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Archive for November, 2014

Trickle-Down Blame

Recently a friend offered the following brilliant bit of political theory: “the lower classes are natural Democrats, the productive classes natural Republicans, and the upper classes uniformly bolshevik”.

Translation: If you’re a productive, hard-working, red-blooded American who feels put upon by financial pressures and seemingly unfair circumstances, it’s big government, lazy welfare slobs, unions, liberals, and pointy-headed intellectuals who are to blame.  Pay no attention to the people who took all the money. Look down the ladder, those are the people to hate.

It’s a bit of misdirection and deception that Houdini himself would envy.  The people who took all the money have somehow managed to convince their victims to blame each other.  Pay no attention to the people who took all the money!

The rich and powerful 1% are very pleased, thank you very much, that the so many of the 99% are distracted by the sideshow of left vs right, that shopkeepers and petty professionals are pitted against the working poor.  If Faux News and MSNBC can keep you distracted with red states, blue states, liberal-bashing, gay-bashing, etc., you will fail to notice that the system has been rigged for someone else’s benefit.

When times are tough, the question is always, cui bono – who benefits?  In today’s politics, it’s all too obvious.

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After You!

you-go-firstAfter you.  No, after you.  But I insist, after you.  Thus goes the greenhouse pollution debate.  No country, rich or poor, wants to go first when it comes to reducing its load on the environment.

What’s beyond dispute is that all must step through that door, and sooner rather than later.  But how?

Perhaps the WTO is the place to start.  WTO rules allow countries to impose their own national treatment on imports from other countries.  The U.S. could, for example, charge a fee on the carbon pollution content of domestic goods and imports.  Although this should put to rest the argument that a country would harm itself in world trade by imposing domestic pollution fees, it hasn’t.  Fear and resistance persist.  And the country that goes first can only drag along other countries to the extent they export; foreign domestic activity still gets a free pass to pollute.

What WTO rules don’t allow, but could allow, is for countries to go beyond so-called National Treatment in imposing environmental restrictions.  This is the place to start.

I propose an Environmental Commons Incentive, allowing any WTO member to impose a greenhouse pollution tariff on imports that can be slightly higher than domestic goods.  A member with no domestic carbon pollution rule could impose a tariff of up to 0.5% of the value of imports weighted by carbon content, as a special exemption to the National Treatment.  The proceeds would be paid to a special WTO environmental trust fund, and could not be retained by the importing member.

As each member adopts the incentive, an increasing portion of world trade would have to pay to pollute, no more free ride, at least in international trade, and there would be a powerful economic incentive to reduce pollution.  No nation would have to go first or go it alone.

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