Why Are There Tariffs?

Back in the days before Model Ts and gramaphones most federal tax receipts were gathered from tariffs on imports.This article explains how the process actually worked. Until 1913 there was no income tax in the US, federal income came from tariffs and excise taxes. Consequently, the federal government was a much smaller part of the economy.

Nobody looks at tariffs as a federal revenue enhancement now. Income from tariffs is meaningless in the US budget. Tariffs are rather meant to "level the playing field" between international sellers of goods that have different production costs or enjoy state subsidies. In the case of many Chinese imports to the US, the Chinese advantage in lower labor costs and government subsidies supposedly gives their sellers an advantage over their US competition. Tariffs on various products are meant to hobble the Chinese to the extent that the American counterparts to these products will have a an advantage in price.

This brings up some interesting questions. First, and perhaps most important, as a free person shouldn't an American have the right to spend his money on anything he wants at whatever price he can negotiate? Where does the government get off telling a consumer that he must pay more for a Korean washing machine because the Whirlpool Corporation is having trouble turning a profit?

Second, US trade negotiators decry the subsidies foreign governments give their own producers. This while American farmers are subsidized perhaps as much as any on earth.

Some economists have brought up the thought: "What would happen if the Chinese or the EU members or the Mexicans simply gave the products in question to Americans?" Well, we don't need to speculate. It has happened.

In 1886, the French people gifted the Americans with a copper-clad statue now known as "The Statue of Liberty". In many ways it has become symbolic of the country itself and is recognized everywhere as an American icon.
 


The statue was designed by French sculptor Frédéric Auguste Bartholdi and built by Gustave Eiffel, the same Frenchman that built the lacy steel tower in Paris. It wasn't an American project.

The point is that there were surely American sculptors and engineers capable of producing a similar or even better representation of lady liberty than these two croissant munching bell epoque poseurs. If the US really needed a giant green lady to welcome voyagers to New York harbor, someone from the local artistic community could have been hired, and paid, to produce it. Since it was a gift and supplied for free no Americans benefited financially.
 

The country didn't need the French to finance Mount Rushmore. The federal government paid for it and American sculptor Gutzon Borglum blasted away the rock that hid the faces of four American heroes.


Texas State Fair attendees are welcomed by Big Tex, a world famous sculpture, purchased in its original form for $750. The lofty fellow has gone through many changes through the years, not all good.

 

An electrical fire in 2012, on Big Tex's 60th birthday, destroyed the guy, but the Texans brought him back to life for the fair the following year. Didn't need any Frenchmen, or Chinese, to do it, either.
 
 
Legendary lumberjack Paul Bunyan, together with his monster blue ox Babe, greet fishermen and hunters on their way to the Minnesota north country. They're an American product, not an import.

Big Waters Classic Southside Sprint 2018

The Chicago Avenue-48th St. neighborhood of south Minneapolis, seemingly in a state of transition, was the site of a much-reduced local road cycling scene on July 22 as it hosted the annual Southside Sprint. There were large, competitive fields in all classes and fine weather conditions for the urban race that circled the business district and determined the state criterium champions.

 Melissa Dahlmann and father. It was the second consecutive womens' state criterium championship for Melissa.  A week later she became the women's 1-2 state road racing champion as well.

Jennifer Hale crosses the line first in the womens' 1-2 race to collect a $408 crowd prime.

Category 3 rider Risa Hustad took a break from her track riding to get a podium spot on the road.

Number One Gopher To Step Down

According to the Minnesota Daily, now a bi-weekly publication of the University of Minnesota, UofM president Eric Kaler will abdicate his position in a year, effective July 1, 2019.

Easton Green photo

Kaler, who has held this position since 2011, says he is giving the university ample time to select a new leader. As did his predecessor, Robert Bruininks, he will return to teaching, in his case, as faculty member in the Department of Chemical Engineering and Material Science.

Several things seem very likely in the future of the Gopher administration. First of all, the search for a new president will of course be limited to candidates with an extensive academic background. The successful candidate will not only meet the requirements of the Board of Regents but will also satisfy the semi-adolescents whose political and social priorities outrank their educational needs.  There's also the need for an attractive new building to bear the retired president's name, as was the reward for all the previous presidents. 

Sugar Prices, the Cost of Protectionism

This WaPo article gives a cursory description of the economic malady that is US sugar prices. Americans currently pay more than three times the world price for sugar so North Dakota and Minnesota Red River Valley beet farmers can buy new diesel 4x4 crew cab pick-ups every year.

Effective today:

The price US producers receive for raw sugar:                24.59 cents/lb

US price for refined sugar:                                                  36.00 cents/lb

US retail price for sugar:                                                     61.70 cents/lb


World market price for sugar                                 11.11 cents/lb

At the same time, there's a world-wide glut of sugar. According to the United Nations FAO, sugar production this year will reach a record 187.6 million tonnes, an 11.1% increase.

Researchers at Iowa State University speculate that the U.S. sugar program decreases consumer welfare by as much as $2.9 to $3.5 billion each year. More information is available here.

The point is that trade protectionism does more harm to the country imposing restrictions than it does to its economic adversaries.

Records Are Dangerous: When Paris Went Dark

We may have mentioned in the past that the records of a government, or a business, aren't guaranteed to remain in the correct hands forever. That's why records of any kind are dangerous. This passage from Ronald C. Rosbottom's 2014 book, When Paris Went Dark, The City of Light Under German Occupation, 1940-1944 illustrates why.
_____________________________________

Langeron (Paris chief of police, Roger Langeron) surmised that his guest must be from the Gestapo. Sitting down at his desk, the chief watched as the smug bureaucrat, whom he had left standing, grew more and more agitated at this lack of respect. Finally the German sat down and asked if Langeron still believed himself to be under the orders of that "Jew Mandel." The man added, "We know you are anti-German, Monsieur Langeron." Earlier, in September of 1939, when the German diplomatic delegation was leaving Paris for Berlin at the beginning of hostilities, the head of the legation had offered his hand to the Parisian police chief, who had refused to take it. That minor sign of resistance had been noted in the Gestapo's files. Langeron was amused at the pettiness of his new bosses, but then the German asked a much more serious question: "Where are the police files?" Langeron wrote that his heart beat faster with pleasure, for he had outsmarted this pompous secret policeman and his cohort. A few days before, the French police had loaded onto two barges, docked at the Quai des Orfevres, right alongside the Prefecture, a large consignment of the police files; on one boat were those of foreigners, on another those dealing with delicate matters of espionage and politics. The barges had proceeded downstream, loaded with explosives in case of capture. He told the agent that the police files had been evacuated with other official dossiers when the government decamped to Tours and Bourdeaux, and he had no idea of their whereabouts. Red-faced and blustering, the agent demanded to see Langeron's department heads. Brought in, they repeated the same story. When the German official left, in more than a huff, Langeron was quite delighted at his initial effort at resistance but also sadly aware that the tone of the Occupation would change inexorably from one of genteel accommodation to one of mutual suspicion.
______________________________________

When one government takes over another, they want the records. They want to know what the previous government knew. In the case of occupied France, these records were recorded in paper files, which could be hidden, transferred or ultimately destroyed. This won't be the case with records stored on multiple servers and hard drives and cloud services. There will be no hiding or destroying them.

Alaskan Brown Bear Kills Hiker

For the sixth time in the last 10 years an Alaskan human has been murdered by an Alaskan bear. Not only that, presumably this same bear attacked another person later before escaping back into the  wild.

Serious efforts are being made to capture and kill this bear and when this happens DNA analysis will be made to make sure that the correct bear has been given the death penalty. If it's not the guilty party, the search will continue until the real malefactor is found.

The area in which this event took place is a populated enclave within the limits of Chugach State Park. This brings to mind a question: What, in reality, is the purpose of a park? Is a park meant to be a place where humans can experience nature? Or is it a place where nature, or someone's concept of nature, can be preserved?

********************************************

Mission Statement

"The Division of Parks and Outdoor Recreation provides outdoor recreation opportunities and conserves and interprets natural, cultural, and historic resources for the use, enjoyment, and welfare of the people."

********************************************

Enjoyment and welfare of the people probably doesn't include being killed and/or eaten by Ursus arctos. However, Mr. Bear is a legitimate part of the natural scene and has been for some time. Unlike some genuine invasive species, he was in the area long before the white man, an invasive species himself, arrived.

Regardless, the death of one man at the paws of a bear won't mean that all bears will be hunted down and killed. Only the one that had the audacity to ignore humankind's strictures against murder will be subject to justice. Other bears, who know better or are fearful enough of their human overlords, will continue to be protected, as they are everywhere in Alaska, except when they pose a danger to homo sapiens. 

July 19 update:  Three brown bears were killed in the Eagle River, Alaska area where one man had been mauled to death and another injured  on June 20th. DNA analysis has revealed that these bears had nothing to do with the attack and the guilty bear is still roaming around south central Alaska somewhere.

 

 

Solar Power

The world has been enthusiastic for some time about solar power. And what brand of solar power could be more easily adopted than one that's been around forever?

Practical as it might be, however, the use of clotheslines is approaching extinction in America. Whatever the reasons for this logical oddity, and there are some, it's a mockery of any pretense of  energy efficiency. Even so, there are enough clothes dryer Luddites that 19 states forbid the enactment of anti-clothesline regulations by subordinate municipalities, home owners associations and other private groups. The situation is explored to some extent in this article from 2009.

Legal issues aside, why would anyone with the combination of available space and awareness of energy facts be opposed to clothes on a line? Especially when the clothes and line occupy the property of someone else?  The answer to this could be termed "visual pollution syndrome".

The sun not only ultimately provides the power for everything on earth, it also allows animals with eyes to see those things. VPS is the affliction that viewers of things that they don't like suffer when they gaze upon these visual outrages. Clothes lines are just one of the many visual externalities that cause VPS trauma.

A common trigger for VPS is an automobile junkyard, or salvage yard. These are required to be surrounded with view-proof fencing almost everywhere. But what is really the difference between an auto salvage yard and, for instance, long term airport parking? OK, the airport facility is usually paved, the junkyard is infested with plants that gardeners call weeds. That's really the only difference. The same people that hire others to mow their lawns or even actually do it themselves in what amounts to a religious experience, suffer from VPS when driving by a gathering of 30 year-old products of well-paid Detroit design teams. Why should they care?

In fact, now even currently operating motor vehicles are deemed VPS offensive. The parking ramp pictured above has screening installed specifically to avoid offending VPS victims.  It may also have the ancillary purpose of preventing those that cannot find their car from flinging themselves from the ramp in suicidal frustration. It's noteworthy that no one will mistake this multi-level parking lot for an art museum or a local headquarters of the FBI. Everyone that looks at it will quickly realize that it's a parking ramp. But for someone it was important to provide it with an ineffective disguise.

Significantly, but perhaps not primarily, is lobbying by businesses opposed to clotheslines. These would be laundromats. If every person without a dryer hung their wet clothes on a line, laundromat receipts would be cut in half. There's no doubt that lobbying by laundromat interests have in some cases had an effect on the adoption of anti-clothesline regulations.

Another aspect of the issue is psychological. Part of the reason people use clothes driers is because it requires physical effort to pull wet clothes from the washer, lug them outdoors and hang them on the line. Later they must be retrieved. While this is a negligible amount of effort, it is an inconvenience in a society devoted to the elimination of inconvenience. People possessing any amount of critical thought know that use of a dryer instead of clothesline is evidence of two things. One is a positive, affluence. No clothes on a line equals a family above poverty. The second is a negative, laziness. If a single family in an area was the only one with a dryer it would signal affluence but it would also raise the specter of laziness. Far better to forbid wet clothes on a line for everyone than be thought of as lazy.

The ultimate objection justifying VPS, including residential clothes lines. is, of course, economic, the most important objection to almost anything. In this case it would be that hanging clothes on a line in a yard lowers the value of neighboring property. As if, somehow, it's one owner's obligation to insure that a piece of nearby real estate owned by someone else always increases in value.

Retailing in the US

From the Wall Street Journal:

     Retail landlords also have suffered from a glut of new shoppng centers that were built in the years leading up to the 2008 financial crisis. For every person in the U.S., there are 24 square feet of retail space, far more than Canada's 16 square feet per capita, Australia's 11 square feet and 5 square feet in the U.K.