The Ticker Quick Views on Politics, Economics and Finance
It makes sense that U.S. federal law forbids the importation of goods produced using forced labor. It makes less sense that a loophole virtually nullifies the rule: A product can't be blocked under the law unless the U.S. makes enough of it to meet domestic needs. In other words, as long as there's a market for the tainted item, it's free to enter.
The provision, within the Tariff Act of 1930, was intended to ensure the U.S. was supplied with exotic goods such as rubber, tea and coffee at a time when those goods were often produced on forced-labor plantations abroad.READ MORE
House Majority Leader Eric Cantor gave a big speech a few months ago in which he ostentatiously set a new tone for House Republicans. Both parties, he said, needed "to put differences aside" to make Washington work.
Yesterday, Cantor's House troops delivered a retort. It turns out they're not much interested in putting aside any differences, thank you very much, and won't be requiring more etiquette lessons. Yes, Republicans killed their own leader's "Helping Sick Americans Now Act." And they killed it even though the bill, which promised a high-risk insurance pool for people with pre-existing conditions, was a free vote with no chance of being enacted. In other words, House Republicans refused even to pretend that they care about the uninsured. In the process, they signaled just how difficult immigration reform will be.READ MORE
Of all the trendy announcements coming out of Google these days (do you really need a new pair of glasses?), one of the most potentially consequential is not getting nearly the attention it deserves. The Internet search behemoth announced last week it would be working with Duke Energy Corp., its North Carolina electricity provider, to purchase renewable energy directly through the power grid.
The plan, laid out by Google in a white paper, calls for the company to be able to purchase power through "renewable energy tariffs." Essentially, these would allow Google to purchase renewable energy directly from the utility company, in this case Duke Energy. (Under the current arrangement, Google basically acts as a broker, buying power from a local renewable-energy provider and then selling it back to the grid.)READ MORE
Supporters of immigration reform are keeping a close eye on Senator Orrin Hatch. The conservative Utah Republican could be a crucial backer of the overhaul measure in the Senate Judiciary Committee next month.
Hatch hasn't made a firm commitment pro or con, though he was involved in some of the behind-the-scenes negotiations and has indicated he would like to support a measure.READ MORE
The Wall Street Journal and the Washington Post’s editorial pages are on the case of the Federal Aviation Administration’s apparent mishandling of the budget sequestration. Why hasn’t the FAA been more flexible about how it cuts its budget? Why did it decide to uniformly furlough 10 percent of air-traffic controllers, even at the country’s busiest air-traffic centers, causing travel delays all around the country?
The Journal and the Post both have good points about how this could be handled better. The FAA’s protest that it must not "pick winners and losers" among its own facilities by prioritizing the busiest ones is lame; that’s exactly what an agency is supposed to do when it cuts its budget. The Post is right to note that equal across-the-board furloughs put the interests of the air-traffic controllers’ union above those of the public. And though the Obama administration disputes that it has the direct legal authority to avoid the delays, it could surely have a standalone legislative fix for air-traffic control, along the lines the Post proposes, if it wanted one.READ MORE
Today, Rhode Island’s state Senate will vote on a bill to legalize same-sex marriage. The bill has already passed the House of Representatives and is widely expected to pass the Senate, after which it will go to Governor Lincoln Chafee, who supports the bill, for signature. Same-sex marriage is coming to Rhode Island. And it's coming despite the fact that the president, majority leader and Judiciary Committee chairman in Rhode Island’s state Senate all oppose same-sex marriage and could have stopped it from coming to a vote.
These opponents gave up because they fear the electoral power of same-sex marriage supporters. One Democrat who was against marriage equality lost a primary in 2012; others won but didn't want to face similar challenges in 2014. WPRI-TV’s Dan McGowan and Ted Nesi report:READ MORE
One of the reasons that pension crises sneaked up on state and local governments over the past few years is that pensions are complicated and their finances are easily misunderstood. If I promise to pay you $100 in 20 years, what sort of expense should I say I incurred this year? Governments have been allowed to come up with all sorts of answers to that question, including “zero.” Two developments this spring push us toward more honest accounting -- but will they matter?
One is a statement from the Bureau of Economic Analysis, which produces the national income and product accounts measuring the size and characteristics of the economy. A major component of the NIPAs is employee compensation, including pensions. The BEA had measured pensions on a cash basis: If a company or a government deposited $10,000 into its pension fund, it was counted as spending $10,000 on pension compensation. But that’s a bad method -- the cash contributions might not line up with actual accrued costs for pensions because, for example, entities sometimes underfund their pension systems.READ MORE
The U.K.'s Conservative Party-led government is losing its head in a rush to appease the anti-European right.
Home Secretary Theresa May told Parliament today that she had signed a legal-assistance agreement with Jordan, in hopes of clearing the way for the deportation of the radical Islamist cleric Abu Qatada.READ MORE
Will Bangladesh's latest industrial accident renew efforts to improve the country's safety record? It should.
An eight-story building housing several garment factories collapsed today outside of Dhaka, killing at least 70 people and injuring about 800. This disaster comes just five months after a fire at the Tazreen garment factory killed more than 100. Since 2005, more than 700 garment workers have died in Bangladesh, according to the International Labor Rights Forum.READ MORE
This week's visit by 168 Japanese lawmakers to a politically charged Tokyo shrine wasn't just dreadful diplomacy; it was dismal economics, too.
Media reports pooh-pooh the event because many of the pilgrimaging officials were low-ranking conservatives. That might be a plausible argument if Deputy Prime Minister Taro Aso hadn't made his own visit over the weekend to Yasukuni Shrine.READ MORE
France has become the 14th country to approve same-sex marriage. It wasn't easy. The 331-to-225 vote in the National Assembly today culminated weeks of sometimes violent protests against the law, an increase in gay-bashing incidents and a general venting of discontent that opponents dubbed the "French Spring," a questionable reference to the pro-democracy movements that overthrew despots across the Middle East in 2010 and 2011.
Some of the feeling of malaise is easy to attribute. After 11 months of office, President Francois Hollande's Socialist government looks increasingly hapless in its efforts to revive the foundering economy. He has promised to restore growth, jobs and competitiveness and to pare back the state and entitlements by means of a vague formula of tax increases and spending cuts that he defines as "rigor" and whose most distinguishing characteristic is that it is somehow the opposite of German-style austerity.READ MORE
Tom Prendergast, who previously ran New York’s subway and bus operations, is the new chairman and chief executive officer of New York’s Metropolitan Transportation Authority. But how long will he stay?
Prendergast is the MTA’s fifth head since 2006. In 2009, the chairman and CEO position was established with a fixed six-year term, in the hopes that a long set tenure would allow the MTA’s head to do long-range planning while resisting political influence.READ MORE
Not a banner day for the Associated Press. The news service's Twitter account sent out this tweet at 1:00 p.m.: "Breaking: Two Explosions in the White House and Barack Obama is injured." Within seconds, the Dow Jones Industrial Average dropped more than 150 points; a few minutes later, realizing the account had been hacked, AP deleted the tweet and suspended its activity on the social platform.
A few takeaways: AP is apparently susceptible to hacking just like anyone else who plugs into the internet to share information. That is really not a surprise. Also unsurprising, the agency was exceptionally forthright in mitigating the damage and explaining the mistake. What is surprising, though, is that Twitter Inc. allows itself to remains subject to these sorts of attacks.READ MORE
“Just push it back a month or two.”
"Given the events of this week, it is important for us to understand the gaps and loopholes in our immigration system."READ MORE
The Senate is currently debating the Marketplace Fairness Act, a law that would make it easier for states to collect online sales tax. Right now, if an Internet seller has no physical presence in the buyer’s state, he doesn’t have to collect tax on the sale. The buyer is legally obligated to report the sale himself and pay “use tax,” usually by disclosing the sale on his state income tax form.
Most people don’t do this. (Be honest: Do you?) So taxes go uncollected.READ MORE
(Corrects name of company where Louis Freeh was a board member.)
Louis Freeh has established himself as a highly regarded corporate sleuth since leaving the top post at the Federal Bureau of Investigation more than a decade ago. It's too bad the public couldn't get someone of similar stature to investigate Fannie Mae, where Freeh once served on the board.
Max Baucus of Montana may be giving some good news to Senate Democratic leaders and the White House.
According to reports, the Senate Finance Committee chairman has decided not to seek a seventh term in 2014. Baucus hasn't always been a reliable vote for Democratic leaders as he sought re-election in his Republican-leaning state. Most recently, Baucus was one of four Democrats to vote against background checks for gun purchases, helping Republicans kill the measure.READ MORE
The FBI isn't the first intelligence agency to come under scrutiny for ignoring leads on young men who later proved to be terrorists. The U.K.'s MI5 faced similar questions after Islamist suicide bombers struck London's subway system on July 7, 2005.
The Federal Bureau of Investigation is under fire for not keeping Tamerlan Tsarnaev, who is accused bombing of Boston Marathon, under surveillance, despite a tip from Russia that he was interested in extremist Islamic groups.READ MORE
The high tide for Keynesian fiscal stimulus came in 2008 and 2009. Panicked governments spent, spent and spent to stem the financial crisis and avoid a depression. But as economies stabilized in 2010 and 2011, governments began to worry about public debt. Enter the austerians. They pressed for fiscal consolidation -- and got their way. One has to look back to the 1940s and 1950s, as nations demobilized from World War II and the Korean War, to see a comparably rapid tightening.
Now, though, the intellectual case for austerity is on its way out -- at least in its vulgar form of immediate cuts to public spending and sharp increases in taxes. Part of the change comes from the implosion of a central claim in an academic paper by Harvard economists Carmen Reinhart and Kenneth Rogoff. They found that nations stop growing when their ratio of public debt to gross domestic product passes a threshold of 90 percent. Their findings were exhibit A for advocates of austerity.READ MORE
The Boy Scouts of America has been all over the map on the issue of gay members and leaders. First, it said it would preserve its policy of excluding homosexuals, which enraged liberals. Then it said it was considering abolishing the policy, which infuriated conservatives.
Now, the organization wants to split the difference and admit gay boys while barring gay leaders. Predictably, that's angered just about everyone. More important, such a policy, if ratified at the Scouts' National Council meeting in mid-May, sends a disturbing message to the gay children now putatively welcome to become Scouts: Come on in, we accept you as you are, just as long as you don't grow up.READ MORE