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Big Banks Plead Guilty to Collusion, But Fines are Pocket Change

Mother Jones

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Five of the planet’s biggest banks have finally been forced to plea guilty to collusion charges in the foreign exchange market:

The Justice Department forced four of the banks — Citigroup, JPMorgan Chase, Barclays and the Royal Bank of Scotland — to plead guilty to antitrust violations in the foreign exchange market as part of a scheme that padded the banks’ profits and enriched the traders who carried out the plot….Underscoring the collusive nature of their contact, which often occurred in online chat rooms, one group of traders called themselves “the cartel,” an invitation-only club where stakes were so high that a newcomer was warned, “Mess this up and sleep with one eye open.” To carry out the scheme, one trader would typically build a huge position in a currency and then unload it at a crucial moment, hoping to move prices. Traders at the other banks agreed to, as New York State’s financial regulator put it, “stay out of each other’s way.”

….The guilty pleas, which the banks are expected to enter in federal court later on Wednesday, represent a first in a financial industry that has been dogged by numerous scandals and investigations since the 2008 financial crisis. Until now, banks have either had their biggest banking units or small subsidiaries plead guilty.

….As part of the criminal deal with the Justice Department, a fifth bank, UBS, will plead guilty to manipulating the London Interbank Offered Rate, or Libor, a benchmark rate that underpins the cost of trillions of dollars in credit cards and other loans.

The total fine is about $5 billion, and it’s about damn time this happened. Unfortunately, I assume that a billion dollars each is basically pocket change that’s already been fully reserved on their balance sheets. Needless to say, not a single dime of this will hit the actual people running the banks, who couldn’t possibly be expected to know that any of this stuff was going on. They were too busy drinking their lunches and remodeling their corner offices to know what a few rogue traders on the 23rd floor were doing. The Times confirms that life will go on as usual:

For the banks, though, life as a felon is likely to carry more symbolic shame than practical problems. Although they could be technically barred by American regulators from managing mutual funds or corporate pension plans or perform certain other securities activities, the banks have obtained waivers from the Securities and Exchange Commission that will allow them to conduct business as usual. In fact, the cases were not announced until after the S.E.C. had time to act.

It’s good to be king.

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Big Banks Plead Guilty to Collusion, But Fines are Pocket Change

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These 3D maps of coral reefs are totally rad

These 3D maps of coral reefs are totally rad

By on 14 May 2015commentsShare

We live in a time of strange contradictions: Many of us carry around highly sophisticated, GPS- and camera-equipped supercomputers just to play 2048 on the bus, while a lot of science is still limited by rudimentary tools and a lack of information. This is especially true for marine sciences (perhaps in part because water and electronics don’t always play well together). From Wired:

“It’s crazy how behind the times we are,” says Sly Lee, a former biological science technician for the US National Park Service and founder of the Hydrous, a science communication non-profit. “We can decode coral genomes, but we can’t accurately track how fast the corals are degrading.”

Part of the problem with keeping track of coral degradation is that we lack a good yardstick — how do you measure the size of an irregularly shaped, many-branched staghorn colony? How do you track the exact hue from healthy to bleached? At the moment, it usually involves a literal yardstick — scuba diving scientists use measuring tapes to survey huge patches of irregular coral.

So Lee is testing a new way to map individual coral colonies by their size, color, and texture, and create 3D models that scientists can examine cheaply in a lab. Last winter, Lee went to the Maldives — site of a recent large bleaching event — to test his new tool:

Lee dove with a waterproof camera to take nearly 200,000 images of the reefs from every angle. Then he uploaded the photos to Autodesk rendering software, stitching them together into a high-resolution model. Later this year, he’ll return to the same corals, then use the before-and-after visualizations to see exactly how they have fared.

Here’s a video of one table coral modeled in Lee’s software:

Once the software is online and openly accessible, anyone should be able to upload their coral footage to the system. So hello, waterproof casing, goodbye, guestimation.

Source:
3-D Mapping the World’s Corals to Track Their Health

, Wired.

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These 3D maps of coral reefs are totally rad

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China’s Future, Take 2

Mother Jones

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After writing my post this morning about China’s economic future, I got an email response from an American who lived there for nearly two decades and had a different perspective on what China’s biggest problem might be going forward. Obviously this is just one person’s opinion, and I can’t independently vouch for it, but I thought it was interesting enough to share. Here it is:

I read with interest your musings on the future of China. As it happens, I lived for 17 years in Beijing, married, and started a family there.

I believe the macro-level statistics and phenomena you discuss are all trailing indicators. I left China with my family almost five years ago as a large number of interrelated quality-of-life issues became increasingly unbearable. Those factors have continued to worsen since then at an accelerating rate, to the point where the economy is now largely driven by people trying to earn or steal enough money to leave.

The once-thriving expat community in Beijing has shriveled to nearly nothing. The cost of living is approaching world-capital (NY, London, Tokyo, etc.) levels for a miserable existence. The local culture has become increasingly desperate and cutthroat. And Beijing is one of the more attractive places in China to live, work, and raise a family.

People, generally, and Chinese especially, will tolerate all sorts of deprivation in service of a better future for their children. And that is largely what has driven the rapid pace of Chinese development since the end of the Cultural Revolution and the beginning of Deng Xiaoping’s opening and reform policies. My feeling is that biggest challenge ahead for China is when the population at large concludes that a better future for their children is no longer in the cards.

When it happens, it will happen gradually, then suddenly. And what happens after that, no one can say, but a continuation of the policies driving hyper-accelerated GDP growth over all else probably isn’t it.

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China’s Future, Take 2

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Why Do We Give Medical Treatment That Increases Patients’ Chances of Dying?

Mother Jones

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While Kevin Drum is focused on getting better, we’ve invited some of the remarkable writers and thinkers who have traded links and ideas with him from Blogosphere 1.0 to this day to contribute posts and keep the conversation going. Today we’re honored to present a post from Aaron E. Carroll.

I saw this study a few weeks ago on blood pressure treatment for nursing home residents, and I almost ignored it. There are so many like it. But it’s just ridiculous that this kind of stuff continues, and that we can’t seem to do anything about it.

We know that in many people, high blood pressure is bad. We therefore try and do things to lower it. But then we go ahead and decide that if lowering blood pressure in some people is good, it must be good for everyone. In frail, elderly people, however, there’s no evidence for this—and there may be evidence that lowering blood pressure is a bad idea. But that runs counter to what we’ve always been told, so many ignore it.

This was a longitudinal study of elderly people living in nursing homes, meaning that the authors recruited people there and then followed them for about two years. They were interested in seeing how different aspects of care were related to the subjects’ chance of dying. Almost 80 percent of them were being treated for high blood pressure (in spite of the above). A previous analysis of this study had shown that blood pressure was inversely related to all-cause mortality “even after adjusting for several confounders, such as age, sex, history of previous cardiovascular (CV) disease, Charlson Comorbidity Index score, cognitive function (Mini-Mental State Examination), and autonomy status (activities of daily living).” This study went further, to look at whether being on lots of drugs for high blood pressure was bad—even after controlling for the blood pressure relationship.

Patients in this study were on an average of seven drugs and were on at least two drugs for high blood pressure.

What the study found, to no one’s real surprise, is that the people on two or more blood pressure medications who had a systolic blood pressure of less than 130 mm Hg had a significantly higher all-cause mortality. This held true even after additionally adjusting for propensity score–matched subsets, other cardiovascular issues, and the exclusion of patients without a history of hypertension who were receiving BP-lowering agents.

We know that there’s evidence that keeping blood pressure lower in this population might be bad. Yet, many of these patients were not only being treated for “high” blood pressure—many were on multiple medications for it. Those on more medications (i.e. more treatment) were more likely to die.

Here’s the kicker: This wasn’t a study done in the United States. It was done in France and Italy—so this isn’t me bashing on the US health care system. It’s a problem that’s writ large. We find something that is bad. We find that lessening it is better. We then start to lessen it even more. Soon we’re trying to lessen it for everyone. We’re saying it’s too high in all populations, even when we don’t have evidence that’s true. We say it even as evidence builds that less is bad for lots of people.

Better clinical decision support might help, but we can’t seem to get that in electronic health records, and doctors hate those anyway. Many are still unaware that guidelines even exist.

And then when things get really bad, we act as if we weren’t to blame. From an editorial in JAMA:

It is surprising that among frail elderly patients with a systolic blood pressure less than 130 mm Hg (20 percent of the studied group), the use of multiple antihypertensive drugs was continued, because few evidence-based data support this approach.

Really? It’s surprising?

Getting doctors to change their behavior is hard, and getting them to stop doing something may be even harder. But all of this is important, and it’s part of why health services research is so critical.

A final note: Even when I’m upset about some aspects of medicine, I’m grateful for so many others—like the ones helping Kevin right now. I’m crazy about health care. I’ll keep poking it with a stick. That’s how I show my love.

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Why Do We Give Medical Treatment That Increases Patients’ Chances of Dying?

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Why Would an Economic Analysis Want to Ignore American Slavery?

Mother Jones

While Kevin Drum is focused on getting better, we’ve invited some of the remarkable writers and thinkers who have traded links and ideas with him from Blogosphere 1.0 to this day to contribute posts and keep the conversation going. Today we’re honored to present a post from Ryan Cooper, national correspondent for the Week.

The next several years will see a rolling 150th anniversary of Reconstruction, my favorite period in American history. From about 1865 to 1877, American society as a whole tried reasonably hard to do right by the freed slaves, before getting tired of the effort and abandoning them to the depredations of racist terrorism. For the next nine decades, black Americans had few if any political rights under the boot heel of Jim Crow.

It’s both a shining example of what can happen when a society really tries to right a past wrong, and tragic, infuriating failure of will. But most of all it’s very interesting. Things were changing, social orders were being overthrown, historical ground was being broken. At a time when few nations had any suffrage at all, roughly 4 million freed slaves got the vote in a single stroke, perhaps the single starkest act of democratic radicalism in world history.

So it’s weirdly fascinating to read conservative historiography of the 19th century, such as this piece by Robert Tracinski at the Federalist, as an example of how Darryl Worley-style historiography irons all the best parts out of American history.

He’s interested in trying to prove that a “non-coercive” economy is possible, by which he means that taxes and spending could be dramatically lower than they are today. Thus he charts government spending as a percentage of GDP, finds that it was pretty low for most of the 19th century, and claims victory:

What the left wants is not just to make America’s economic history disappear. It needs to make America’s political system disappear: to make truly small, truly limited government seem like a utopian fantasy that can safely be dismissed. Please bear in mind that this latest example came up in the context of a discussion about the justification for government force. So what they want to describe as an unrealistic fantasy is a society not dominated by coercion.

One might think that when writing a paean to a noncoercive century, it might be a good idea to address the fact that for 60 percent of that century, it was government policy that human beings could be owned and sold like beasts, or that half or more of the national economy was based on that institution. But no, the word “slavery” does not appear in the piece. Neither does “Civil War” or “Reconstruction,” which as a literal war against and military occupation of the South would seem fairly coercive.

So speaking of the 19th century as one notably free of coercion is not just utterly risible, it’s also a cockeyed way to look at what was good or bad about it. The economy of the antebellum South was founded on the labor of owned human beings, extracted through torture. Slave masters set steadily increasing quotas for cotton picking, for instance, and would flog slaves according to the number of “missing” pounds. As Edward Baptist writes, they thus increased the productivity of slave cotton-picking by nearly 400 percent from 1860 to 1865.

It was akin to the Gulag system of Soviet Russia, except that it had all the power of the red-hot Industrial Revolution, including cutting-edge financial technology, behind it. That combination of slavery plus explosive economic growth and innovation made the antebellum South one of the most profoundly evil places that has ever existed — one that was an absolutely critical part of early industrial growth in both Britain and the North.

But on the other hand, the war that ended slavery, despite involving coercion in the form of organized mass killing, was therefore good! And so was Reconstruction, even though that involved extremely harsh measures against the likes of the KKK. Whether coercion is good or bad depends on just who is being coerced and why.

And that, in turn, puts the lie to conservative complaints that liberals always “blame America first.” On the contrary, grappling with the pitch-black periods of history makes the positive notes shine all the brighter. As Ta-Nehisi Coates has written, the “epoch of slavery is…the quintessential romance of American history.” It’s just a romance difficult to detect in the GDP statistics.

Link: 

Why Would an Economic Analysis Want to Ignore American Slavery?

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Tales From City of Hope #13: Badass Blogger Edition

Mother Jones

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My white blood count is now up to 2.4. More importantly, my ANC level is up to 2000. ANC is the front line of my immune system, and any number above 1000 means it’s working adequately. So if you’re sick and you sneeze on me, you are no longer likely to kill me. You’ll just give me a cold.

So I’m basically out of the woods. But not entirely. I have months of recuperation ahead, and complete success won’t be confirmed until a follow-up biopsy in 60 days. And then I have a difficult decision about whether I should enter maintenance therapy.

In the meantime, one of my sister’s graphic arts pals whipped up the image on the right. It is titled “Kevin the Badass Blogger” and available in a limited edition to those savvy enough to copy stuff from the internet. For extra credit: can you figure out whose body I’ve been shopped onto?

And speaking of images, last night I thought I’d try to improve things around here by downloading Photoshop Express to replace the crappy freeware image editing app I’ve been using. So I did. But apparently PE works only with a keyboard and mouse. It has no touch support. In 2015. WTF?

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Tales From City of Hope #13: Badass Blogger Edition

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Tales From City of Hope #10: Rebound Is Here!

Mother Jones

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Yesterday my white blood count was <0.1. How much less? No telling, but my doctor called it an “honorary” 0.1.

But! Today my count is 0.1. Not much difference, you say, but it doesn’t matter. It’s higher than yesterday, and that means my transplanted stem cells are busily engrafting themselves and morphing into various blood products. Progress will be slow at first, but Friday was officially my bottom. Within a few days, my counts should start taking off much more rapidly. Huzzah.

In less good news, I slipped in the bathroom last night and got a pulled neck muscle and a black eye for my trouble. All I need now is a swastika tattoo and I’ll have the whole skinhead look down cold.

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Tales From City of Hope #10: Rebound Is Here!

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How Humans Can Keep Superintelligent Robots From Murdering Us All

Mother Jones

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While Kevin Drum is focused on getting better, we’ve invited some of the remarkable writers and thinkers who have traded links and ideas with him from Blogosphere 1.0 to this day to contribute posts and keep the conversation going. Today, we’re honored to present a post from Bill Gardner, a health services researcher in Ottawa, Ontario, and a blogger at The Incidental Economist.

This weekend, you, I, and about 100 million other people will see Avengers: Age of Ultron. The story is that Tony Stark builds Ultron, an artificially intelligent robot, to protect Earth. But Ultron decides that the best way to fulfill his mission is to exterminate humanity. Violence ensues.

You will likely dismiss the premise of the story. But in a book I highly recommend, Oxford philosopher Nick Bostrom argues that sometime in the future a machine will achieve “general intelligence,” that is, the ability to solve problems in virtually all domains of interest. Because one such domain is research in artificial intelligence, the machine would be able to rapidly improve itself.

The abilities of such a machine would quickly transcend our abilities. The difference, Bostrom believes, would not be like that between Einstein and a cognitively disabled person. The difference would be like that between Einstein and a beetle. When this happens, machines can and likely would displace humans as the dominant life form. Humans may be trapped in a dystopia, if they survive at all.

Competent people—Elon Musk, Bill Gates—take this risk seriously. Stephen Hawking and physics Nobel laureate Frank Wilczek worry that we are not thinking hard enough about the future of artificial intelligence.

So, facing possible futures of incalculable benefits and risks, the experts are surely doing everything possible to ensure the best outcome, right? Wrong. If a superior alien civilization sent us a text message saying, “We’ll arrive in a few decades,” would we just reply, “OK, call us when you get here—we’ll leave the lights on”? Probably not—but this is more or less what is happening with AI…little serious research is devoted to these issues…All of us…should ask ourselves what can we do now to improve the chances of reaping the benefits and avoiding the risks.

There are also competent people who dismiss these concerns. University of California-Berkeley philosopher John Searle argues that intelligence requires qualities that computers lack, including consciousness and motivation. This doesn’t mean that we are safe from artificially intelligent machines. Perhaps in the future killer drones will hunt all humans, not just Al Qaeda. But Searle claims that if this happens, it won’t be because the drones reflected on their goals and decided that they needed to kill us. It will be because human beings have programmed drones to kill us.

Searle has made this argument for years, but has never offered a reason why it will always be impossible to engineer machines with autonomy and general intelligence. If it’s not impossible, we need to look for possible paths of human evolution in which we safely benefit from the enormous potential of artificial intelligence.

What can we do? I’m a wild optimist. In my lifetime I have seen an extraordinary expansion of human capabilities for creation and community. Perhaps there is a future in which individual and collective human intelligence can grow rapidly enough that we keep our place as free beings. Perhaps humans can acquire cognitive superpowers.

But the greatest challenge of the future will not be the engineering of this commonwealth, but rather its governance. So we have to think big, think long-term, and live in hope. We need to cooperate as a species and steer our technological development so that we do not create machines that displace us. At the same time, we need to protect ourselves from the expanding surveillance of our current governments (such as China’s Great Firewall or the NSA). I doubt we can achieve this enhanced community unless we also find a way to make sure the superpowers of enhanced cognition are available to everyone. Maybe the only alternative to dystopia will be utopia.

From: 

How Humans Can Keep Superintelligent Robots From Murdering Us All

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White People Could Learn a Thing or Two About Talking About Race From the Orioles’ Manager

Mother Jones

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On Wednesday, after the Baltimore Orioles trounced the Chicago White Sox in front of over 48,000 empty seats at Camden Yards, Orioles’ manager Buck Showalter offered a blunt assessment of the ongoing protests happening just beyond the stadium gates.

More coverage of the protests in Baltimore.


Eyewitnesses: The Baltimore Riots Didn’t Start the Way You Think


Obama: It’s About Decades of Inequality


Rand Paul: Blame Absentee Fathers


What MLK Really Thought About Riots


Photos: Residents Help Clean Up


Orioles Exec: It’s Inequality, Stupid


These Teens Aren’t Waiting Around for Someone Else to Fix Their City


Ray Lewis: “Violence Is Not the Answer”


Bloods and Crips Want “Nobody to Get Hurt”

When a Baltimore resident asked what advice Showalter would give to young black residents in the community, the manager explains emphasis added:

You hear people try to weigh in on things that they really don’t know anything about. … I’ve never been black, OK? So I don’t know, I can’t put myself there. I’ve never faced the challenges that they face, so I understand the emotion, but I can’t. … It’s a pet peeve of mine when somebody says, ‘Well, I know what they’re feeling. Why don’t they do this? Why doesn’t somebody do that?’ You have never been black, OK, so just slow down a little bit.

I try not to get involved in something that I don’t know about, but I do know that it’s something that’s very passionate, something that I am, with my upbringing, that it bothers me, and it bothers everybody else. We’ve made quite a statement as a city, some good and some bad. Now, let’s get on with taking the statements we’ve made and create a positive. We talk to players, and I want to be a rallying force for our city. It doesn’t mean necessarily playing good baseball. It just means doing everything we can do. There are some things I don’t want to be normal in Baltimore again. You know what I mean? I don’t. I want us to learn from some stuff that’s gone on on both sides of it. I could talk about it for hours, but that’s how I feel about it.

Fans watched from outside the stadium gates after demonstrations in response to the death of Freddie Gray forced the team to play the first game behind closed doors in Major League Baseball history. At Wednesday’s press conference, outfielder Adam Jones, who related to the struggles of Baltimore’s youth as a kid growing up in San Diego, called on the city to heal after the unrest.

Jones goes on to say:

The last 72 hours have been tumultuous to say the least. We’ve seen good, we’ve seen bad, we’ve seen ugly…It’s a city that’s hurting, a city that needs its heads of the city to stand up, step up and help the ones that are hurting. It’s not an easy time right now for anybody. It doesn’t matter what race you are. It’s a tough time for the city of Baltimore. My prayers have been out for all the families, all the kids out there.

They’re hurting. The big message is: Stay strong, Baltimore. Stay safe. Continue to be the great city that I’ve come to know and love over the eight years I’ve been here. Continue to be who you are. I know there’s been a lot of damage in the city. There’s also been a lot of good protesting, there’s been a lot of people standing up for the rights that they have in the Constitution, in the Bill of Rights, and I’m just trying to make sure everybody’s on the same page.

It’s not easy. This whole process is not easy. We need this game to be played, but we need this city to be healed first. That’s important to me, that the city is healed. Because this is an ongoing issue. I just hope that the community of Baltimore stays strong, the children of Baltimore stay strong and gets some guidance and heed the message of the city leaders.

Like team exec John Angelos, Showalter, Jones and the rest of the Orioles organization get it.

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White People Could Learn a Thing or Two About Talking About Race From the Orioles’ Manager

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How to Really Think About Major Trade Deals Like the Trans-Pacific Partnership

Mother Jones

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While Kevin Drum is focused on getting better, we’ve invited some of the remarkable writers and thinkers who have traded links and ideas with him from Blogosphere 1.0 to this day to contribute posts and keep the conversation going. Today we’re honored to present a post from Matt Yglesias, currently the executive editor of Vox.

There is almost nothing in the whole wide world that economists like better than recounting David Ricardo’s basic case for free trade. And this is sort of understandable. It’s a really cool idea!

If you don’t believe me, check out Paul Krugman’s 1995 essay on the subject. But for the dime store version, what Ricardo showed—and what economists have been enthusing about ever since—is that Country A benefits (in the sense of what’s nowadays known as Kaldor-Hicks Efficiency) from opening up its domestic producers to competition from imports from Country B, even if Country B is better at producing everything.

It’s a cool result.

But oftentimes enthusiasm for this result seems to lead Ph.D. economists into all kinds of wild irrelevancies like former Council of Economic Advisors Chair Greg Mankiw’s enthusiastic endorsement of the Trans-Pacific Partnership. Mankiw focuses on Adam Smith rather than Ricardo, but in both cases the point is the same—18th-century economists showed that the efficiency of an economy can be improved by opening itself up to imports from abroad.

This is very true, but it also tells us very little about the merits of a 21st-century trade agreement.

One huge flaw is that while classical economics has a fair amount to tell us about the wealth of nations, it doesn’t say much at all about the wealth of the individual people inside the nations. A trade deal that enriches Americans who own lots of shares of stock and Central Americans who own lots of plantation land could easily pass the (low) economic bar of efficiency while still making most people worse off.

But an even bigger problem is that many of the biggest barriers to international trade don’t come conveniently labeled as barriers to international trade.

Take the Jones Act here in the United States, which says that if you want to ship goods on a boat from one American port to another American port, you need to do so on boats constructed in the United States and owned by US citizens, staffed by US citizens and legal permanent residents, and crewed by US citizens and US permanent residents. Common sense says that this is protectionism for American ship owners, shipyards, and ship crews.

But the actual text of the Jones Act says otherwise. What the 1920 law says is that a merchant marine “sufficient to carry the waterborne domestic commerce…of the United States” is “necessary for the national defense.” In other words, we dare not let foreign-owned ships outcompete domestic ones as a matter of national security.

Conversely, if you look at Japan’s legendarily protected domestic automobile market you will find essentially nothing in the way of formal barriers to foreign trade. Tariffs on imported automobiles, for example, are currently at zero. The way it works, according to the American Auto Council, is that “Japan has used automotive technical regulations as a means to protect local markets by creating excessively difficult and costly regulatory and certification requirements, with little or no safety or emissions benefits.”

That these regulations are mere protectionism is overwhelming conventional wisdom in the United States. But of course, proponents of the Japanese status quo no more see it that way than do proponents of the Jones Act here at home. These are necessary regulations! This is the dilemma of the modern trade agreement.

Smith and Ricardo never imagined a world in which governments routinely regulated large classes of products to promote consumer safety, workers’ rights, environmental goals, or national security goals. But lurking behind every regulation is potentially a barrier to trade. What the US Food and Drug Administration sees as public health regulation of dangerous cheese bacteria looks like protectionism to French cheesemakers, and what European Union officials see as public health regulation of hormone-treated beef looks like protectionism to American ranchers.

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How to Really Think About Major Trade Deals Like the Trans-Pacific Partnership

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