Yesterday, the Minister Counselor and I had lunch with two congressional staffers on the Ways and Means Committee. It was one of the more exciting days at work, and not just because we were at a restaurant! They talked mostly about the KORUS FTA, but I had a chance to ask some questions about the U.S. auto industry in general, and the politics surrounding the issue of free trade. Evan and Alex were both really nice and patiently answered all of my questions.
I was thinking that on the one hand, it is an awful time to approach the issue of free trade because people gravitate towards protectionist policies during recessions in an effort to boost domestic markets. On the other hand, it is a great time to ratify free trade agreements because the global community has become (painfully) aware of the degree to which our economies are linked. Paul Krugman didn't win the Nobel Prize for nothing, right?
However, President Obama seems to be preoccupied with Health Care reform and the Energy Bill, which are also really important.
I also met Edward Gresser yesterday! He made a really good point about how the U.S. has some contradictory policies when it comes to the auto industry. For example, there is a 25% tariff on light trucks, which acts as an incentive for automakers to produce more light trucks. However, the government is simultaneously trying to get automakers to produce more fuel efficient vehicles. Why not just get rid of that 25% tariff?
BTW, isn't it interesting that in 1930, there was a 70% tariff on magic tricks and practical joke items?! So silly!
In other news: Brad DeLong blogged about the Fed and Greenspan. Chanda and I love all things Alan Greenspan. We want to adopt him as our grandfather.
I finally finished a report that I have been working on for one of the diplomats at the Embassy. He's such an interesting character. I saw him one Monday and asked, "how was your weekend?" and his response was, "I went to an Aerosmith concert with my friend and we stayed out past 11 PM! I went because I don't know if I'll be able to go once I get a little older..."
HAHA. He's so funny!
Anyway, the report was on tax incentives that motivate employers to hire disabled workers. I won't bore you with the details, but basically, employers can receive tax credits for hiring disabled workers or for making their work place more accessible. The efficacy of these tax incentives are disputed, but there have been arguments that such incentives would distort the labor market and lead to" displacement" and "churning." Displacement is the discrimination against those who will not allow the employer to take advantage of disabled worker tax credits. Churning is the act of replacing older disabled workers with new ones such that the employer would qualify for more tax credits. However, in 2001, the GAO testified before the Committee on Ways and Means and stated that 93% of employers surveyed reported that displacement and churning have little to no cost-effectiveness. So, no such labor market distortions.
Someone at work today said, "I am amazed by the wonderful opportunities and programs that are available to the disabled people in the U.S. (compared to Korea.) But then I wonder, how can the same country have such bad health care?!"
Haha. I thought that was really funny.
Having dinner with DJ Nabs and his wife, Alaka, tomorrow! I can't wait to ask them about the IMF and the World Bank. They're so awesome. I'm jealous.