As the World runs

China adopted the stance which had to be expected: preserving the Trade barriers on those Products where she expresses weakness–namely Food. The was the exact area where Food Dollars would have flowed out of China, as fast as Trade Dollars flow into the Country. It joined with India in maintenance of the safeguard tariffs for Agriculture. It was a sensible position for India to assert, but a decidedly insecure one for China; new wealth there will incite the flow of American Dollars out, high tariffs or not. The Chinese will gain massive amounts of Tax revenues, though, while enjoining an excessive of Social Unrest from their own Population (who are now committed intellectually to the Market ideal). The Communists should realize that they may become an Endangered Species.

This Bill was a dead Skunk before Bush signed it this morning, and all the horror stories spoken by the Economists over the last several years will come true. Fannie and Freddie will still be flapping in the Wind, on unsteady stilts which they claim is a foundation. The Treasury will be shackled to a dead weight that the CBO claims 35% of which will fail anyway. The law raises the National Debt level above $10 trillion, with the Expectation by Everyone that ordinary Spending will be almost a half-trillion dollars in the Red; all due to Democrats and Republicans refusal to accept adequate Taxation. Everyone suggests this law will cost the Treasury only around $68 bn, but you will find the likely Cost in the Allowance Limit of $300 bn. This puts the debacle at three times the Proscription D provision of Social Security. Friend Arnold Kling proclaims that health care spending is the greatest danger in America today; I would say it was his old Employers.

Is it True? Felix Salmon asks this Question, supplying all versions of the controversial material. An old farmer from Nebraska (Me, or more specifically my deceased Father) can assure that the Feed and Seed Costs are very real. The weakness of the Dollar can be attributed to poor economic policies advanced by the federal Government and financial institutions of the last 7 years; the 20% Food Cost increase due to Inflation especially True. I would loosely estimate that the higher Grain prices raised the Cost of Fed Beef by $170/head, Pork by $95/head, and Poultry by about $2/head. Ethanol subsidies made up at least 30% of the increased Pricing for Grains. They incited a reduction of Wheat acres sown, so also contributed substantially to the Price of Flour and Bread products. Even Bob Zoellick could not hide this reality. lgl