Posted at 9:20am on May 8, 2008 So much for that particular "distraction"


Cross-posted on Right Michigan at

Dillon, D-Redford Township, wasted no time in denouncing the (recall) effort as a distraction from the state's serious problems...

--Detroit Free Press, May 2, 2008

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Posted at 11:49pm on Apr. 4, 2008 "5 Myths About NAFTA"

By Pejman Yousefzadeh

Discussed here. Of the three major Presidential candidates currently in the race, guess which two have bought into the myths.

I have a confession to make, however: I do think that NAFTA has transformed--or at least, strongly influenced--the economy. For the better, I might add.

Posted at 12:31am on Mar. 25, 2008 The Free Trade Creates Wealth For All Open Thread

And a rising tide lifts all boats

By Neil Stevens

Relatively, the United States has more obese people than any other country in the world, and per capita Mexico is second on the world obesity list. Diabetes is now the leading killer.

These weren't always true of Mexico, but now they are. Why? NAFTA created wealth, a rising tide lifted all boats, and now Mexicans are ever more likely to be able to buy the food they need, plus the food they want, so much so that they can eat too much.

The human body is made to withstand food shortages. Perpetually having enough food will always create obesity. Weight is a sign of prosperity, and I for one am glad that NAFTA could help Mexico as much as it helped the USA.

Open Thread.

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Posted at 1:32am on Mar. 16, 2008 Endorsing NAFTA

By Pejman Yousefzadeh

This editorial deserves widespread attention--especially given the neo-protectionism that is currently afflicting the discussion of trade policy:

For the past few months, we Canadians have had our ears pressed to the border, listening with great interest as our American friends discuss the North American Free Trade Agreement.

As a partner in the agreement, we have a tremendous stake in how this conversation plays out, of course. But we also have a unique perspective on the agreement. For us, Nafta works. That is because Nafta allows trade to flow more naturally and fluidly across our shared border and has helped turn the Great Lakes region into one of the largest concentrations of economic might in the industrialised world.

The numbers are significant. The eight Great Lakes states plus Ontario account for 30 per cent of North America's employment and output and a healthy 36 per cent of its manufacturing employment. Every day, about $900m worth of goods travels between Ontario and our Great Lakes partners. At the Detroit-Windsor gateway alone - the busiest in the world - $122.8bn worth of goods, 6.5m trucks and 6m cars cross each year. This has helped create an integrated Great Lakes economy where products are made - not on the Canadian side, or the American side, but together as a region.

For example, a part produced in Ohio could find its way into a car assembled in Ontario, which in turn could be shipped to Europe. Resources produced in Ontario can be sold in the US, turned into products and sold again in the Canadian market.

Canada is the largest trading partner for 36 of 50 US states. Pennsylvania exports more to Canada than its next seven markets combined. Cross-border trade supports 221,500 jobs in Michigan alone. The regional trade relationship is complex, dynamic and, ultimately, good for our shared economy.

A 2004 study in the American Economic Review concluded that, while there was short-term job loss in manufacturing in the early days of Nafta, the lost employment was offset by employment gains in other parts of manufacturing. Overall, wages increased, as did productivity. In fact, labour productivity in manufacturing increased by a remarkable 0.93 per cent annually. Overall, Canada and the US increased their trade with each other, forming a more cohesive North American market.

There is a lot more at the link and all of it is worth reading.

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Posted at 9:37am on Mar. 4, 2008 Since it's awards season...


Cross-posted on Right Michigan at

I didn't watch the Oscars this year.  I mean, I rarely watch the Oscars but I have in the past.  There just wasn't anything there for me this time.  No rooting interest.  I'd seen a few of the movies being discussed but the whole thing was anti-climactic.  Javier Bardem was going to win best supporting actor and "No Country for Old Men" was a lock to take home a couple more little golden statues.  Probably deserved them too.  It's the sort of creepy movie that gets under your skin for a few days.  And I'm not too proud to admit that when I got home from the theatre the first thing I did was check my deadbolts to make sure they hadn't been knocked out of place.

The movie wasn't a dark horse and it did what it was expected to do.  It won it all.

Same situation with the Wolverine State and "States and Governing" magazine.  You may recall that back during the 2006 gubernatorial election Michigan was actually rated the best managed State in the entire Union.  And let's be honest... this particular publication is written about state governments.  You think they're going to have any sort of smaller-government editorial policy?  Heavens no.  It's a periodical for bureaucrats by bureaucrats.  Bigger and more obtrusive equals better in that world.  It's really almost a shock that we fell all the way to third!

But it did wake me up in a sense.  It'd be unfair if we let this time of year go by without unsealing envelopes and naming winners of our own.  Since it's awards season and in honor of Michigan's shocking third place finish in the magazine's management rankings I figured there's no time like the present to keep red carpet unfurled.  And hey, we'll start small.  Instead of looking back over the whole year let's just take a look at today's news and hand out some little statuettes.  (Readers lacking a sense of humor please note: I am not actually going to give anyone any physical statuettes.  I'll simply distribute them in spirit.)

So without further ado, I'd like to present the first annual, or monthly, or weekly... or, well, today's... LEFTY Awards!

Best Use of a Bribe To Get Favors from Corrupt Michigan Democrats:: Fifth / Third Bank and Christine Beatty

The Detroit News reports this morning that Kwame Kilpatrick's girlfriend and former Chief of Staff Christine Beatty seems to have received a massive grant to purchase a second home.  The tricky part is, when she received the cash the grant program hadn't been created yet.  And she got more than they ever awarded after they did create it.  And internal memos indicate the payoff was designed to influence the mayor and his administration.  And Kwame and company fought tooth and nail to keep those memos from ever seeing the light of day.  But it's all above the board.  They promise.

...A federal judge did not order Fifth Third Bank to create that "economic empowerment program" until May 19, 2004 -- two weeks after Beatty received her mortgage, federal court records show.

Not only was Beatty the first Detroiter to receive a grant under the program, the $12,000 the bank gave her was more than anyone else in the program received, Fifth Third senior vice president Jack Riley confirmed. Four months after Beatty received her grant, Fifth Third set a $2,500 cap on individual grants, an amount that later was increased to $5,000, Riley said.

The Detroit News previously reported the bank gave Beatty the money after a loan officer wrote a memo that Fifth Third should approve a $237,000 mortgage for Beatty, despite her poor credit rating, because she was "a personal referral from the mayor" and the bank was working on a deal with the city for collection of taxes.

"This could go a long way with 5/3 Bank's efforts in the City of Detroit and the Mayor would think very favorable of our bank," bank official Keith Anderson wrote in the April 14, 2004, internal bank memo.

Yep, nothing shady about that at all.  Democrats are perfect and noble and good and wonderful and smell like clean linen and shine like the face of Moses after he walked down from the mountain.  No graft.  No corruption.  No bribes.  No personal favors.  No purchasing of influence.  No need to resign.  No affair.  No romantic trysts.  No standards.  No ethics.  No accountability.  No integrity.  No... oh, wait... nevermind.  Next category.

Best Use of Greed to Kill Jobs: The United Auto Workers

The Associated Press reports that the number of plants now shuttered because of the UAW's greed-fueled strike of American Axle has reached five.  Nearly twenty-thousand moms and dads are officially out of work this morning as the union refuses to talk.  According to reports last week American Axle has been waiting at the table for days but is entirely absent a negotiating partner.

You'll remember that the union bosses called the strike when the company sought a bit of wage parity.  Their competitors in the United States currently pay between $20 and $30 an hour all-in per employee.  American Axle currently pays their UAW workers $73 an hour all-in.  

The closures bring to five the total of factories GM has closed due to a lack of parts made by American Axle & Manufacturing Holdings Inc., affecting more than 13,000 GM hourly workers. The laid-off workers will get most of their pay under their union's contract with GM.

About 3,600 workers represented by the United Auto Workers at five American Axle plants in Michigan and New York went on strike last week in a contract dispute.

American Axle and the UAW haven't returned to the bargaining table since talks broke off on Feb. 25, although both sides have said they're ready to resume negotiations at any time.

American Axle spokeswoman Renee Rogers said Monday afternoon that no talks have been scheduled...

If you listen to the fat-cat union bosses at the UAW halls you'd think this was about NAFTA, CAFTA, the SHAFTA and Mexico.  The three amigos plus one.  If you listen to the competition here in the United States and to common sense you realize this is about survival.  But hey, you can't make an omelet if you don't break a few eggs.  What are 3,600 Michigan jobs in the long run?  Small price to pay to maintain a tough-guy-on-the-block image and forced dues money for the UAW.  Big deal if thousands of moms and dads find themselves out of a job.  

Best Example of How Living Up to Expectations Isn't Always a Good Thing: The Big 3

Sales are down.  Way down.  Again.  As predicted.  And now it's costing folks their jobs.The Ivory Tower reports:

Two months into the year, this much is clear: The dreary auto sales market predicted for the first half of 2008 is living down to those lousy expectations...

In all, Detroit's automakers posted a combined decline of 11%. Sales were off 14% at Chrysler LLC, 12.9% at General Motors Corp. and 6.6% at Ford Motor Co. That led GM and Ford to announce North American production cuts of 5% and 10%, respectively, for the second quarter.

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Posted at 2:09pm on Mar. 3, 2008 How... *Clintonian* of you, Senator Obama. [UPDATED]

I guess it all hinges on what the definition of "denial" is.

By Moe Lane

[UPDATE: "NAFTAquiddick." I love it. - Moe Lane]

Ed Morrissey brings us the latest round in the Obama NAFTA flap. Apparently, somebody was taking notes in Chicago.


Canadian memo recounts meeting

SAN ANTONIO, Texas - Barack Obama's senior economic policy adviser privately told Canadian officials to view the debate in Ohio over trade as "political positioning," according to a memo obtained by The Associated Press that was rejected by the adviser and held up Monday as evidence of doublespeak by rival

The memo is the first documentation to emerge publicly out of the meeting between the adviser, Austan Goolsbee, and officials with the Canadian consulate in Chicago, but Goolsbee said it misinterprets what he told them. The memo was written by Joseph DeMora, who works for the consulate and attended the meeting.

"Noting anxiety among many U.S. domestic audiences about the U.S. economic outlook, Goolsbee candidly acknowledged the protectionist sentiment that has emerged, particularly in the Midwest, during the primary campaign," the memo said. "He cautioned that this messaging should not be taken out of context and should be viewed as more about political positioning than a clear articulation of policy plans."

Obamaspinning after the fold.

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Posted at 10:22am on Mar. 3, 2008 Still working on that "cutting to the bone" thing while Lansing talks new taxes (again)


Cross-posted on Right Michigan at

It's no secret that Lansing democrats are hoping to raise our taxes again.  It was only weeks ago that Speaker of the House Andy Dillon told the Michigan Infrastructure and Transportation Association that a lame-duck vote to spike the gas tax was "probable."  The man took a lot of heat for that accidental confession so you know he's enjoyed the thaw these last couple of days, the damage it's caused to the roads and the corresponding action at the State Capitol.

While drivers across the State try and often times fail to dodge some of the biggest pot-holes in recent memory (near record setting snowfall and cold will do that to roads, Al Gore) a group is meeting in Lansing to discuss the future of State funding for roads.  There's no time like the present to find a handful of angry motorists who are willing to charge themselves an extra nine cents a gallon if it means charging every other Michigander hundreds of millions of dollars.  At least that's the way the thinking goes.  

After all, there's still an entire political party full of activists, bloggers, political hacks, elected officials and taxpayer funded public employees who didn't mind the last $2.4 billion tax hike, don't mind the thought of a new $8 billion tax hike on natural gas and electricity and wouldn't mind at all if we chalked up another hundred million here or there to protect their pet political projects and government waste.  

What they constantly hope taxpayers will forget is that money is fungible.  It can be spent on anything.  Similarly, it can be saved from anywhere.  It can be applied, reapplied or, as is often the case under the Capitol dome, misapplied.  

The Lansing State Journal reports:

The state estimates it needs to come up with an extra $320 million a year in order to maintain state-managed roads at their current level. That doesn't take into account the thousands of local roads...

The governor this past month launched a task force designed to figure out how to pay for what needs fixing. And this Wednesday, the County Road Association of Michigan will host its annual meeting in Delta Township, drawing an audience of road experts from every county.

The overall theme is money and how much more must be spent if road maintenance is to keep ahead of decay, according to the association.

Liberals and conservatives, these days, read that last paragraph in two very distinct ways.  The left asks "how much more money" and "how will we raise it?"  Conservatives ask, among other questions, "how much more money" and "where can we save it?"  

They may also ask, "why do Carl Levin and Debbie Stabenow continually fail to bring Michigan out of donor status in Washington DC?"  The state with, arguably, the most consistently weather-beaten roads in the nation still only receives about ninety-two cents for every road tax dollar we send to the federal government.  If there's one state that should be above the dollar threshold it's Michigan.  But alas, Senator Levin is apparently too busy readjusting his glasses.  But that's neither here nor there.

The roads are a mess, Democrats want to raise our taxes (again), `probably' plan to hold a vote in November on a gas tax hike, according to Andy Dillon, and Jennifer Granholm is creating task forces and commissions to "study" the problem and release likely-pre-drafted reports telling residents just how bleak the future looks without more "revenues."  She's... ahem... paving the way for another tax increase.  (Ba-dum-CHING!)

While the tax-hike drum beats start again it is important to remember that it isn't a gas-tax-or-nothing proposition.  If the State really does require extra money for road construction and repairs there is an opportunity to find it elsewhere in government through the elimination of wasteful spending.  

As long as Lansing continues to spend hundreds of millions of dollars on items like a fancy new Michigan State Police Headquarters that even MSP said they didn't need and didn't want, on full-time staff for an Office of the First Gentleman, on lifetime welfare benefits for able bodied adults... the list can go on and on... they'll have a hard time convincing anyone that Lansing has a "revenue" problem.  For the love of pete, they just swiped an extra $1.5 BILLION last year alone and that still isn't enough.  

Instead of another taxpayer funded blue ribbon panel on ways to gorge working moms and dads how about Lansing simply examine some of our local units of government who, it turns out, are finding interesting ways to save a little cash themselves.  The Detroit News reports this morning that places like Inkster have saved $10,000 by eliminating nice but unnecessary programs (and they're not the only ones).

So sorry, Santa. Inkster gave you the ax over the holidays. Mayor Hilliard Hampton tapped the Downtown Development Authority to pay for decorations, ending a long tradition of the city footing the bill.

"We made a commitment every season to purchase (the displays), but we haven't been able to do that," Hampton said. "It demonstrates that cities are forced to deal with core responsibilities. Everything else is on the chopping block...

Elected in November, Mayor Jim Fouts nixed a chauffeur who had escorted his predecessor, deploying the driver and shifting the duties to create a mobile mini police station. "It serves as an effective deterrent," Fouts said. "We're making it easier for people to report things to the police and making it more flexible and mobile. It's allowing residents to become familiar with the police."

Savings: $30,000 in overtime cuts.

Imagine how much cash a city like Detroit could save by scaling back the mayoral chauffeur service... or refusing to pay for losses in multi-million dollar lawsuits that find the mayor responsible for illegal firings, perjury and who knows what else.

Would it be nice to pay Kwame's legal bills?  Sure.  Would it be nice to pay for a driver for Jim Fouts?  Of course.  And everyone loves Santa.  It'd be nice if the city could pay for those decorations instead finding others to sponsor the displays.  It'd also be nice if we could buy iPods for every school kid and put a pony in every little girls backyard.  But alas, this is reality.  We just plain can't afford it.  

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Posted at 2:33am on Feb. 29, 2008 Unilateralism

By Pejman Yousefzadeh

Let's see how fare those promises of garnering international respect and affection for the United States once George W. Bush is out of office:

Canada's Prime Minister Stephen Harper said Thursday the United States should not reopen talks on the North American Free Trade Agreement as the two U.S. Democratic presidential hopefuls have proposed.

Harper warned that renewed talks would give Canada the chance to renegotiate the pact so that it is more favorable to his country.

"If any American government chose to make the mistake of reopening that we would have some things we would want to talk about as well," Harper said.

Trade minister David Emerson said Wednesday it would be unwise for the U.S. to renegotiate NAFTA because the it has a good deal when it comes to access to Canada's oil.

Emerson noted that Canada is the largest energy supplier to the U.S.

Read on . . .

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Posted at 2:22am on Feb. 28, 2008 The Folly Of The Clinton-Obama NAFTA Stance

By Pejman Yousefzadeh

Discussed here. In all likelihood, there will be no withdrawal from NAFTA under either a Clinton or Obama Administration. But there will be a continuous trashing of NAFTA, along with a complete unwillingness to engage in any other trade deals. That is bad enough and enough of an incentive to vote differently if one is an adherent to the policy of free trade and trade liberalization in general.

More here. The Russert question was excellent. The answers less so. And the last sentence is far too optimistic. Democrats have been neo-protectionists for quite a while now. It didn't take the Ohio primary to make them into neo-protectionists and the end of the primary won't shake them out of the habit. Alas.

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Posted at 2:13am on Feb. 27, 2008 Earth To David Leonhardt

By Pejman Yousefzadeh

Concerning your article, where you wrote the following:

There is no doubt that trade has hurt many people in Ohio. In just the last few months, Alcatel-Lucent has announced plans to close a telecommunications equipment factory in Columbus and move some of the jobs to China, while a steel-door plant near Youngstown shut its doors and shipped some of its equipment to Mexico.

Back in 2000, the typical Ohio family was still making more money than the typical American family, according to Moody's But over the last eight years, real median income in Ohio has dropped almost 10 percent, to about $47,000, leaving it $2,300 below the national median.

First of all, correlation does not constitute causation and you didn't even try to establish a causal relationship in your article between trade agreements like NAFTA and job losses.

Secondly, on the facts, you are wrong.

A retraction and correction are in order. Do the stand-up thing and deliver it. It is your reputation at stake, you know.

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Posted at 10:09pm on Feb. 24, 2008 The Politics Of Incoherence

By Pejman Yousefzadeh

When it comes to NAFTA, Barack Obama doesn't make a lick of sense:

Appealing to union voters in a dry wall manufacturing plant in this crucial primary state, Sen. Barack Obama, D-Ill., Sunday afternoon said that even though he has repeatedly said the passage of NAFTA was bad for the country, he would not try to repeal it.

"I don't think its realistic for us to repeal NAFTA," he said during a town hall meeting on the economy.

He argued arguing that because the trade deal had been passed more than a decade ago, it was entrenched in the economy, and any attempt to repeal it "would actually result in more job loss ... than job gains."

So . . . NAFTA has been bad for the economy but getting rid of something that has been bad for the economy would make the economy worse so it's better to stick with the bad instead of dumping the bad and avoiding the worse even though what we have right now in NAFTA is bad.

Got it. Of course, it's entirely possible that Barack Obama knows full well that NAFTA has been good for America and doesn't want to repeal it, even though he is perfectly willing to trash it for domestic political consumption.

But I guess that's just too simple an explanation for what's going on here.

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Posted at 1:37am on Feb. 22, 2008 "Obamanomics"

By Pejman Yousefzadeh

Guest-blogging over at Andrew Sullivan's place, Peter Suderman uncritically quotes a comment stating that Barack Obama is "Robert Rubin on trade (pretty much keep it open but help workers)." Interesting. Of course, Robert Rubin didn't bash NAFTA and blame it for everything bad that has ever happened since human beings learned to walk upright. No, that is Barack Obama's province, and while I suspect that the good Senator doesn't know or doesn't care about the facts, Robert Rubin (credit where it is due) always did show that he possessed a strong and comprehensive understanding of the ways in which we are enriched by participating in a free trade system.

Look, I know that Austan Goolsbee is advising Barack Obama. And I know that Austan Goolsbee is a good guy. But when it comes to trade, Chicago Boys like Austan Goolsbee are not being listened to by Barack Obama.

Someone needs to point that out. The health of our trade policies--and our economy as a whole--may depend on it.

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