to popular belief, our oil dependence problem is not a function of the amount of oil we consume or import (we don't care how many bananas we consume or how many computers we import) but about the fact that oil is a strategic commodity second to none. More than 95 percent of transportation energy is petroleum based. Therefore, solutions that perpetuate the petroleum standard rather than producing new vehicles in a way that enables fuel competition are vastly insufficient.
A transformational approach is needed. Until the 19th Century, salt had a position similar to that of oil today because it was the only means of preserving food. Salt-rich countries had inordinate power on the world stage. Wars were fought over salt. Today, salt is still a useful commodity for a range of purposes. We import much of our salt, but canning, electricity and refrigeration decisively ended its monopoly over food preservation, diminishing its strategic importance.
To truly address our oil dependence problem, we must do to oil what humanity did to salt: turn it into just another commodity. The cheapest and easiest technology to strip oil of its strategic status is the flex fuel vehicle. This technology, which costs less than an extra $100 per new vehicle, enables cars to run on any blend of gasoline and alcohol fuels like ethanol or methanol. Such fuels can be made cheaply from a variety of non-petroleum energy sources ranging from coal to natural gas to biomass.
In the future, technologies to produce alcohol fuels from carbon dioxide may offer an elegant way to achieve energy independence while reducing greenhouse gas emissions. If every car sold around the world was flex fueled, gasoline would have to compete at the pump against a variety of alternative fuels, and the oil barons in the Middle East would be challenged by fuels made elsewhere, including in poor countries in Africa, Latin America and South Asia.
President Obama has expressed several times his support for flex fuel vehicles. So did Secretary of Energy Steven Chu. A bipartisan bill, the Open Fuel Standard Act, which requires that 50 percent of new cars be flex fuel by 2012, was introduced before both the House and the Senate. Now that Mr. Obama has satisfied the wishes of both drillers and dieters, its time for him to focus on the third leg of the stool and ask Congress to enable Americans what they need and deserve most - fuel choice at the pump.
Gal Luft is executive director of the Institute for the Analysis of Global Security. He is co-author of "Turning Oil into Salt: Energy Independence through Fuel Choice." His e-mail is luft@iags.org. - Baltimore Sun