All posts by Matthew Grattan

Free and Fair Trade

by Michael Pasternak (ME ’17)

We’ve all heard of free trade, it’s become a hot button topic in the political sphere in recent times. However, who but the coffee drinkers among us have heard of fair trade? Few likely, yet it’s becoming a real alternative among economists and policy makers. Fair trade is a bit more complex, but free trade is simple in concept and execution: lower as many barriers as possible to international trade in order to allow free movement of goods and services and unlock wider and larger markets for everyone involved.

As a nation, we have to address that
not all foreign labor markets should
be endorsed by trade.

As a general economic principle, free trade means growth. I say this as an absolute truth: there are next to no economists in the mainstream academic sphere who believe otherwise. A University of Chicago poll from 2014 asked a panel of economists from the Initiative on Global Markets if “past major trade deals have benefited most Americans.” Twenty-three percent strongly agreed, 70% agreed, and 7% were uncertain or chose not to respond. There were no panelists who disagreed or disagreed strongly. The debate of free trade versus economic controls and tariffs is purely political and the sides are clear cut. Those on one side interpret data and use history to make decisions; those on the other side choose to only interpret fear and use trade policy as a thinly veiled substitute for xenophobia.

That being said, even once it’s established that breaking down barriers to trade is unequivocally positive, there are other concerns. As a nation, we have to address that not all foreign labor markets should be endorsed by trade. For example, sanctions on nations like Russia, who commit war crimes and invade neighboring countries at will, are appropriate because even though sanctions can hurt trade in the short term, war and instability are barriers to free trade in the medium and long term. It’s hard to trade in a war torn country where roads and bridges are not functioning and the banks aren’t open. Furthermore, you need domestic stability for economic growth. Countries who carry out war elsewhere may still experience growth, but there are few to no examples of countries in which wars are being fought that experience growth in trade. Therefore, it’s in the interest of a nation looking to maximize trade to maximize global and domestic stability. In fact, American foreign policy can be much more easily understood through that lens. Where we are militarily active, it’s usually for the sake of trying to keep regions under control in a general sense. We have a carrier group near China, for example, in order to prevent conflict between them Taiwan or Japan. The more critical a trade partner, the more resources the US is willing to commit to their region’s stability. That’s a big reason why we have such a strong tie with Israel.

However, there does enter another factor: morality and development. It isn’t an explicit duty of the United States to prevent the likes of slavery and war for the sake of preventing human suffering. Nonetheless, there’s a drive from a significant segment of the populace to do exactly that. Fair trade is the movement to address moral concerns of unfettered free trade, mostly driven from the political far-left but economically spread among academic doctrines. For example, slavery is not dead. North Korea uses slavery on a massive scale, and Qatar is known to be using slaves for much of the construction of its upcoming 2022 FIFA World Cup infrastructure. Indonesia, China, and India have problems with slavery or near-slave labor conditions. Fair trade, in theory, accomplishes two things: establish an even playing field for labor and guarantee rights for workers. It accomplishes those goals by preventing countries with horrible regulatory frameworks for human rights to enter trade agreements without concessions concerning guaranteed rights for workers.

There’s a very real debate currently occurring between proponents of the two types of trade; a debate that is philosophical just as much as it is economic in nature. I consider myself a proponent of fair trade, but there’s little data currently available to prove the long term positive effects actually exist. One thing, however, is sure: while particular trade agreements can have issues, we should aim to increase free trade wherever we can as long as we do not have a corresponding cost, and there’s no reason to return to the days of tariff past. ◊

Music Review: 22, A Million

by Noah Fechter (CE ’20)

Photo by Cameron Wittig & Crystal Quinn.
Photo by Cameron Wittig & Crystal Quinn.

Justin Vernon, whose band Bon Iver achieved prominence with the 2007 release of For Emma, Forever Ago, has an uncanny ability for sneaking into the spotlight. The story has been told ad nauseum: in a cabin somewhere in Wisconsin, For Emma was forged in unmitigated introspection and authenticity. 2011’s self-titled album, Bon Iver, built on the sincerity of his songwriting and helped the album catch a broader audience. At some point Bon Iver had a following so large that it started caving in on itself. The band went on hiatus.

On July 22, 2016, Bon Iver’s Facebook page posted a video with audio from the single “22 (OVER S∞∞N)” and an abstract contemporary art style. It was clear from then that this album would be another example of an artist stepping away from their fanbase. It was unclear, however, just what meaning was to be found in the flickering pop-art patterns and (vaguely satanic) religious symbols. Bon Iver had emerged from the underworld.

But why did Bon Iver go to such lengths for a new artistic direction? Pitchfork Media’s Amanda Petrusich called 22, A Million “…an unexpected turn towards the strange and experimental,” inspired by Vernon’s “hunger for true, tectonic innovation,” even comparing the change in sound to Radiohead’s 2000 album Kid A. And indeed, Bon Iver succeeds in finding a sound that is sometimes absolutely arcane. The single and opening track “22 (OVER S∞∞N)” captures a gospel quality in verses interspersed with feedback noise and a vocoder sample Vernon captured during a panic attack in recording. “10 d E A T h b R E a s T ⚄ ⚄” another single released simultaneously, is comprised of shuffling, breakbeat drums, grumbling waves of bass, triumphal vocal composition backed by horns, and a single, bleating, pitch augmented vocal sample echoing through the background. These tracks seem more closely inspired by West Coast alternative hip-hop than the four years Bon Iver spent as the purveyor of Northeastern Americana.

22, A Million still bears reminders that Bon Iver can convey immense beauty and enveloping emotions. The track “29 #Strafford APTS” is a page out of an earlier Bon Iver release, the folk rock instrumentation breathing heavily through a coating of dense chrome. The melodies, chord progressions, and timbre are so reminiscent that­­—minutes into the song—the switch to sharp vocoder vocals serrates the image as it is drawn. This track is the tour de force of the album, an imperative showing that this electronic, inhuman sound can also evoke feelings of nostalgia and warmth. “____45_____,” the second to final track, brings up the obvious Kanye West influence on Vernon’s writing. The song is comprised of another choir of vocal harmonies, a horn section put through auto-tune, and­—at the tail-end of the track—a plucked banjo with heavy reverb. It’s precariously similar to “Lost In The World,” Vernon’s collaboration with Kanye West on My Beautiful Dark Twisted Fantasy. The component parts of these tracks easily stand apart from one another, but the end product is in parts distant, powerful, and wavering.

There’s a lot of callback in 22, A Million, whether intentional or not. The vocoder asides that comprise the songs “715 – CR∑∑KS” and “____45_____” are nearly sparse enough to be hip-hop track interludes. The songs “29 #Strafford APTS,” “666 ʇ,” and “8 (circle)” feature more organic vocal compositions, evocative of prior Bon Iver releases. The gospel-esque vocal arrangements on many tracks reflect a popular trend in hip-hop that very prominent 2016 releases by Chance the Rapper, and again Kanye West, have spearheaded. The vocoder’s furious, breakbeat drums, ‘chipmunked’ vocal samples, and surging gospel harmonies have all been acclaimed by music reviewers everywhere. With the knowledge that Vernon is buying into these trends, then the question is surely “where is the novelty in 22, A Million?

The image that Vernon carved for 22, A Million is cryptic, goading the listener to investigate the deep and fulfilling meaning that the album has to offer. Yet, even the first listen yields an easy experience deep-seated in nostalgia and recollection. Every one of the ten tracks on the album now has a lyric video publicly available for every word to be mulled over, and the album is only fractionally longer than an episode of a sitcom. Though this album is wearing a style more beckoning, more ambitious, and more ambiguous than those before it, it’s still Bon Iver. This is still approachable, welcoming music, written in a sonic language that is well established, and naturally accepted by audiences with open ears. ◊

Miles of Movies: Deepwater Horizon

by Miles Barber (CE ’18)

Deepwater Horizon is about the events surrounding the explosion on Deepwater, a Texas oil rig owned by British Petroleum. The film follows the events leading up to the explosion and how the crew tried their best to evacuate.

The first half of this film features Mike Williams (Mark Wahlberg), who explains how his rig works to his daughter for a school project. He uses a soda can to explain how the rig works by capping the pressure from the oil. A lot of this introduction with Mike’s family serves both as exposition and character development. Mixed in with Mike’s screen time, you get little errors happening on the rig, giving you a sense of foreboding and worry.

Though other characters are introduced when we reach the rig, Mike continues to be the main character in this film. While this half of the film is a little slower than the second half, it is still tense, as each of the little problems is so well introduced. Once Mike gets on the rig, he meets Jimmy Harrell (Kurt Russell), a no-nonsense supervisor who hates corporate interference which, in this film, is presented in the form of Vidrine (John Malkovich). Kurt Russell is such a force in this film and gives a really strong performance; he’s easy to get behind since he argues for safety when others don’t prioritize it. Something also worthy of praise is the sound design during the buildup, which lets you in on every creak in the rig, every little bubble of escaped pressure.

Then, the rig explodes. This half of the film is nonstop intensity, giving you no time to breathe. The camera shakes a little to make it feel real. The explosions are everywhere, as if there was nothing on the rig that couldn’t explode. The water is on fire. The makeup team makes each and every one of the characters look grimy and hurt. Everything feels like it could have happened as shown. The only thing that doesn’t quite work are the effects: some of the wide shots of the rig falling apart just don’t look realistic.

Overall, Deepwater Horizon is an effective disaster film. It’s well-acted, has good sound, and effectively presents the buildup and the aftermath of the explosion. Kurt Russell, in particular, is excellent. The effects weren’t quite as good as I might have hoped and I think the film could have been better explained at points (maybe it’s still unclear what happened) but I would recommend seeing this film if you’re a fan of disaster films. ◊

Grade: B-

Drawbacks of the Carbon Tax

By Anthony Passalacqua (CE ‘18)

To begin, the Republican platform is most likely wrong on the science of climate change. I am no climatologist and neither are most politicians, so I will take the safe route and agree with what seems to be the prevailing theory amongst trained scientists—humans have a measurable impact on the climate of the Earth due to our carbon based emissions. With this truth out of the way, I will now argue against the carbon tax, which seeks to reduce carbon emissions by taxing companies that emit a lot of carbon. It seems a fairly straightforward and simple solution: if companies have to pay to emit pollutants, then they will stop pumping out pollutants. However, like many simple solutions, this is only skin deep, and does not address the problem
adequately.

The first problem lies in the fact that many large scale manufacturing operations, of the type which tend to emit hundreds or thousands of tons of carbon, tend to be on the slim slide, profit wise. Environmental regulations and large corporate taxes make them hard to maintain in the United States. This is why many—as Republicans truthfully point out—have already moved to smoggier pastures with the passing of NAFTA.

Being that the remaining operations in the United States are necessarily less profitable than they once were, it stands to reason that additional taxation could easily push them over the edge, from the black into the red. In a less globalized world, this would be the end and the problem of emission would be solved. However, we live in a world of free trade agreements, and the problem becomes significantly more complicated.

Capital, in our increasingly globalized world, is extremely easy to move, and often moving it does not carry a large tax burden. This effectively means that if a factory is just barely in the red in the United States, it can move to Mexico or China, and leverage the cheap labor and small import taxes of the United States to once more become profitable. This carries along with it its own moral problems of exploitative labor and hurting the American economy in exchange for helping the global economy at large, but we will set those aside for now and focus on emissions.

So our hypothetical factory has moved to, say, China, for the sake of our example. At this point they are operating within an entirely new legal framework. No longer are they bound to even the now laxer rules of the United States Environmental Protection Agency, but instead to the Chinese Ministry of Environmental Protection.

With disasters ranging from the infamous smog of larger Chinese cities to huge explosions on the streets resulting from greased palms signing off on bogus plans, the MEP is not exactly a robust organization. This means that the company which has only just moved overseas can go back to its old ways, and with a few bribes here and there, pollute the environment to its heart’s content in order to grow profit.

In this way, a carbon tax actually serves to set back the progress we’ve made in reducing emissions and cleaning up the environment. The company in question in fact does not reduce the emissions it puts out, as the carbon tax was meant to cause, but instead moves overseas where it can pseudo-legally increase its emissions. By backing a carbon tax, one effectively backs even worse carbon based emissions, and only worsens the climate change that said emissions are causing.

This is hardly the only downside of American businesses moving overseas. Think what you want of the minimum wage of the United States, right to work states, and the like, but it is a fair claim to make that the average factory worker of the United States is significantly less exploited than the average factory worker of China (where, I must remind the reader, companies such as FoxConn have had to put up nets outside of their dormitories in order to stymie suicide attempts).

Furthermore, this arrangement means that the lion’s share of taxes that the company will be paying will go to the Chinese treasury, rather than that of the United States, directly hurting the American economy by reducing its tax base.

To shift gears, the Republican platform actually goes even further in the opposite direction of the carbon tax, seeking to make environmental regulations laxer. The argument continues thusly: supposing that reducing regulations makes a business that has moved to China once again profitable in the United States, then companies will once again move back to the States from abroad. Here they will have to adhere to the laxer-than-now but stricter-than-in-China environmental policies, thus helping the environment. Of course, this argument also relies on the fact that other parts of the Republican platform would also make it less profitable in general for companies to operate oversees; that, however, will be left for another time.

I would be lying if I made the claim that these are the reasons that most Republicans have in attacking the use of the carbon tax. Many, including our nominee, believe that climate change is a lie made up by China in order to damage the United States economy. However, I hope that this presentation of a deeper look at the carbon tax has revealed that it is likely a poor solution to the problem of carbon based emissions. ◊

Benefits of the Carbon Tax

By Michael Pasternak (ME ‘17)

You may have heard of the Carbon Tax as a proposed solution to climate change. What you may not have heard is that, among economists, it’s the preferred solution to climate change. According to a report from The Institute for Policy Integrity at the New York University School of Law from 2015, 77% of economists with relevant publications answered that the US should cut its emissions no matter what actions other countries take, while another 18% said that American emissions cuts would be warranted if many or all other countries commit to reducing theirs. The recent Paris agreement, which established climate mitigation goals with 180 countries, including China and the US, within reason, would satisfy “many or all other countries committing to reducing theirs.” This amounts to an effective 95% of economists with knowledge of the energy economy “supporting action on the climate.” The survey also asked the experts about the most economically efficient method of reducing carbon pollution. Eighty-one percent said a market-based system (carbon tax or cap and trade system) would be most efficient, while 13% answered that coordinated performance standards and programs that prioritize cleaner fuels and energy efficiency would be most efficient.

So why a carbon tax? Simply put, it’s the free market response to hidden costs.

Carbon pollution does cost a lot of money to America, coal pollutants in general even more on top of that. For example, an article in Forbes from 2012 states that, controlled for amount of energy produced, coal is directly responsible for one hundred thousand times more deaths than nuclear, which is the least deadly form of energy in their analysis, closely followed by hydroelectric. A carbon tax is a direct acknowledgement of the reality of the situation, that coal and oil are actually hugely subsidized right now, since the costs of cleanup and health outcomes far outweigh the cheaper energy. A carbon tax simply allows the market to correct for it so that rather than pay for huge oil spills and catastrophic climate change, we’d promote sources of energy without those massive drawbacks.

It’s also worth noting that on a cost basis a carbon tax is almost certainly a pro-nuclear policy. In the US, coal power is followed by nuclear power quite closely in cost per unit of energy produced. In Europe, nuclear energy is actually cheaper than coal. That’s mostly because in Europe many more plants of the same type are built, and at a higher density. Specifically, France is very good at building nuclear plants quickly and cheaply because they are a primarily nuclear energy state. It would be completely reasonable to assume the same process would occur in the US if we follow in the footsteps of Europe and impose a carbon tax on the energy sector.

So why haven’t we? There’s a number of reasons. The first is that our country has an undue amount of influence imposed by moneyed interests, and there’s simply a lot of money already invested in oil and coal. This has led to opposition to renewables from the Right and opposition to nuclear from both sides of the aisle. The Carbon Tax, despite being the single most mainstream economic idea to address climate change, was only proposed by two major politicians in recent memory, Bernie Sanders (whom I believe we all know) and Bob Inglis. Inglis, a Republican, is famously splitting from his party in supporting a “revenue neutral” Carbon Tax. What that would mean is that any proceeds from the tax would be given back to the citizenry through tax rebates for low income farmers, truckers etc. who would feel increased prices in fuel very sharply but may be less able to field those costs. That, I believe, is the reasonable conservative response.

Other critiques of the tax, such as the idea that businesses will simply leave and go to countries without any tax on carbon, simply haven’t been borne out in Europe where carbon taxation already exists. In fact, most analyses show Europe’s energy economy booming following their aggressive response to climate change mitigation. Particularly in France and Denmark, nuclear has essentially replaced coal in baseload generation with renewables providing variable generation to fill in the gaps. There’s a conversation that should be happening about the particulars of the tax, but it’s very clear that in terms of quickly and
effectively addressing the problem, it’s the ideal solution.

So what’s next? We need to pressure our leaders to support nuclear and renewables either through a carbon tax or whatever else our “greatest political minds” can come up with. Sometime in the next couple of weeks (I’ll make sure it’s on Facebook) I will be leading a letter writing campaign on behalf of the New York chapter for the volunteer advocacy group NAYGN (North American Young Generation in Nuclear). Read the letter, and if you agree, sign it! It shows local lawmakers that people actually do care about this stuff and could lead to more positive action like the recent subsidy on nuclear generation in New York state, pushing the conversation towards carbon-free sources of power generation. ◊