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 Richmans' Trade and Taxes Blog



What Is the Remedy When the Supreme Court Exceeds Its Constitutional Authority? (version 2)
Raymond Richman, 7/1/2015

The Constitution of the U.S. made no provision for judicial review of federal or state legislation. Articles III, of the Constitution of the U.S. created the federal judicial system, but made no provision for declaring unconstitutional Congressional legislation or Presidential actions. In the  case of Marbury v. Madison (1803), the Supreme Court  arrogated to itself the power to declare actions of the President and the Congress and the several states unconstitutional. But the power is not unlimited. The Court has no power to legislate as it has done in cases stemming back to Pres. F. Roosevelt when the President attempted to pack the Court. It has the power to interpret laws and the constitution when there is ambiguity in the letter of the law or conflicting legislation. The President and the Congress are entitled to challenge any excessive arrogation of power.

Amendments to the Constitution have weakened the States. The U. S. constitution created a republic with the federal government having limited powers with all rights not granted to it being reserved to the states or to the people under the 10th amendment. The first of the amendments to weaken the States was the 14th amendment ratified in 1868. Section 1 recites that “no state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.” Of course, the Civil War denied the States the right to secede from the union. The 14th Amendment went further; it reduced the rights of states even those that had not attempted to secede. The Supreme Court in its making marriage between homosexuals indicates how much this amendment weakened the States, 32 of which have laws banning marriage among homosexuals. ...

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Is it 1929 again? - reposted from August 29, 2003
Howard Richman, 6/30/2015

[Note: I first posted this on this blog on August 29, 2003. With the Chinese stock market in free fall, it is becoming more and more apparent that I was correct.]

In today's Daily TelegraphAmbrose Evans-Pritchard explained why U.S. Treasury interest rates have been rising:

As Indonesia, India, Ukraine, Brazil, Turkey, Venezuela, South Africa, Russia, Thailand and Kazakhstan try to shore up their currencies, the effect is ricocheting back into the advanced world in higher borrowing costs. Even China felt compelled to sell $20bn of US Treasuries in July.

"They are running down reserves by selling US and European bonds, leading to a self-reinforcing feedback loop," said Simon Derrick from BNY Mellon.

This is very close to my June 26 analysis  (see Why US Interest Rates have been Rising since May 1). At that time, I quoted an article which said that Chinese banks were selling their U.S. Treasury bonds, due to a liquidity crunch in China. Apparently, the liquidity crunch is emerging-market wide....

 

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What Is the Remedy When the Supreme Court Exceeds Its Constitutional Authority?
Raymond Richman, 6/29/2015

The Constitution of the U.S. made no provision for judicial review of federal or state legislation. Articles III, of the Constitution of the U.S. created the federal judicial system, but made no provision for declaring unconstitutional Congressional legislation or Presidential actions. In the  case of Marbury v. Madison (1803), the Supreme Court  arrogated to itself the power to declare actions of the President and the Congress and the several states unconstitutional. But the power is not unlimited. The Court has no power to legislate as it has done in cases stemming back to Pres. F. Roosevelt when the President attempted to pack the Court. It has the power to interpret laws and the constitution when there is ambiguity in the letter of the law or conflicting legislation. The President and the Congress are entitled to challenge any excessive arrogation of power.

The U. S. constitution created a republic with the federal government having limited powers with all rights not granted to it being reserved to the states or to the people under the 10th amendment. The 14th amendment ratified in 1868 reduced states’ rights. Section 1 recites that “no state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.” Of course, the Civil War denied the States the right to secede gainst states’ rights to secede from the union. The 14th Amendment went further; it reduced the rights of states that had not attempted to secede.

The States created the Constitution and established a republic. The States and the Federal Government were not created co-equal with the States. The States retained the power to determine the members of the Senate. Until the 17 Amendment was adopted in 1913, the legislatures of the States appointed the members of the Senate. That amendment marked the end of any state control over the actions of the federal government, including the Supreme Court. ...

 

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Today is the big vote on Obamatrade -- we were published in today's American Thinker
Howard Richman, 6/23/2015

We began:

Today’s Senate cloture vote is the last and best chance for conservatives to stop Obamatrade. Just 41 Senate votes against cloture would stop it in its tracks. During previous votes, the Republican leadership had enough votes sewed up. Not this time.

Opposition has been growing. The first time Obamatrade was voted upon in the House, only 34 Republicans voted against it. The second time, 50 Republicans voted against it.

Conservatives believe in free trade. But free trade works only when it is balanced. Obamatrade enables currency manipulation, the chief method through which Japan, Malaysi,a and Vietnam, three of our Trans-Pacific Partners, give hidden subsidies to their products and charge hidden tariffs upon U.S. products so as to give their countries increasing trade surpluses and give the U.S. worsening trade deficits.

To read the rest of what we wrote, go to:

http://www.americanthinker.com/blog/2015/06/today_is_the_big_vote_on_obamatrade.html

 

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Donald Trump: When was the last time the U.S. won on a trade agreement? -- I'm published in the American Thinker blog this morning
Howard Richman, 6/19/2015

I begin:

In his speech announcing his presidential run, Donald Trump posed a question that resonates with the American people. Trump said:

Our country is in serious trouble. We don't have victories anymore. We used to have victories, but we don't have them. When was the last time anybody saw us beating, let's say, China in a trade deal? They kill us. I beat China all the time. All the time.

President Reagan was the last U.S. president who won a war. Not only did he win the Cold War, but he also beat Cuba in Grenada. Reagan may also be the last President who won in a trade deal....

Click here to read the rest.

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Trump on Trade
Frank Kirkland, 6/18/2015

Whatever one may think of newly-announced Presidential candidate Donald Trump and his positions on issues, there is no denying his acumen and success as a businessman. He clearly brings a pragmatic approach to developing business strategies and negotiating business deals. So what has he said about international trade and how the US conducts it?

Using OnTheIssues.org as a convenient source, we first see that he strongly embraces globalization and international markets. He is clearly "pro trade" (just as are most of the opponents of TPA/TPP who are unfairly characterized as being anti-trade.) But not surprisingly, the strategy and tactics reflected in his statements on trade reflect those of a goal-oriented businessman who takes positions consistent with being the CEO of "America Incorporated", not of a lifelong USTR bureaucrat. (I.e., acting just like the leaders of our trading partners already do.)

Specifically, he says trade must be "fair" as well as free and that it is now not fair...

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Donald Trump and the Currency Manipulators -- I'm published in American Thinker blog this morning
Howard Richman, 6/17/2015

I conclude:

As President, Trump would use the threat of tariffs to negotiate trade agreements that would benefit the United States. In contrast, President Obama weakly buckled to Japan’s demand that the Trans Pacific Partnership permit currency manipulation.

 To read the whole thing, go to:

http://www.americanthinker.com/blog/2015/06/donald_trump_and_the_currency_manipulators.html

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Book Review: Ha-Joon Chang, Economics, the User’s Guide (New York: Bloomsbury Press, 2014.
Raymond Richman, 6/9/2015

The author, Ha-Joon Chang, Reader in the Political Economy of Development, Faculty of Economics, University of Cambridge, states in the Prologue that this is a book without the economic jargon that makes economics appear to be more difficult than it needs to be. Economics, he writes, cannot be a science like physics or chemistry. In this regard, he fails to distinguish between economic theory and economic policy. Determining economic policies is not a science. But in theorizing about economics, economics uses scientific methodology just as the physical sciences do. The prologue is a bad beginning.  So is the first chapter which is entirely devoted to defining economics. Prof. Paul Samuelson in his introductory textbook, Economics, which was the leading bestseller in the world for many decades takes half a page and his definition, five lines, includes the essentials of all textbook definitions, economics is the study of the conditions for an efficient allocation of the world’s scarce resources among alternative uses. To Chang, economics is the study of “money, work, technology, international trade, taxes, and other things that have to do with the ways in which we produce goods and services, distribute the incomes generated in the process and consume the things thus produced --  rather “than ‘Life, the Universe, and Everything’ or ‘almost everything’, as many economists think.” Try urging people to “economize” using Chang’s definition. No wonder he thinks economics is not a science?

He defines capitalism, as Karl Marx did, as an “economy in which production is organized in pursuit of profit.” Most individuals spend yeas and substantial money to educate themselves in pursuit of a higher income. They make an investment in themselves. Producing products that people want requires an investment by an entrepreneur, who provides the capital, thereby a capitalist. The economy should be called the investment economy or, as I prefer, a competitive market economy in which anyone can compete to distinguish it from socialism which is a closed market economy, permitting no competition. Nowhere does Chang refer to monopolistic competition or to Prof. Chamberlin who described our economy as a monopolistic competitive economy. Instead he devotes less than a page to what Prof. Ursula Hicks called icksHicks “imperfect competition” but he seems unaware that there is nothing imperfect about a monopoly and few, if any, firms that are perfectly competitive. Every firm has some monopoly power ranging from nearly perfect monopoly in cases of patents and copyrights to illusory product differentiation achieved as a result of advertising to hardly any monopoly power, individual farmers. ...

 

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Ben Shapiro does a brilliant job of explaining why Congress keeps ceding its power to Obama
Jesse Richman, 6/4/2015

Shapiro's argument came in a piece at Breitbart entitled "Obama's Trade Agreement Leaks While Republicans Cower." He writes:

The idea behind fast-track authority is that the president will not feel free to negotiate, and no one will negotiate with him, if any agreement is subjected to the prospect that a negotiated agreement could be renegotiated by a third party – namely, Congress. But this is a particularly odd argument, because it assumes that the president wants to give away more than is in the United States’ interest to give away. After all, the president can use the possibility of Congressional wrangling as a leverage point in negotiations: “How can I go back to Congress with this proposal? You know they’ll simply amend it. If you give me X, however, then I can fairly assure you that we’ll get this deal done.” Congress provides a convenient and useful “bad cop” for any president hoping to negotiate an international agreement....

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Obama admits that Climate Change will be in Obamatrade
Howard Richman, 6/4/2015

My scoop was published on the American Thinker website this morning. Here's the beginning:

In a speech on the Senate Floor on May 22, Democratic Senator Ron Wyden of Oregon ridiculed those who thought climate change regulation would be part of Obamatrade:

We’ve heard suggested, for example, that it’s a backdoor route to immigration reform or action on climate change…. My sense is that the rate these hypotheticals are going, you’re bound to hear that a future president working on a trade deal might have second thoughts about the Louisiana purchase.

But in an interview on NPR’s Marketplace yesterday (June 3), President Obama said that enforcing climate change regulations will indeed be part of the Trans Pacific Partnership, the Obamatrade pact that he is currently negotiating with Malaysia and 10 other countries. He said:

If we want to solve something like climate change, which is one of my highest priorities, then I’ve got to be able to get into places like Malaysia, and say to them, this is in your interest. What leverage do I have to get them to stop deforestation? Well part of the leverage is if I’m in a trade relationship with them that allows me to raise standards.

To read the rest, go to:

http://www.americanthinker.com/blog/2015/06/obama_admits_that_climate_change_will_be_in_obamatrade.html

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Fast Tracking the Decline in American Power -- we were published in the American Thinker today
Howard Richman, 6/2/2015

The article includes our report of our latest study:

To see if mercantilism works, we just conducted a statistical study of 11,623 country-year observations for 186 countries from 1870 through 2007 using panel data models. The results: a strong statistically-significant correlation between balance of trade and national power. A favorable balance of trade is associated with an increase in power (national material capabilities), an unfavorable balance with a decrease.

To illustrate our findings, Figure 1 extrapolates the expected trajectory of U.S. power in two scenarios. The first scenario envisions twenty years of trade deficits the size the U.S. ran in 2007. The second scenario envisions balanced trade. Under trade deficits, U.S. national power declines by 28 percent. Under balanced trade, it remains stable, increasing by 0.5 percent.

If U.S. leaders wanted to sustain their nation’s position as a world power in the long run, they would be well advised to pursue the goal of balanced trade. The current approach, which accepts imbalanced trade, is likely to lead to diminished U.S. power.

To read the entire piece, go to:

http://www.americanthinker.com/articles/2015/05/fast_tracking_the_decline_in_american_power.html

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Book Review Allan S. Blinder, After the Music Stopped –The Financial Crisis, the Response, and the Work Ahead (New York, Penguin Press, 2013)
Raymond Richman, 6/1/2015

Allan Blinder is a Princeton professor of economics and a former vice chairman of the Federal Reserve Board. As he states in his preface, the American people still don’t quite know what caused the Great Recession, how and why it happened, or what the authorities did about it.

He acknowledges that the housing bubble was not the only contributor to the financial crisis that followed. He writes that seven key weaknesses predated the recession:

  1. Inflated asset prices,
  2. Excessive leverage (heavy borrowing) throughout the economy,
  3. Lax financial regulation,
  4. Disgraceful banking practices,
  5. Unregulated securities and derivatives,
  6. Abysmal performance of statistical credit agencies,
  7. Perverse financial incentives inducing financial institutions to “go for broke”.

He does not mention that the Community Investment Act of 1977, which is still the law, which forced  the banks and Fannie Mae and Freddie Mac, government-sponsored private entities, to make millions of subprime loans. Nor does he mention that the Federal Reserve Board was made responsible by the Act for ensuring that mortgage lenders maintained lending standards, but that it failed to do so and thereby itself helped worsen the recession.  He does not mention the explosion of our trade deficits that resulted from foolish trade agreements and were a drag on economic growth.

The inflated asset prices he criticizes were caused by the low long-term interest rates, partly caused by the inflow of foreign government loans which caused the trade deficits. As every economist knows lowering interest rates inflates asset prices, real estate and corporate stock especially. There was lax financial regulation alright, but the Fed and the other bank regulators did not use the powers they had to regulate financial institutions. Yes, there were disgraceful banking practices. As for perverse financial incentives, banks rewarded executives for taking risks and producing profits as long as the bubble continued. When the bubble burst, Treasury Secretary Paulson bailed out all but Lehman Bros. Its failure precipitated a collapse in the securities markets....

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The Trade Agreements Negotiated by the U.S. Have Been a Disaster for U.S. Workers. and the U.S. Economy
Raymond Richman, 5/26/2015

In  seeking a Trans-Pacific free trade agreement, the U.S. is continuing a policy of seeking international trade agreements in spite of the fact that all of the agreements it negotiated since 1966 have converted the U.S. from the world's leading creditor nation to the world  to the world’s leading debtor nation. In 1947, the U.S. began negotiations seeking an international General Agreement on Tariffs and Trade (GATT). There were eight rounds of negotiation from 1947 to 1994. They had little effect on the U.S. trade balance until the Kennedy round, 1964-1966. The trade deficits exploded after the Uruguay round. 1986-1993, in which 123 nations participated and which created the World Trade Organization (WTO) which began operations in 1995. The creation of the WTO marked the beginning of the end of the USA as the world’s leading industrial power. The North American free Trade Agreement (NAFTA) with Mexico and Canada in 1993, the granting of permanent most-favored-nation trade status to China in 1980, the free trade agreement with Korea, all produced large trade deficits and cost millions of American jobs. These agreements led to a major exodus of U.S. manufacturing firms overseas.    

The US ran a trade surplus in 1981 of $3.1 billion. By 1983, the US experienced a trade deficit of $35.1 billion. By the end of the Uruguay round, 1983-1994, and the creation of the WTO in 1995, the U.S. trade deficit had grown to $105.3 billion. The trade deficit peaked in 2006 at over $800 billion and in 2014 it amounted to $467.6 billion.  ...

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Michelle Malkin: U.S. harmonizes its patent laws with Europe
Howard Richman, 5/24/2015

In preparation for the Obamatrade deal with Europe, the United States has adopted Europe's anti-innovation patent laws. Michelle Malkin is on the story. She writes:

The AIA’s [America Invents Act's] primary agenda? “Harmonizing” our patent laws with the rest of the world to reward paper-pushers who are “first to file” at the patent office, instead of those who are “first to invent.” These and other measures enacted by Obama threaten to drive garage tinkerers and small inventors — the designers, engineers and builders of American prosperity — out of the marketplace. Longtime venture capitalist Gary Lauder noted that the first-to-file system has suppressed solo and small-business innovation in Europe and Japan. “The U.S. gets 10 times the angel and venture capital of Western Europe — which recently declared an ‘innovation emergency,'” Lauder observed. “So why are we harmonizing with them? They should be harmonizing with us.”

America's patent laws have been moving in this direction for years, due to foolish decisions by the DC federal court. More and more, patents are being filed, not by those who are developing new inventions, but by those who wish to sue those who eventually develop the new inventions.

Inventors should, at the very least, be forced to produce working prototypes of their invention before they can apply for patents. I would like to see a much tougher patent process in place, but also one which includes automatic grants to produce the invention whenever a patent is awarded.

Which American President Holds a Patent?

By the way, Malkin includes a fun fact in her article. She writes:...

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Sen Sessions explains Obamatrade in key Senate Speech -- I was published in the American Thinker blog
Howard Richman, 5/24/2015

I closely followed the Senate debates on Trade Promotion Authority (Fast Track), and afterwards posted an American Thinker blog piece that has received about 300 comments, almost all positive. I began:

Senator Sessions’s floor speech against Obamatrade on Friday could go down as one of the most important Senate speeches ever.  Already it is getting rave reviews:

  • Rush Limbaugh hailed it (Odds are Obamatrade screws America): “Jeff Sessions had a massive op-ed piece and floor speech in the Senate about this.”
  • Michelle Malkin gushed: “I wish that Sen. Jeff Sessions would run for president, because I would sign up in a heartbeat.”

Democratic Senator Ron Wyden of Oregon set the stage for Sessions’s speech by lauding Obamatrade as “the most progressive trade policy in our country’s history” because it regulates much more than just trade:

If you want to read the rest, go to:

http://www.americanthinker.com/blog/2015/05/sen_sessions_explains_obamatrade_in_key_senate_speech.html

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U.S. Trade Agreements Have Been an Economic Disaster for American Workers
Raymond Richman, 5/21/2015

In 1947, the U.S. began negotiations to seek an international General Agreement on Tariffs and Trade (GATT). There were eight rounds of negotiation from 1947 to 1994. The Tokyo round which began in 1973 and lasted for more than six years was attended by 102 nations. The last round began in Uruguay in September, 1986 and 123 nations participated and ended with the creation of the World Trade Organization (WTO) in 1995. GATT marked the beginning of the end of the USA as the world’s leading industrial power.

GATT was followed by the granting of “most favored nation” status to China in 2000. In a 2012 article by Justin R. Pierce, a Federal Reserve Board researcher, and Yale economist Peter K. Schott, found a link between the sharp drop in U.S. manufacturing employment after 2001 and the elimination of trade policy uncertainty resulting from the U.S. granting of permanent normal trade relations to China.

When one examines the history of the US trade balance, it appears that until the end of the Tokyo round which lasted from 1973 to 1979, the US ran small trade surpluses with the rest of the world. The US trade surplus in 1981 was $3.1 billion. In 1983, the US experienced a trade deficit of $35.1 billion. By the end of the Uruguay round, 1983-1994, and the creation of the WTO in 1995,.the U.S. trade deficit had grown to $105.3 billion.

 ...

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Tomorrow's vote on Portman-Stebanow currency manipulation amendment shaping up as the key Senate vote on Fast Track
Howard Richman, 5/19/2015

Tomorrow's vote on the Portman-Stebanow amendment to Fast Track is shaping up as the only significant amendment that could pass. It would direct the U.S. Trade negotiator to include prohibitions against currency manipulation in the trade treaties that Obama negotiates. The Hill reports:...

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This Amendment would Preserve U.S. Sovereignty from Fast Track
Howard Richman, 5/18/2015

This week, the U.S. Senate will be considering up to 100 amendments to the Fast Track bill, which is expected to pass the Senate on Friday. Senator Elizabeth Warren and twelve other Democratic senators are sponsoring what could be the key amendment (pdf) for preserving U.S. sovereignty. Here is the text:

At the end of section 106(b), add the following:

(7) FOR AGREEMENTS THAT THREATEN UNITED STATES SOVEREIGNTY.—The trade authorities procedures shall not apply to an implementing bill submitted with respect to a trade agreement or trade agreements entered into under section 103(b) if such agreement or agreements, the implementing bill, or any statement of administrative action described in subsection (a)(1)(E)(ii) proposed to implement such agreement or agreements, includes investor-state dispute settlement.

At issue are the Investor-State Dispute Settlement provisions that are in Obama-type trade agreements. If any existing U.S. law or regulation violates the agreement, foreign businesses can sue the U.S. government for monetary damages. Through billion dollar fines, the dispute arbitrators can force Congress to change any U.S. law that differs from the trade pact. 

Like Senator Warren, Republican Senator Jeff Sessions wants to preserve U.S. sovereignty. On May 12 he issued a Critical Alert in which he wrote:...

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Fast Tracking the End of U.S. Sovereignty
Howard Richman, 5/17/2015

Now President Obama is selling Obamatrade and has come up with a new lie. On May 8, 2015, he told an audience in Beaverton Oregon:

No trade agreement is going to force us to change our laws.  This agreement would make sure our companies aren’t discriminated against in other countries. 

But Congress’ think tank has found that the Trans-Pacific Partnership (TPP), the first of the trade agreements that Obama is negotiating, would indeed change U.S. laws. Senator Jeff Sessions reports:

[A]s the Congressional Research Service explains, the fast-tracked deal “would supersede existing U.S. law” and result in the U.S. being “bound by international law,” arbitrated by a global tribunal.

What is President Obama negotiating into TPP? The following all appear to be likely:...

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Jeff Sessions May 12 alert about FastTrack
Howard Richman, 5/15/2015

Senator Jeff Sessions of Alabama definitely gets it. His May 12 critical alert is excellent. Here's how he begins:...

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Solving the Capital Gains Riddle
Raymond Richman, 5/14/2015

Under the U.S. personal and corporate income tax codes, realized capital gains and losses are considered income. However, when calculating national income, capital gains and losses are excluded. Why the difference in treatment? No serious economist would argue that changes in the value of assets during a period should be added in calculating the national income for that period. Nor even that realized capital gains and losses should be added in calculating national income. Yet most appear to believe that realized capital gains at least should be counted as income for purposes of personal and corporate income taxation. Some argue that to exclude realized capital gains would be unfair to taxpayers whose income comes from other sources. In this view, even unrealized capital gains (referred to in the economic literature as accrued capital gains) are income but need to be excluded for administrative reasons, i.e., one should not be forced to sell some of his capital to pay the tax liability. Herein we argue that accrued capital gains are not income, that realized capital gains are income if they are consumed but not income if they are re-invested.

As distinguished an economist as the late Herbert Stein, former chairman of the Council of Economic Advisors, in an op-ed piece in the Wall Street Journal, "Don't Cry for Capital Gains Taxpayers" (WSJ, July 5, 1995), wrote:

      Because of the value of time, the tax on capital gains is lower than it seems--and lower than the tax       on many other [sic!] kinds of capital income. That is due to the deferral of the tax on the gain from         the time the gain accrues to the time the gain is realized by sale or exchange.

When he writes that an accrued gain is a form of capital income, he is confusing capital and income.

 ...

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Cruz files amendment to prevent Fast Track from changing federal immigration law
Howard Richman, 5/13/2015

When Fast-Track is voted upon, Senator Ted Cruz plans to propose an amendment that would prevent Obama from using Fast-Track power to change federal immigration law. A Texas newspaper reports:

U.S. Sen. Ted Cruz (R-Texas) today filed an amendment to the Trade Act of 2015 to lock in assurances that this legislation cannot be used to change federal immigration law.

“The Obama Administration has repeatedly assured Members of Congress that there is nothing in the Trade Act of 2015 that would allow the President to unilaterally make changes to federal immigration laws,” said Sen. Cruz. “I agree, and we should put it in writing and make it binding law. I am a strong supporter of free trade, but I cannot support legislation that would allow the President to once again circumvent Congress to enact his own immigration laws. Since the Obama Administration has emphatically argued that TPA [i.e. Fast Track] will not affect immigration, it should support this amendment, which makes that promise explicit.”

The amendment states that nothing in the Trade Act of 2015 or in any trade agreement subject to the Act “shall alter or affect any law, regulation, or policy relating to immigration.”...

 

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Fast Tracking an International EPA -- we were published in the American Thinker today
Howard Richman, 5/13/2015

After documenting that the Trans Pacific Partnership treaty (TPP) would create a new level of international environmental regulation enforced by a private court system, we point out that Balanced Trade is a much better alternative:

Balanced Trade - The Alternative That Works

Instead of creating a new tangle of international environmental regulations, there is a simple and principled way for the United States to structure its trade policy, one that is founded on the principle of reciprocity. If we require balanced trade in our trade agreements, we don’t have to regulate the practices of our trading partners.

Congress could easily balance trade without any trade agreements whatsoever, simply by enacting the Scaled Tariff, a single country variable tariff which is applied to each trade-surplus trading partner proportionately to the trade surplus it runs with the United States. As we show in our 2014 book Balanced Trade this approach complies with current international trade law.

With balanced trade, environmental regulations can be kept local. When a trading partner permits massive pollution in order to subsidize exports, the trade balancing tariff will prevent them from undermining U.S. production -- they have to import more from us if they want to export more to us.

Follow the following link to read the rest:

http://www.americanthinker.com/articles/2015/05/fast_tracking_an_international_epa.html

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American-producer New Balance wins sports shoe contest, as Elizabeth Warren stops Fast Track in Senate on Procedural Vote
Howard Richman, 5/12/2015

Senator Elizabeth Warren of Massachusetts gets credit for this one. She led the Democratic Senators in a rebellion. Previously, they had backed everything that Obama had sent down the pike. All but one of the Democrats voted against the bill.

One of the issues was the sports shoe contest. The Bangor Daily News explains:

Massachusetts-bases shoe manufacturer New Balance, which has manufacturing plants in Maine, has said the trade deal’s passage could cause it to cut back its domestic manufacturing. Shoe giant Nike is among those lobbying for removing tariffs on shoe imports from Vietnam.

New Balance officials have said removing the tariffs would make it difficult to compete and could jeopardize 900 jobs at its Maine plants in Norridgewock, Skowhegan and Norway.

Meanwhile, Senator McConnell was reluctant to compromise with Democrats on the procedural vote, possibly because he would be losing his own Senators on the votes to follow. If he had continued, five had already announced that they were planning to oppose Fast-Track, including Mike Lee two days ago and Rand Paul today. And others were wavering including Sen. Collins of Maine, who was careful to point out in her comments afterward that her vote did not mean that she favored Fast Track:...

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CNN quickly cuts away from Japanese leader saying that Fast-Track will enable free flow of people
Howard Richman, 5/11/2015

At his April 28 Press Conference with Obama, Prime Minister Shinzo Abe of Japan confirmed that the Trans Pacific Partnership, the secret treaty that he is negotiating with Obama, is designed to enable the free flow of people among the 12 participating countries (which include both Mexico and the United States). You can watch this statement at the 47:06 mark. He says (according to the simultaneous translation):

"First of all on TPP, this is not something that we create out of consciousness about China. The economic growth of the region will be a positive and create opportunities for Japan, the United States, and the world. The TPP is such that to the eyes of many countries, it has to become a model.

It should be a model for China in that it's an ambitious attempt to create a new economic sphere in which people goods and money will flow freely within the Asia-Pacific region....

On these points we see completely eye-to-eye between President Obama and myself. 

Watch this humorous YouTube video from Redacted Tonight to see CNN instantly cutting away before its viewers could hear Abe's statement:

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The amendment to FastTrack that could save America
Howard Richman, 5/11/2015

Tomorrow, the Senate will start voting on whether or not to give President Obama Fast-Track power (Trade Promotion Authority). As my father, son and I noted in a commentary last week (Fast Tracking America's Economic Destruction), the Trans Pacific Partnership will give our treaty partners permission to manipulate exchange rates.

Even worse, the court system in TPA would make it impossible for the United States to ever combat currency manipulation because, if the United States were to promulgate tariffs against a currency-manipulating treaty country, businesses exporting to the United States from that country could sue the U.S. government for billions of dollars of damages in TPP's private court system. We wrote:

The Worst Thing about Fast Track

The worst aspect of Fast Track is not that it would permit the currency manipulations that tilt the playing field against American workers. It would set up a private court system that could render billions of dollars of judgment against the United States government should a future president decide to balance its trade with the currency-manipulating countries through tariffs.

In contrast, WTO rules include a provision that lets trade deficit countries impose trade-balancing tariffs. President Nixon took advantage of that provision when he imposed an across-the-board 10% tariff in August 1971, which quickly forced changes that brought U.S. trade into balance by 1973. The United States could take advantage of this WTO provision today. Doing so would give the U.S. more factories, more R&D, and more economic growth.

But the new private court system changes everything. It ensures that no future president can ever solve America’s trade deficits.

Here is the text of the simple amendment that would give future presidents the ability to balance trade. It should be added to all trade treaties that are negotiated by the U.S. government:...

Read more...

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    Wikipedia:

  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]