Dumping on (anti-)Dumping

US anti-dumping laws transfer income from American consumers to American producers. Of course it's rarely stated that way. Generally it's alleged to protect American jobs.  At least one of our current presidential candidates is pushing tariffs as job-savers.

The WSJ gives a great example, the case of the US wooden furniture manufacturers. They sued China for dumping in 2002 and in 2004 they won, receiving both hundreds of millions of dollars in payments from China (thanks Byrd Amendment!!) and tariff relief.

Wow, isn't that great for American workers?

Well.......

Stanley Furniture Co., in High Point, N.C., received the biggest payout, $83.5 million, and says it used the money to invest heavily in a new line of domestically produced children’ furniture. But made-in-America wasn’t enough of a draw, said Stanley’s chief executive, Glenn Prillaman, who shut down the line in 2014. In 2015, Stanley’s U.S. employment fell to 71, down from 2,600 in 2005.

“The money allowed us to fight that fight on the scale that we fought for as long as we did,” he said. But “the consumer wasn’t willing to look past short-term gains of getting something for less” and continued to prefer imports.


In other words even with the tariff protection and $83.5 million of cash, the company continued to be so inefficient that they more or less went under.

Then there's the case of the company who spearheaded the suit:

As for Mr. Bassett, he says the $54.4 million in Byrd amendment money his Vaughan-Bassett Furniture Co. received financed factory modernization. Now, the outlook for the Galax, Va., firm “has never been brighter in 15 years,” said Mr. Bassett, the firm’s chairman. In part that’s because Vaughan-Bassett is making solid wood furniture, which is becoming increasingly trendy.

Even so, he said, Vaughan-Bassett’s employment of 560 is down by about half from 1,200 in 2005 when the company started receiving Byrd amendment money. Employment is even down from 700 workers in 2009, during the depth of the housing collapse. The new computerized machinery Vaughn-Bassett bought requires fewer workers, he said.

In other words, he took his dumping money and automated production while dumping his workers!

Now Bassett was smart and Stanley was dumb, so kudos to Bassett for making a smart business move.  But should US consumers have to pay for Stanley to automate their production?

So if price protection and millions of dollars won't protect American jobs either because of a poorly run company or a decision to automate, what to do?

My own view is to acknowledge that the unintended consequences of anti-dumping make it impractical as a job protection device.

If the Chinese government wants to subsidize Americans' purchases of furniture, so be it.

 Let's use something like a Universal Basic Income to deal with job displacement. Let's subsidize worker mobility so that furniture workers out of a job can move to a more dynamic sector of the economy possibly in another area of the country. Let's stop subsidizing home ownership, which when prices fall (which they will do again people!), people aren't "stuck" in a jobless geographic area.

But handing US taxpayer money to manufacturers who are going to squander it or do things the government doesn't want is a bad option. Maybe the government should also mandate what the companies getting relief must do with the money? Yes, that's the ticket. What could possibly go wrong?

Can This Be True?

A quiz:  Is the following letter real, or is it a fictional mock-up based on Ayn Rand's ATLAS SHRUGGED?


Dear [pobrecito chingado]

I am writing to request that your company voluntarily divest from any investments it may have in thermal coal. 

Specifically, I am asking that you refrain from making any new investments, refrain from renewing any existing investments, and to sell or withdraw from existing investments, in any company that generates thirty-percent or more of its revenue from the mining or use of thermal coal. 

 My decision to ask you to divest from thermal coal arises from my statutory responsibility to make sure that insurance companies address potential financial risks in the reserves they hold to pay future claims. As utilities decrease their use of coal and other carbon fuel sources, as states like California limit the ability of the private sector to use burn coal and other carbon fuels for power generation and require their pension funds to divest from coal, as states like California and the United States impose more stringent air quality requirements which limit the ability to burn coal and other carbon fuels, and as nations across the world begin to implement the commitments they made to reduce their use of carbon at the recent United Nations COP21 Climate Summit in Paris, investments in coal and the carbon economy run the risk of becoming a "stranded asset" of diminishing value. 

The movement away from coal and the rest of the carbon economy poses a potential financial risk to insurance companies investing in coal and the carbon economy. The potential risk of continuing such investments is that they lose value over time or that they lose value quickly. In either case, such investments pose a potential financial risk to those who invest in them. At some point nations and states may dramatically restrict the burning of carbon. At that point, investments in coal mines, in oil and gas wells, in companies that extract coal, oil or natural gas, in companies that transport coal, oil and gas, in utilities that rely on coal, oil or gas, among others, could drop dramatically in value. 

Before that happens it is important for insurance companies and insurance regulators to understand the scope of these investments by insurance companies and to take steps to mitigate potential financial risks. Divestment from thermal coal in particular will help protect insurance companies from holding an investment currently dropping in value, and which is likely to suffer substantial additional decline in value during a transition to a reduced carbon economy, and run the risk of becoming a "stranded asset." California is decarbonizing its economy and transitioning to clean, pollution free energy resources. Utilities have been required by law to dramatically reduce their reliance on carbon. California's cap and trade program also results in raising the cost of carbon and reducing its use. Two of the world's largest pension funds - CalSTRS and CalPERS - have been required by the state legislature to divest their thermal coal investments by July 2017. 

A number of insurance companies have already recognized the risks of continued investment in thermal coal. Allianz announced that it would decrease investments in companies using coal and boost funding in those focused on wind power. Similarly, Axa announced last year that it will remove from its portfolio, and refrain from future investment in, companies that derive more than half of their income from coal mining, including electrical utilities that derive more than half of their energy from thermal coal plants. I appreciate your consideration of my request that you, and all insurance companies licensed to write insurance in California, divest from thermal coal investments. 

Your response to this request would be appreciated by February, 24, 2016. Please respond by email or letter to me, sent to Shannon Heinzer at Shannon.Heinzer@insurance.ca.gov to indicate whether you will be complying with my request. The Department of Insurance will make public the names of those companies who commit to voluntarily divest from thermal coal and those which do not. I recognize that it may be challenging to immediately eliminate all of your existing thermal coal investments, but I strongly encourage you to make a commitment to move in this direction. If you have any questions about this request, please contact my Deputy Commissioner & Special Counsel, Geoffrey Margolis, at 300 Capitol Mall, 17th Floor, Sacramento, CA 95814, Geoff.Margolis@insurance.ca.gov (916) 492-3574. 

Sincerely, DAVE JONES Insurance Commissioner 

Nope, wrong.  It's a real letter.  Wow.  A requirement that they "voluntarily" divest.  Orwell is smiling grimly, somewhere.

Love Gov: The Series

Here's the first installment of the quite funny, yet disturbingly creepy, "Love Gov" series from the Independent Institute:




You can find the rest of the them here.  Worth watching them all. 
Premise:  clever. 
Execution:  so accurate that it's a little uncomfortable.

Corruption: "Based on my training and experience, I'm going to steal your money"

The real problem with corruption in the U.S. is not at the margins, with bad cops taking bribes outside the law..

It's right at the center of government itself, with agencies using bad rules to take property overtly and using the court system for cover.

This CAF ("civil asset forfeiture") story is remarkable precisely because something like it happens every day.  Or, almost twice a day, because as the story notes there more than 600 CAFs in 2012.

Excerpt:

ARNOLDS PARK, Iowa — For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.

The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report. “How can this happen?” Ms. Hinders said in a recent interview. “Who takes your money before they prove that you’ve done anything wrong with it?”

The federal government does.

Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up....

There is nothing illegal about depositing less than $10,000 cash unless it is done specifically to evade the reporting requirement. But often a mere bank statement is enough for investigators to obtain a seizure warrant. In one Long Island case, the police submitted almost a year’s worth of daily deposits by a business, ranging from $5,550 to $9,910. The officer wrote in his warrant affidavit that based on his training and experience, the pattern “is consistent with structuring.” The government seized $447,000 from the business, a cash-intensive candy and cigarette distributor that has been run by one family for 27 years.

If It Bleeds, It Leads

Interesting.  We are not really interested in helping people we could help.  We direct aid based on many people have already died.  Tell me again how government is "rational"?

The Number of Fatalities Drives Disaster Aid: Increasing Sensitivity to People in Need 

Ioannis Evangelidis & Bram Van den Bergh 
Psychological Science, November 2013, Pages 2226-2234 

Abstract: In the studies reported here, an analysis of financial donations in response to natural disasters showed that the amount of money allocated for humanitarian aid depends on the number of fatalities but not on the number of survivors who are affected by the disaster (i.e., the actual beneficiaries of the aid). On the basis of the experimental evidence, we discuss the underlying cause and provide guidelines to increase sensitivity to people in need.

Nod to Kevin Lewis, who is in fact rational.

ObamaCare Stinks for Young People

With a nod to WH:

So Cool: When HOLLYWOOD even starts hatin' on you....

Even those squishy mooks in Hollywood have decided to start hating on the federal surveillance-industrial complex.  Nicely done.  Thanks to WH.



UPDATE: This is interesting.

The Minkey Didn't Have a Lishanz....

Pelsmin has found the perfect cinematic metaphor for Obamacare.  From Pink Panther.

Price-Gouging Law in OK

So, the intrepid folks of OK state government are out on patrol.  Be warned!  If you try to sell stuff that people need, especially if they REALLY REALLY need it, you will likely be arrested.

OK Gov announces price gouging enforcement.

I wish that the OK legislature could watch this short video:

On the other hand, to be fair, it wouldn't matter.  Price-gouging laws are extremely popular among voters.  To paraphrase H.L. Mencken, voters want price justice, and it is the job of government to give it to 'em, good and hard.

With thanks to Chris Zorn...

UPDATE:  Note that the authorities are careful to muddy the waters, conflating price-gouging and fraud.  Fraud is a problem, fraud is illegal.  It is COMPLETELY different from price-gouging.

A New Mandatory "Option": An Interlock System for Alcohol

From Big Brother motors!  You'll like it.  And if you don't like it, you'll have to buy it anyway.  Even though the touchscreen monitor you ALSO have as an option is more of a danger.

Insider Trading: Grand Game "Mad-Enough-to-Spit" Edition

Wow. Wowdie wow wow. Exec thinks company has had good month. Exec posts happy note to this effect on Facebook. Regulatory thugs call this "insider trading", and prosecute.

This was not a secret note to investors.  It. was. on. Facebook.

For reasons I have never understood, "insider" trading makes lefties insane. Drvies them mad. And so on.

I actually find this argument persuasive: if we allowed insider trading, prices would be more accurate.
But you can stop well short of that view and still think it's okay to post accurate information on Facebook. I mean, IT WAS ON FACEBOOK.

Judge for yourself, friends.  That's the law.  And here is the Facebook post.  Click for an even more public and open image:

And then, go crazy, folks, go crazy.

Nod to Angry Alex.
 

Minimum Wage

The Montana Department of Employment, Division of Labor Standards got an anonymous tip that a small rancher was not paying proper wages to his help.  They immediately sent an official  agent out to investigate him.

GOVT AGENT: I need a list of your employees and how much you pay them.

RANCHER: Well, there's my hired hand who's been with me for 3 years. I pay him $350 a week plus free room and board.

GOVT AGENT:  Well, those payments and conditions are within the law.  Anybody else work here?
 
RANCHER:  Well, I wasn't going to say.  But there's also a mentally challenged guy. He works about 18 hours every day and does about 90% of all the work on the ranch. He makes about $10 per week, sometimes less.  He pays his own room and board.  I do buy him a bottle of bourbon every Saturday night so he can cope with life, but then sometimes he tries to make love to my wife.

GOVT AGENT:   Okay, yes, then THAT's the guy I heard about, and need to talk to -- the mentally challenged one.

RANCHER: That would be me.

Save the Balls!

The "save our balls" campaign from Bucky Balls.  Those little magnetic balls, you know.

Are we really going to outlaw everything in the world that's poison, or small?  If so, Harry Reid's brain will be outlawed, on both counts.

Nod to Anonyman

 

Who are the riff-makers. Who are they really?

Fascinating post by Chris Dillow on the idea of distinguishing between the "deserving" and "undeserving" poor.

Here's his thesis:

I can see why libertarians might be opposed to all welfare spending on Randian or Nozickian grounds, but I find it hard to see why they think a welfare state should try to discriminate between deserving and undeserving.

Read the piece. He makes a very good case.

And, as always, Mark E. Smith is relevant here:

They take from the medium poor
 to give to the needy poor 
Via the government poor 
Give it to the poor poor 
They're knocking on my door 
Entrance 
Entranced

Helping the private sector in Argentina

Argentina has now passed a decree allowing the government to direct both the amount and the type of investment behavior of private insurance companies. Here's the scoop from the AP (via Fox News so you KNOW it's true):


she (President Christina Kirchner)  decreed that insurance companies must invest up to 30 percent of their holdings in "productive activities" to improve Argentina's infrastructure. "This decree links the insurance industry with the development of the actual economy," said the decree published Tuesday. 

With her government redirecting resources toward "projects that have a clear productive and social purpose," insurers will "encounter new possibilities of investment that that will feed a virtuous cycle of development with social inclusion," it said. The decree, effective Wednesday, puts Deputy Economy Minister Axel Kiciloff and Commerce Secretary Guillermo Moreno in charge of a committee that will decide where the insurers can invest their holdings. 

The list begins with projects already sponsored by the nationalized pension system and other government-run funds, but also can include whatever the committee decides is "productive, according to the objectives of the political economy." 

Economy Minister Hernan Lorenzino said Argentina's insurers are sitting on $13 billion but put only $18.5 million in what the government considers productive projects. The government hopes to raise that to $1.5 billion by mid-2013. This "will be good for the national economy and for the insurance sector as well, since these investments have proven to be the best in terms of profits and security in recent years," Lorenzino said in a radio interview. 


That's right, private money decreed to go to either "infrastructure" or projects with a "clear social purpose".

Gee this sounds like a great idea. Win-Win-Win. I wonder what  other Argentine investors think?

Argentina's Merval stock market index dropped more than 3.5 percent Tuesday after Fernandez made the surprise announcements Monday night.

Uh, oh, more people making bad decisions with their money.  Sounds like La Penguina has some more work to do!

Hat Tip to NC

Not the Onion: Stupid Gun Fears Edition

Really?  The kid is DEAF.  He uses American Sign.  His name sign "looks like" he is holding his hand like a gun."  Why in the world do you idiots want to make a little deaf kid feel bad?

The parents of a 3-year-old deaf boy from Nebraska say his preschool told them he must change the way he signs his name because it looks like a finger-pistol...The family of pre-schooler Hunter Spanjer said officials at the Grand Island Public Schools told them the manner in which the boy signs his name is a violation of its “weapons in school” policy. They claim they were told Hunter had to modify the way he signs his moniker to comply with the school's zero tolerance code against weapons in school.

I have a "sign" for the nuts who have taken over our schools.  It involves the sign of me grabbing my private parts, wiggling around a lot.

Apparently, the school is now denying everything.  But the ACLU found enough cause to take up the case, on behalf of the boy.

collateral damage

So a disgruntled ex-employee waylays his former boss, puts 5 in his head and takes off. He's followed by two cops. The killer turns on the cops with gun drawn and the cops kill him.

Good work, right?

Well, what if I told you that 9 people were wounded in the second shooting, all of them by shots fired from the police, who squeezed off 16 shots in around 8 seconds?

????????

Should we be congratulating them or castigating them? My view is in the labels, tell me yours in the comments.

Linkulus maximus

1. Great long-read about the mystery monkey of Tampa and how (s)he stirred up the inner anarchist of the locals.

2. Calming the student debt crisis hype.

3. College grads face hard times.... IN CHINA!

4. Romney is as an alpha male chick magnet (funniest thing I've read this week).

CFPB: Cheers (?)

Don B raises the key point. And I don't know the answer. Don makes some good arguments. But it's not a slam dunk case.

  Here is the example. Worth reading.

 Now, the question: Suppose it is true that C is naive. One of the problems of being naive is not knowing the full extent and impact of one's naivete.

 Now, suppose that we know that there are people like D, people who take advantage of naivete. D is capable of making bright shiny things, or complicated things, that will induce C to pay more than that thing is "worth."

 Then, along comes B. B is a hand-wringer, the sort who really REALLY cares about other people. But B thinks B should get paid for caring about people, because he doesn't really care about other people THAT much, to work for free. So, B proposes we create a government agency whose job it is to protect C from being taken advantage of by D.

 Except that, to make this work, we will also have to tax A. A thinks C is an idiot, and that D is morally defective. But A would never buy D's product, and wonders why C would do it. After all, C should be able to figure it out, if he tried.

 But, there it goes: We tax A to pay B to prevent C from being exploited by D. Don asks, "Is this justified?" I think the right question is "When MIGHT it be justified." Still, Don asks a good question.

Disturbing

So, the guy needs to "serve" a code violation notice.  The woman's grass is "too long."  (Okay, that's pretty disturbing right there.  Here GRASS is too long?  Good Lord.)

He knocks.  Probably loudly.  He's REALLY fat, so he should be able to do some good knocking.

No answer.  So, because this summons is SO IMPORTANT, he goes into the house.  Walks into the woman's bedroom (she lives alone).  Announces his purpose.

Here is the video:


I have so many questions. (Below the fold)