Drew Carey in another installment of his series at Reason.tv takes a swing at the U.S. protectionists' (Obama-types) fear mongering over NAFTA.







Something that's rarely understood by protectionist all over the world is that the biggest source of "job losses" is technology, not free trade agreements. The emergence of Digital Cameras have dented the guys who sell films. small-time Christmas/Vesak-card vendors are feeling the pinch because of SMS. Does this mean these technologies need to be banned, discouraged or taxed away at least until everyone adjusts? Protectionist usually don't say stuff like that.



In all economic activity, whether you buy this soap over that one, or go to KFC instead of McDonald's, you create winners and losers. Should you be fined for picking one over the other? Free Trade (or international trade) just allows you to do this across a political border. There's nothing special about international trade, that isn't also true about domestic trade, except for the fact that governments have introduced barriers. I agree with those who say, that the source of much of protectionist opposition to free trade comes from the fact that in international trade, the trading partner is a "foreigner".



If you haven't already, go See the video. It's drew carey! (I love that end bit)



Related Link :Tyler Cowen : This Global Show must go on



P.S : Now that the primaries are over, Obama is a "pro-growth, free-market guy". Heh.

As readers of this blog would know, I have been trying to figure out what the total tax for petrol and diesel in Sri Lanka. I put the question out in a related article in LBO. Some people responded, you can read them here. I'm reproducing, without permission, the comment by ddm (who, by the way, I wish blogged more) :

given the frequent changes it's hard to keep track, but the best source is the customs website's tariff calculator. It's not 100% up to date but it's the closest freely accessible source of tariff information.

Before the change in May it was something like this;

Petrol - customs duty of Rs.5 per litre and a surchage of 10% on this Rs. 5 which makes it R.s 5.50 per litre. Excise duty of Rs. 20 per litre, VAT 15% (in the last budget it was brought down to 5% but I'm not sure where this stands at the minute), Ports and Airports levy 3% and social responsibility levy of 1.5%. This is when petrol is completely imported as it is done by LIOC.

So if petrol costs Rs. 127 per litre CIF, the taxes on this would be Rs.38 at 5% VAT at Rs. 57 at 15% VAT.

According to Customs there are no tariffs, VAT, or any other levies on crude oil imports - and CPC refines 50% of its petroleum from crude oil imports (but still pays the VAT, excise on the petrol retail price).

For Diesel, again prior to changes in March, there was no customs duty or VAT, there was a Rs. 2.50 per litre excise duty, 3% PAL and 1.5% SRL.

But do check out www.customs.gov.lk - it's a great eye opener about how restrictive our import regime is. [link]

So, according to this, before the increase in May (Which was a whopping 37% for Diesel and some 23% for Petrol) The total tax is about 30% of the retail price of petrol at 5% VAT and about 44% at 15% VAT. TheIndian article, which quotes an Association of Indian Chamber of Commerce official is probably just about right when they say the total tax for petrol in Sri Lanka comes to about 37% of the retail price. That's high.

More on petroleum on deaned.

p.s. : Blogging is slow these days. I'm suddely very busy and everytime I do blog, I can think of 100 other things I "should" be doing. So this doesn't update often, don't be suprised.

Yet another one of those global warming hypocrisies, this time from the patron saint himself.

In the year since Al Gore took steps to make his home more energy-efficient, the former Vice President’s home energy use surged more than 10%, according to the Tennessee Center for Policy Research.

“A man’s commitment to his beliefs is best measured by what he does behind the closed doors of his own home,” said Drew Johnson, President of the Tennessee Center for Policy Research. “Al Gore is a hypocrite and a fraud when it comes to his commitment to the environment, judging by his home energy consumption.”

In the past year, Gore’s home burned through 213,210 kilowatt-hours (kWh) of electricity, enough to power 232 average American households for a month.

In February 2007, An Inconvenient Truth, a film based on a climate change speech developed by Gore, won an Academy Award for best documentary feature. The next day, the Tennessee Center for Policy Research uncovered that Gore’s Nashville home guzzled 20 times more electricity than the average American household.

After the Tennessee Center for Policy Research exposed Gore’s massive home energy use, the former Vice President scurried to make his home more energy-efficient. Despite adding solar panels, installing a geothermal system, replacing existing light bulbs with more efficient models, and overhauling the home’s windows and ductwork, Gore now consumes more electricity than before the “green” overhaul.

Since taking steps to make his home more environmentally-friendly last June, Gore devours an average of 17,768 kWh per month –1,638 kWh more energy per month than before the renovations – at a cost of $16,533. By comparison, the average American household consumes 11,040 kWh in an entire year, according to the Energy Information Administration. (read more)

What's the call-back procedure for the Nobel Peace Prize?

This really touched me..

Bono, lead singer of the rock band U2, is famous throughout the entertainment industry for being more than just a little self-righteous.

At a recent U2 concert in Glasgow, Scotland, he asked the audience for total quiet.

Then, in the silence, he started to slowly clap his hands, once every few seconds. Holding the audience in total silence, he said into the microphone, 'Every time I clap my hands, a child in Africa dies.'

From the front of the crowd a voice with a broad Scottish accent pierced the quiet ...

'Well, fookin' stop doin it then, ya evil bastard!' [link]

in all the funny places...

Unlike his Sri Lankan counterpart (who, in his defence doesn't have a clue about these things) the finance minister of Pakistan, Sayed Naveed Qamar, has admited that government is responsible for inflation in that country, which stands about an "all time high" of 11% (Sri Lankan inflation is at about 26% under a supressed index). Here's an excerpt from his budget speech :

There was a phenomenal build‑up in subsidies in the budget, which are largely responsible for this huge deficit. These subsidies, totaling Rs. 407 billion include; petroleum Rs. 175 billion; electricity Rs. 133 billion; wheat Rs. 40 billion, and textiles and fertilizers Rs. 48 billion, of which only Rs. 114 billion were provided in the budget;

(6) Largely due to an exceptionally high fiscal deficit, balance of payments is facing unprecedented deficit as well. The current account deficit is projected at $ 11.9 billion or 7 % of GDP;

(7) Reserves have declined from a high of $ 16.5 billion in October, 2007 to less than $ 12.3 billion as at end April 2008. This has put pressure on the exchange rate which has depreciated by nearly 6.4 % during July 2007 to April 2008;

(8) Much of the deficit had to be financed from borrowing from the State Bank, which is like printing more money. As much as Rs. 551 billion (up to May 2008) have been borrowed from the central bank, which is unprecedented in country's history. It is not difficult to imagine what this printing of money means. With more money and no new production, only prices are likely to increase, which is what is happening. We have to stop this process otherwise the inflation will be running much higher than what it is at present, and as I noted it is already highest in country's history. [link] (emphasis mine)

Monetary policy, especially when there is no central bank indepdence (like in Sri Lanka, possibly even Pakistan) is inevitably linked to fiscal policy. At least Naveed Qamar has the good sense to admit that. Someone forgot to tell this to Sri Lankan policymakers.