A scathingly brilliant article. But nothing as damaging as what Bush himself said about the protectionism.
"We're a free-trading nation, and in order to remain a free-trading nation, we must enforce the law. And that's exactly what I did. I decided that imports were severely affecting our industry, an important industry, in a negative impact, and therefore provide temporary relief so that the industry could restructure itself."
...
*speechless*
We still see lots of special-interest trade protectionism, and a lot of it is dangerous. Consider the tire tariff levied against China. Protecting the interests of auto-workers of course, because they have a powerful union and because now that the government has gone so far in on protecting the auto industry that an uncompetitive edge could spell absolute doom. Wasted money much? It's ok, I wasn't using the money you stole as taxes.
So, how much trade is protected nowadays? Well, here's a link to the Harmonized Tax Schedule the United States government uses. This one is supposed to take effect since January 1, 2010.
Check out the top one just so you get an idea, but below is a specific chapter-by-chapter reference. The different kinds of goods are divided by chapter. There are 99 different chapters. They vary in length based on content. The first chapter, for example, was only six pages. The steel chapter is 40. The chapter on how to interpret the data has 646 pages.
Oh and just for grins, my favorite has to be Chapter 84, which is import tariffs on Nuclear Reactors. So many questions...soooooo many questions. The fun begins on page 9.
Free trade, huh? Now, to be fair, not every item listed in these schedules have tariffs on them. Your best bet is to open them up and check for yourself.
Head spinning yet? Oh, it gets sooooooo much better.
So, check this shit out. You might have opened up one of these chapters by now and looked at one of the charts and maybe got kinda confused about them, as there seem to be 3 import schedule sub-sections, two of which seemed kinda squished together (the General and Special import schedule). But that 646-page explanation does seem daunting doesn't it? Never fear, beloved reader! I've gone ahead and picked out what you needed to know, starting with the basics. Here's the link if you wanna see it yourself. Best read side by side with a chart so you understand what's going on. If you haven't opened up a chapter yet, I recommend you do so now and go past the initial introduction to each set of goods and move on to the real charts.
"Rates of Duty.
The rates of duty in the "Rates of Duty" columns designated 1 ("General" and "Special") and 2 of the tariff schedule apply to goods imported into the customs territory of the United States as hereinafter provided in this note:
(a) Rate of Duty Column 1.
(i) Except as provided in subparagraph (iv) of this paragraph, the rates of duty in column 1 are rates which are applicable to all products other than those of countries enumerated in paragraph (b) of this note. Column 1 is divided into two subcolumns, "General" and "Special", which are applicable as provided below.
(ii) The "General" subcolumn sets forth the general or normal trade relations (NTR) rates which are applicable to products of those countries described in subparagraph (i) above which are not entitled to special tariff treatment as set forth below.
(iii) The "Special" subcolumn reflects rates of duty under one or more special tariff treatment programs described in paragraph (c) of this note and identified in parentheses immediately following the duty rate specified in such subcolumn. These rates apply to those products which are properly classified under a provision for which a special rate is indicated and for which all of the legal requirements for eligibility for such program or programs have been met. Where a product is eligible for special treatment under more than one program, the lowest rate of duty provided for any applicable program shall be imposed. Where no special rate of duty is provided for a provision, or where the country from which a product otherwise eligible for special treatment was imported is not designated as a beneficiary country under a program appearing with the appropriate provision, the rates of duty in the "General" subcolumn of column 1 shall apply."
In case you were wondering what constitutes special treatment for tariffs under the "Special" column, taken from page 6, sub-section (c)
"(c) Products Eligible for Special Tariff Treatment.
(i) Programs under which special tariff treatment may be provided, and the corresponding symbols for such programs as they are indicated in the "Special" subcolumn, are as follows:
Generalized System of Preferences...A, A* or A+
United States-Australia Free Trade Agreement...AU
Automotive Products Trade Act...B
United States-Bahrain Free Trade Agreement Implementation Act...BH
Agreement on Trade in Civil Aircraft...C
North American Free Trade Agreement:
Goods of Canada, under the terms of
general note 12 to this schedule...CA
Goods of Mexico, under the terms of
general note 12 to this schedule...MX
United States-Chile Free Trade Agreement...CL
African Growth and Opportunity Act...D
Caribbean Basin Economic Recovery Act...E or E*
United States-Israel Free Trade Area...IL
Andean Trade Preference Act or
Andean Trade Promotion and Drug Eradication Act...J, J* or J+
United States-Jordan Free Trade Area Implementation Act...JO
Agreement on Trade in Pharmaceutical Products...K
Dominican Republic-Central America-United States
Free Trade Agreement Implementation Act...P or P+
Uruguay Round Concessions on Intermediate
Chemicals for Dyes...L
United States-Caribbean Basin Trade Partnership Act...R
United States-Morocco Free Trade Agreement Implementation Act...MA
United States-Singapore Free Trade Agreement...SG
United States-Oman Free Trade Agreement Implementation Act...OM
United States-Peru Trade Promotion Agreement Implementation Act...PE"
That's the explanation for the first two columns. What's sad is that there's a Hell of a lot more involved. There's exceptions for goods produced exclusively in the West Bank region. The explanation of the first two columns contains almost 3 pages of exceptions and special cases, starting on page 3 of the document and ending on page 6.
So what's the story behind "Column 2," the one with significantly more tariffs in them than the others, not covered under "General" or "Special" rates? Also taken from the intro report.
"Rate of Duty Column 2. Notwithstanding any of the foregoing provisions of this note, the rates of duty shown in column 2 shall apply to products, whether imported directly or indirectly, of the following countries and areas pursuant to section 401 of the Tariff Classification Act of 1962, to section 231 or 257(e)(2) of the Trade Expansion Act of 1962, to section 404(a) of the Trade Act of 1974 or to any other applicable section of law, or to action taken by the President thereunder:
Cuba
North Korea"
North Korea"
Fucking awesome. Page 6 if you wanna see for yourself.
I haven't even begun to cover special interests. It could take months to sort some of these out and see what's going on in terms of voting blocks and special interests. And this is just import tariff schedules. What about price guarantees, subsidies, and other such wonderful measures?
Glad you asked! Carry on good reader.
Here's a beautiful article on corporate welfare, or government investment in private corporations written by Time Magazine.
Specifically, I'd like to draw your attention a certain organization mentioned in this article known as the "Export-Import Bank of the United States," a Federally-funded organization whose job is to provide American businesses who export regularly to other countries with loans. Though the financial report for 2009 (link provided below) seems to promote their assistance to "small" businesses, there's more than enough assistance going to major corporations. The bottom of page one gives an overview of the funding received by small businesses in America.
In fact (and feel free to check the numbers yourself), 4.3 billion were given to "small businesses" through insurance and loan-grants. Great, helping the little guy, woohoo...Oh, but wait! Compared to the grand total of 21 billion offered in total as aid, doesn't that mean 16-17 billion were given to businesses who don't qualify as small? Who would that consist of?
But wait, I know I've been keeping with the trend of using direct sources, and the last few were just that! That's fine, I'll just substantiate them with evidence! Because perhaps the most single-handedly ridiculous, outrageous bit of information you can dig up from these financial reports is the obscene amounts of money that is being loaned to just Boeing. Oh and just to make things annoying you can't actually find Boeing on the stupid state list. I've checked. Yes, that's it, they actually don't include Boeing in the map based on their corporate head quarters. Gods only know where they actually put it because they don't want you to know. My best guess is Alaksa. No one would ever suspect. But the financial reports tell something amazing.
If you look at the second set of charts starting on page 6. Here, the chart structure is a bit archaic and esoteric, probably to hide and convolute the prices. But I figured out how to read it. Best bet is to open up the chart to page six and read along while I explain. Basically each country has a set of buyers, whose name is included in their country subgroup. The buyer is the name on top in each purchase. So on page six under the Australia purchase, the first and only purchase was made by Virgin Blue International Airlines. Under the name of the purchaser is the American company who sold the goods. In the case of this Australian purchase, it's Boeing. The loans and guarantees are the two methods by which Ex-Im provided financial assistance to the American company who is exporting. Interest rates are included next to the loans. In this case, Ex-Im provided financial support equal to $376,552, 551 in guarantees. But if you think that's a lot, try page seven, where Boeing gets two-fucking-billion dollars in pure financial assistance for just ONE of the TWO sales they made in India. Oh and that's just one country. Consider for the fact that every single dollar that went to aid in the countries of Ireland, Israel, Japan, the Netherlands, Morocco, Kuwait, Norway, Panama, Singapore, and the United Arab Emirates WAS ENTIRELY TO BOEING.
Of course, there are other major companies that benefit from Ex-Im's corporate favoritism. And this is just the Ex-Im.
Free America huh?
And the sad part is, this is only a fragment of what I've unearthed. All of this? These are just the absolute facts I found with two and a half hours of intense reading and research and have concrete, indisputable proof. I literally went out of my way to make sure that I could source the government so no one could argue about these sources. All of them are legitimate, reported by the government itself. They cannot be argued. But there's so much more. I've read stories from countless newspapers about how Boeing gets its support because its in an egregious artificial price war with Airbus, who are getting every bit as much funding from the EU to compete against them. But I don't have data on that yet. I hope to, because if I can substantiate those claims at all, then there can be no defense against the claim that government is a cancer. This ridiculous overseas dick-measuring one-up-man-ship is ripping money out of tax payers for something that no one benefits from. These export-import-tariff wars aren't producing more goods, they aren't helping make goods available for citizens more easily, they aren't dropping prices, and they aren't providing more innovative technology because of all of this. The governments prop themselves up and win for the "European Way" or the "American Way."
And the sad part is, this is only a fragment of what I've unearthed. All of this? These are just the absolute facts I found with two and a half hours of intense reading and research and have concrete, indisputable proof. I literally went out of my way to make sure that I could source the government so no one could argue about these sources. All of them are legitimate, reported by the government itself. They cannot be argued. But there's so much more. I've read stories from countless newspapers about how Boeing gets its support because its in an egregious artificial price war with Airbus, who are getting every bit as much funding from the EU to compete against them. But I don't have data on that yet. I hope to, because if I can substantiate those claims at all, then there can be no defense against the claim that government is a cancer. This ridiculous overseas dick-measuring one-up-man-ship is ripping money out of tax payers for something that no one benefits from. These export-import-tariff wars aren't producing more goods, they aren't helping make goods available for citizens more easily, they aren't dropping prices, and they aren't providing more innovative technology because of all of this. The governments prop themselves up and win for the "European Way" or the "American Way."
Oh and I'm not done here. Corporate welfare is nuts and I have every intention of doing even more research on this. I will explore the Airbus mystery and see if there's any truth to those claims. I will learn about other subsidiary programs and post them in due time. This was the fruit of one night, one three-hour-block of research that I started out of the blue with no starting point except a mention of a policy in a text book. And I've got the rest of my natural born life.
Wow. Just..... Wow. This is one of the most ridiculous things I have ever heard. Who in Washington could have possibly thought this would be a good idea? Is lacking an understanding of basic economic theory a requirement to run for office?
ReplyDeleteAfter reading that, I find this article a tad bit humorous:
ReplyDeletehttp://www.nytimes.com/2010/02/18/us/politics/18obama.html?ref=politics
Compared to all this stuff you wrote about, the stimulus package sounds like frugal spending....
This was a very well-written and researched piece! I like it a lot. Its disturbing, as it should be.
ReplyDeleteAnd I agree Omega. People bitch about the stimulus, about the costs of health care reform (don't even get me started there)... but holy shit, none of that compares to the shit we do every day.
I found it gets even worse. It took me less than five minutes to find examples in the Ex-Im lists of pure special-interests spending, which I'll post in an add-on soon enough (when I don't have class and a test to study for).
ReplyDeleteIt's an interesting article, especially how many representatives claimed stimulus money and still acted loudly against it. I wish I had enough free time to look into the Obama stimulus package, because I have my personal doubts about how effective it is, but I agree its sickening that we spend this much money on adverse-affecting trade-protectionism, especially how much of it is special-interest, and then complain about how expensive certain measures can be.