All posts by Matthew Grattan

Isolationism

By Anthony Passalacqua (CE’18)

To begin, the fact of the matter is that free trade is better from a global perspective than isolationism. By increasing market size and consumer base, it becomes easier and easier for companies to grow, as they have access to global resources and the best of the best in whatever they need to prosper. This, in the end, is good for your everyday man. Unfortunately, we do not live in the ideal world in which this would be the case. So today, I argue for isolationism, and, in general, nationalistic policies. I will use the two terms more or less interchangeably.

The isolationist policy with regard to trade is one based on the tariff, the—dare I say, time honored—practice of heavily taxing imports. In the modern era, tariffs have fallen to the wayside in the United States, as trade deals such as the North American Free Trade Agreement (NAFTA) guarantee there will be no tariffs between the United States, Mexico, and Canada. A similar deal, the Trans Pacific Partnership (TPP), is currently on the table, and whether it is passed or vetoed depends on the results of the current presidential elections. Both candidates, Donald Trump and Hillary Clinton, currently claim that they would not sign off on TPP, though Clinton has a history of supporting it.

This means that the US market is, to some
extent, subject to the will of foreign nations.

On the surface, free trade deals seem like a total good. The idea is that by opening up cheaper markets, prices will go down, and everyone will be able to use their comparative advantage more effectively. However, there is a more sinister underbelly to free trade deals. We put aside how large bodies like the World Trade Organization can cap tariffs, and the ramifications that such caps have on national sovereignty. Instead, we will focus on the fact that free trade is inherently unfair if not all parties in the deal are playing by the same rules. And in deals between the United States and most developing countries, the other guy is certainly not playing by the rules.

What does it mean to say that? The United States, in comparison to the countries like Mexico, China, and Pakistan, has extremely strict workers’ rights laws, on top of stronger environmental regulation, and a higher corporate tax rate. That makes it extremely appetizing for countries to move abroad when free trade deals are signed—as we saw when NAFTA was passed, and as we continue to see with Ford moving its small car division to Mexico.

Under a free trade deal, moving to another country only adds shipping onto the cost of a product, while greatly reducing manufacturing costs, almost always in notably immoral ways. Companies which move abroad can take advantage of the people of the country to which they move, in the same way large companies took advantage of Americans before labor rights laws were passed. These companies can also dodge the stricter environmental and health regulations of the United States, meaning that when they move abroad they can cut corners, at the cost only of their neighbors and the Earth.

In addition, free trade deals, in their own manner, reduce the independence of the United States’ market. Our manufacturing base is smaller, relatively, than it once was, and that means we rely more on imports to get access to the goods that the people want. This gives other nations a form of leverage over the United States, as they can always raise the taxes on their exports and drive up prices in the United States, without getting to the point that it is better for companies to outright return to the United States. This means that the US market is, to some extent, subject to the will of foreign nations.

Besides that, companies moving abroad strictly lowers the tax base of the United States, as the import tax (at its highest, 16%) is a good deal lower than the corporate tax rate of the United States (currently sitting at 35%). Isolationist thought suggests that these two rates should be reversed. Any imported goods, then, must be high enough quality for the people of the US to want to purchase them regardless of their increased price, while every day goods can come from the United States for a similar— or cheaper— price than they do now, owing to the greatly reduced corporate tax rate.

Imagine a scenario in which prices of goods do go up significantly. In that case, it’s all now within the family, so to speak. American workers have more access to jobs which had been gone for the past twenty years since the signing of NAFTA, the corporations are contributing more to the tax base directly, as they cannot as easily pass the price on to the consumer as they can when faced with a tariff, and additional revenue flows to the state in the form of a sales tax for products that are being sold at a higher price than they once were. All this money flowing around the economy contributes to the rate of GDP growth, which has recently been sorely lacking (hovering at around 1% for the last year, and not exceeding 5% in the last 5 years).

So to summarize, what does the nationalistic policy on trade bring us? It brings us prices which are not significantly higher than currently; it adds to the tax base of the United States; it returns jobs to the United States which had left; it subjects companies to stricter environmental, labor, and health regulations; and, importantly, it allows the United States to be more independent from foreign actors than we are currently, by making us less dependent on imports. ◊

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. ◊