Remora

I know -- the few readers I have, my friends, do they want another post about boring economics? How about some fun stuff? I was thinking of doing a post about Buffon's proto-pragmatism, knowing that there is overwhelming interest, right now, second only to that in Bond's home run record, in the first book of Buffon's Histoire naturelle and its aggressively anti-Cartesian stance -- but noooooooo - I think I will do this instead.

There's a NYT story today, and a Nation article by the always elegant William Greider, which should be read in conjunction. So that those among us who are opposed to the rule by economist - the decisions of a bunch of pointy headed bureaucrats in the WTO and other assorted international organizations - get a sense of the extent of that rule, right now.

First, the NYT article:
U.S. Will Appeal Tax Ruling After Talks With Europe Fail
essential graf:
The office of the United States trade representative said today that it would appeal a World Trade Organization decision against a tax law that permits American multinational companies to avoid taxes on foreign profits. The law saves companies like Boeing (news/quote) and Microsoft (news/quote) a total of about $4 billion a year.

Then the Nation article The Right and US Trade Law: Invalidating the 20th Century
which takes a look at the unfortunately little known school of Takings theory slithering out of that noxious pit of intellectual error, the University of Chicago, like a snake out of a snake charmer's basket in some old b grade horror movie. The theory, in short, says that government regulation is a form of seizing property, and as such, must be compensated. This is from the same school that encourages limiting liability claims individuals can make on corporations. In other words, it is the school that would allow corporations to make unlimited transfers of cost to third parties. That regulation is justified by social cost is denied completely by this school. It is libertarian theory run mad.

These people, you probably think, are harmless nuts. Unfortunately, as Greider points out, they have quietly influenced the wording of the NAFTA agreement so that it actually embodies takings theory. Why not, since you could never do this democratically. And now, Bush wants to expand his power to make similarly invidious trade agreements. Will the Dems roll over for this? Hard to tell. If anti-WTO organizers are smart, they will definitely try to get the California case Greider mentions - Methanex v. United States - into the spotlight, like in some nice hyped 60 minutes segment. Otherwise, the quiet reaction will proceed apace.