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Carolina Journal Radio No. 769: Pipeline fund generates controversy

Carolina Journal Radio / Donna Martinez and Mitch Kokai
The Truth Network Radio
February 12, 2018 12:00 am

Carolina Journal Radio No. 769: Pipeline fund generates controversy

Carolina Journal Radio / Donna Martinez and Mitch Kokai

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February 12, 2018 12:00 am

Gov. Roy Cooper’s administration ended months of speculation by approving a key water-quality permit for the Atlantic Coast Pipeline. While complaints from environmental activists grabbed headlines, Cooper also raised eyebrows by announcing the creation of a new fund totaling nearly $58 million. Cooper says the money can fund more than just mitigation of the pipeline’s environmental impact. The funds might also pay for economic development and renewable energy projects. Critics contend this money represents a “slush fund.” Rick Henderson, Carolina Journal editor-in-chief, analyzes the pipeline’s latest developments. Much has changed in N.C. politics during the past 19 years. The “NC SPIN” program has documented those changes for television viewers across the state. Now, after celebrating the milestone of its 1,000th episode, “NC SPIN” has moved to a new home on UNC public television. Program creator and moderator Tom Campbell shares insights from following the state’s political developments for the past two decades. A 2017 data breach has prompted policy changes at the N.C. Department of Health and Human Services. During a recent legislative review of those changes, Rep. Nelson Dollar, R-Wake, questioned HHS Secretary Mandy Cohen about accountability. Driverless cars are on their way to N.C. highways. The state Department of Transportation is devoting some attention now to issues that must be addressed to accommodate those cars. Kevin Lacy, state traffic engineer, outlined some key questions N.C. DOT is considering as it ponders a future with driverless cars, also known as “autonomous vehicles.” President Trump wants new tariffs on foreign-made washing machines, solar panels, and other items. These tariffs would amount to a tax on American consumers. Roy Cordato, John Locke Foundation senior economist, explains why these tariffs represent a bad approach to public policy.


From chair to current and the largest city in the statehouse into the schoolhouse Carolina Journal radio your weekly news magazine discussing North Carolina's most public policy events and issues welcome to Carolina Journal radio why Michiko got during the next hour, Donna Martinez and I will explore some major issues affecting our state. Much is changed in North Carolina politics over the past 19 years the C-SPAN television program is been there to document those changes. The founding host joins us to mark a recent milestone and to promote MC spends new broadcast home.

A data breach of the state Department of Health and Human Services generated big headlines in 2017. Miller why some lawmakers are now calling for increased accountability. Driverless cars are on their way to North Carolina state Department of Transportation is preparing the state traffic engineer outlines key questions DOT must address edible here a free market economists concerns about Pres. trumps proposed tariffs on washing machines and solar panels will explain why American consumers would end up being the big losers whose topics are just a headfirst Donna Martinez joins us with the Carolina Journal headline question surrounded $57.8 million fund that's part of a deal that grants permission for the Atlantic coast pipeline to be built through eastern North Carolina. The payment from the four utilities that are building the pipeline was announced minutes after the Cooper administration authorized pipeline permits Carolina Journal has been digging into this deal.

This memorandum of understanding and the fund and Rick Henderson joins me now. Rick of course is editor-in-chief. Welcome back.

Thank you alright so the compartment estate administration approves the pipeline and there's a lot of question about particularly from some in the governor's own party on the left that down.

Environmentalists said hate this probably is in a really good idea but they decided to go ahead.

That's correct. Pipeline there was a big divide among Democrats about this because an awful lot of Democrats who are interested in the development, especially in the Ellis prosperous areas along the route of pipeline proposal were saying this is huge because it's gonna deliver a lot of natural gas. These communities that don't have access to large volumes of it and that might help with economic development. On the other hand, there were the environmentalists who were saying this is simply increasing or extending the lifespan of fossil fuel usage which is a bad thing and so therefore we should reject the spot we got word that the administration had issued the permits so the utilities that were pleased about that. That means the pipeline will be built but just a few minutes after that came more information, Rick. This was a memorandum of understanding that goes along with this deal and involves $57.8 million. Tell us about that is that it is a memorandum of understanding between the operators and governor of North Carolina for the money to be paid into an escrow account in two installments. The escrow account. We run by 1/3 party designated by the Gov. and the governor will control the money.

The stated intention of the fund is to go to handle potential environmental problems caused by the pipeline, along with two other uses which are completely unrelated to environmental impacts that would be economic development projects in the affected counties and also renewable energy projects in the affected counties, and it does it says that the the way the payments will be handled is to be determined. When an executive order will be issued by the governor later who will say how the monies will be spent will based on that an executive order from Gov. Cooper where does the general assembly fit into this whole equation. Nowhere next problem that we discussed and have tried to determine is how does the governor negotiate an agreement for between party like this in the state of North Carolina to deliver at some of money to build this infrastructure and not involve the general assembly at all because state constitutions, is very clearly that monies that come from money that comes from settlements and that includes things like vines and things like that have to go through state treasury that there are situations such as the global settlement that led to the goal creation goldleaf that tobacco money tobacco monies that that went through a separate fund, however, that fund was not only authorized by the Gen. assembly, which signed off on the settlement and also Gen. assembly has appointments to the board that handles applications for grants from goldleaf. In this case the governor not only set up the fund. The he controls he will control the fund and he will decide how the money you spent the general symbol is the role this whatsoever. This sounds like really new territory for something like this is it unprecedented that you described a bit of things but that was quite different.

This is this is unprecedented there. The only thing that comes close to this. From what we can recall is actually the settlement deal that was worked out between Smithfield Foods, the huge pork producer and the Atty. Gen.'s office with Mike Easley was Atty. Gen. and that was a deal to pay $2 million a year for 15 years to the Atty. Gen. to spend as the Atty. Gen. saw fit on projects related to potential impacts of the hog waste out the money was spent for all sorts of things other than that, but again it was a discretionary fund going to the Atty. Gen. in the scimitar since you actually sued to argue that this violated the state constitution because it did not involve the general assembly.

It was a discretionary fund/what is called that time and also that there is sort of there is for the separation of powers question here is of the governor does not get to appropriate Atty. Gen. does not get to appropriate monies he sees fit over the Gen. assembly gets so there's that that sort of analogy down in that particular case of the toss lost a trial court and the Court of Appeals now has a case if the Gen. assembly is going to play no role in this discretionary fund again talking about $57.8 million in the Gov. Cooper controlling what it says. Spent on what's in the reaction from the leadership of the Gen. assembly of the initial reaction from Sen. Phil Berger, who heads the Senate what it was issued before we heard about the fund that he was praising the fact governor finally come along and you know it ends and let the pipeline happen. He thought it was great thing also and we hear this about, but wait there's more there is more all of a sudden we hear about this deal in their dead silence in what we're hearing from the general civil leadership is that this is such a legal oddity that they don't know what to make up their suspicions about their not going to say right now that there's anything that it's unconstitutional or that is not allowed but they just can't figure out exactly how it jives with state law in the state constitution. Now this pipeline goes through several states including Virginia.

Now there's a deal that the state of Virginia has signed and you been comparing the Virginia deal in the North Carolina deal. And so in Virginia. If I understand correctly, Rick. There is a fund for mitigation right but in the North Carolina deal.

This 58 $8 million discretionary fund. There's also an area that says it could be spent on something called economic development like what is that have to do with mitigation of any effects of a pipeline nothing and just to explain about the mitigation part of it. Typically, if someone's going to build project that may have some environmental disruptions are couple ways you can deal with this, you will either have the company say were going to put forth a certain amount of money that will be available in a bond that will be able to be used to pay the damaged parties or you may have a situation in which you would have a payment will get into another fund at the Gen. assembly my control.

Francis that we would have money go to directly to groups or to agencies that handle these sorts of things in the Virginia case. That's what happened. There was a certain spot portion of the money we've got $57.5 million. Very very close in which which Elwood was going to handle about 24 million was going to handle migratory wildlife. I believe a certain amount about 20 million was going to have the water quality and the remainder was going to go for restoration of land that was disrupted foursquare that was disrupted by the summing there. It was spelled out X about what is good to go here excellent what is going to go there and the money was all taken up and the agreement was negotiated by the states environmental regulators all behalf of the Commonwealth of Virginia. In this case the deal appears to be negotiated entirely by the governor's staff in North Carolina North Carolina on behalf of the say North Carolina but still Gov. Cooper controls the fund, not the different regulatory agencies which normally would do that. Lastly, Rick. I know that that you have requested some documents and as of the time you and I are talking you have received this right, we have we made multiple requests the form of environmental quality has said there gonna comply with the records request that we are given to them. We got nothing for the governor. The response was lots more reporting to come. No doubt from Carolina Journal. You can read the we been talking with Rick Henderson.

He is editor-in-chief. Thank you. I think you can see with this a lot more Carolina journal radio to come in just a moment government plays a key role in your life affecting your paycheck the way you educate your kids the way you do business. How can you tell if government is doing a good job making the right choices.

Spending tax dollars wisely. Carolina tackles those questions every day. The John Locke foundation publishes Carolina Journal imprint each month and on the web each you'll find exclusive investigative reports on topics. No one else is covering what else a rundown of the best new stories, editorials and opinion columns in North Carolina. John Hood's daily Journal news stories and important public and the voices of the newsmakers themselves at Carolina journal radio imprint on the air and on the web. You can find the information you look back Carolina journal radio I Michiko got much is changed in North Carolina politics over the past 1000 weeks. That's more than 19 years. If you do it a little bit of arithmetic. There are next guest has been keeping track of all of these changes and helping television viewers across North Carolina keep track of them to Tom Campbell is the host and moderator of NC spin that weekly television program recently marked its 1000th episode. First of all congratulations feel alone.

Congratulations on anything accomplished a lot of TV. That is a lot of TV and you have obviously during the course of that time seen a lot of changes in North Carolina politics so many that it's almost hard to put your finger on all.

I think the biggest changes I've seen. First of all, of the change from the shift of power in North Carolina.

It used to be that most of the political power was east of I-95 no longer the case. All of the East now is solidly red Republican, the more urban areas are now more democratic so far as elections are concerned, the legislature itself is changed quite a bit since my dad served there back in the 70s. It is more highly partisan, less collegial than it used to be. I can remember even when I was Harlan Bowles, chief deputy.

It was not uncommon at all to have these big receptions Glaxo Lewin's ass and all of these people would put on and you'd see the Republican and and Democrat legislators night have arms around each other's shoulders and they were telling stories to each other in a fair amount of legislation actually got done during those times as they were able to get to know each other and cross the aisles to get work done. Not so today. The other thing is that where's we like to talk about the fact that the power resides in the Senate President pro tem and the House Speaker reality is today. It really resides with the caucuses and in both instances, Republican and Democratic.

Those caucuses are pretty well split. In fact there bigger fractions there than people know. And one of the things that Tom Tillis used to tell me when he was House Speaker is I can only get done what my caucus will allow to work and sometimes the old mainstream Republicans. For instance, I'm talking about the Jim Holt's house with Jim Martin the Jim Breuer Hill faction of the Republican Party. Although once named Jim they're still there, but there a lot quieter and more silent and the more fundamental to the right Republicans have taken over in like manner, the same thing is happening with the Democratic Party. You don't hear much from the mainstream Democrats that that we used to know through the years. So a lot of political changes but I think the biggest change has probably taken place in the meeting when you go back and look at it. 19 years ago. Yes there was an Internet. Yes, there were fliptop cell phones if you remember but the smart phone hadn't been exist. What hadn't been admitted to the Internet itself was not as much of an entity. People were into the blogging and the Facebook and Google in the social media and all of the other things that were taking place newspapers were still the top look to the king of the hill so to speak. Television stations were rising, emerging local TV and and cable television. The network's cable television networks were just beginning their assent and influence on politics.

All of these things have had just a tremendous impact and frankly it makes us believe that with this has been a large splintering or fractionating if you will, of the audiences and because of that fact. We think that what we're doing is, perhaps, maybe even more important today than it was in 1998 when we first got started because there are not many places where you can go and get account of a balanced debate for the old Moore state. As we like to say that is the voice of Tom Campbell. He is host and moderator of NC spin work to have some very interesting information to those of you were listening at sink and I haven't seen it on the air lately.

There's a reason if you're watching at the old location why you are exiting into spend will tell you where you could see it coming up, but the you reference this that the change in the collegiality and the change in the way that the both sides of a political argument will operate and respond to each other. That's one thing that really hasn't changed on NC spin you get people of very different views, but those sit down and talk to each other not just shower Nietzsche from the outset what one of the guidelines and by the way, your listeners might be interested in knowing how this all got started I was at an event. One night, and ran into John Hood and told him I'd been a big fan of John MacLachlan and the McGlocklin group on PBS. I was a licensee for Fox 50. The television station here in Raleigh-Durham and I was intrigued by MacLachlan show MacLachlan himself was a bit brusque and I didn't like him as a moderator all that much, but I liked the idea of having a show where you could hear different sides of issues I mentioned that to John and he said funny you should mention that, because he said I used to work as a researcher for Fred Barnes on that ship, how the show was built on the way it's formatted. If you're really serious about wanting to start a show like that in North Carolina I can tell you how to do it and by the way, I'd like to be on it and I said well okay you represent one end of the spectrum, we gotta get someone to represent the other hand in both of us just almost simultaneously, said Chris Fitzsimons. We met it take a trip's restaurant sit down over a napkin over lunch one day and that's how the show got started and both Chris Fitzsimons and John Hood continue to serve as your standard left right anchors on that show today and have through most of the thousand shows an un-awful lot of the viewers tell me that they tune in to watch John and Chris hoping that they'll get into it with each other. Put put back to your original point.

We said from the outset, where southern ladies and gentlemen, I will not moderate. I will not produce a show in which everybody is yelling at each other, calling each other names speaking over top of each other. The viewer gets no benefit from that whatsoever in and I'm just not going to be part of it. I don't want well it's a very interesting elements that we don't see in much of the rest of politics today is civil debate on issues. Chris says we can disagree without being disagreeable exactly. Now if people have are listening to us and saying NC spin one of the or the main ways that I get news about politics and policy but haven't seen it lately.

Where did it go, tell us what's up what is currently happening with this easement will our last show on the commercial TV stations across the state was December 31 Mitch were were delighted that we are now part of the UNC TV network, and that we will be airing Friday nights at 7:30 PM and again on Sunday afternoons at 1230 and you can see us on the North Carolina channel when CT's Friday nights at 10 PM, Saturdays at 4 PM and again on Sundays at 10 AM, Tom Campbell is the host and moderator of NC spin now available to be seen. Once again, each week for maybe a thousand more episodes for limited time not infer that I've told him I'm going to try to do tool through the elections of 2020, up until the end of the year 20 okay. That is Tom Campbell, of making a promise it will see at least a couple more years of NC spin now on you and seek thanks much for joining us will have more North Carolina journal radio in just a moment if you love freedom we got great news to share with you now. You can find the latest news, views, and research from conservative groups all across the state. All in one place North Carolina one-stop shopping for North Carolina St. movement North Carolina You'll find links to John Locke foundation blogs on the days news Carolina reporting and quick takes Carolina journal radio interviews TV interviews featuring CJ reporters and Locke foundation analyst plus opinion pieces and reports on higher education. All of that from the Pope Center for higher education policy commentary and polling data from the Cintas Institute and news and views from the North Carolina family policy Council. That's right, all of that, all in one place North Carolina that's North Carolina spelled out North Carolina Log on today. North Carolina is changing not just day-to-day but outward to our minute to minute and 2nd to 2nd, how can you keep up with the changes, especially the ones that affect you, your family, your home, your job, make the John Locke foundation and Carolina journal part of your social media diet on Facebook like the John Locke foundation like Carolina.

Journal follow us on Twitter at John Locke in the sea and at Carolina journal news, insights and analysis you'll find nowhere else. Thanks to the experts at the John Locke foundation and thanks to the first-class investigative reporting of Carolina journal. Don't wait for the morning newspaper. Don't wait for the evening news if it's happening now it's happening here the John Locke foundation and Carolina journal. Have you covered with up to the second information like us on Facebook the John Locke foundation and Carolina journal follow us on Twitter at John Locke NC and at Carolina journal did you know you can now advance freedom and free markets just by shopping with Amazon it's true online shopping is now a great way to support the John Locke foundation just shot using the Amazon smile program and designate the work foundation to receive a portion of your purchase amount that's right you shop and Amazon donates money to us. The John Locke foundation. So here's how it works. Log on to Amazon smile. It's the same Amazon you know same products same prices.

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So now not only will you enjoy what you buy will also support freedom. Don't forget log on to today by something nice and help defend freedom. Support the John Locke foundation will Qubec Carolina journal radio hi Mitch coca a data breach in the state Department of Health and Human Services generated headlines in 2017. Sec. Mandy Cohen recently briefed lawmakers on steps or department is taking to avoid repeat performance. Our technology for contacting the policy for operational folks are all in and sitting around the same table as were discussing it right now, not ever writing a policy candidate for the 18 a bill that many can accurately think about our business process and anything we communicate about this. It's really all that frightening. I spend the time to talk about that because I think it's a really important philosophy and change in the way that were doing our business Republican representative Nelson dollar pushed back in all the talk you just gave his is going to be disciplinary action either in the specific case, or in cases going forward because when all the things you said are all good and I think most of rendering would agree with them but if it doesn't come with you know some, disciplinary action on occasions when people are not in following through on all the elements a happy talk because I realize it's what you said is more serious than that. But, but is it going to be real accountability in in the system for things that are not met, reaches her maiden in the light because we seen in the past. In this department was not under your tutelage, but honor others where no disciplinary action was taken. Hundreds of millions of dollars wasted all kinds of things went on because it was really no accountability for maybe a variety of reasons, but so you know we we want to be. I think general simile must be able to see that. I appreciate that something I think about every day in the job that I am doing. I think when I went. When I'm thinking about how we build our system. I want to take as much of the time uncertainty of human action and how it affects right.

Why is our light is our system let you get might widen their technology solution that will prevent some risky thing happening on that on the security side right life that even on wire leaving Darius my point is highly build sounds great.

I don't think these are bad. I think it is systems that we are focused on and how we create our system and to make sure that folks are able to use and do the job they want to deal I'm still fighting it requires a human to think to do something every single time perfectly.

Next is not a sustainable way.

So how do we create a system you have to check on you been listening to discussion of a recent data breach at the state Department of Health and Human Services overture with more Carolina journal rate in a moment really influence you either have it or you don't and at the John Locke foundation. We do, and that's not bluster in a private survey of more than 250 North Carolina political insiders 87% said we influence them either a great deal a good amount. So while others talk and complain. We get to work providing research solutions and help our team analyzes the pressing issues of the day jobs, healthcare, education, and more. We look for effective ways to give you more freedom, more options, more control.

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The John Locke foundation were dedicated to making North Carolina first and freedom were dedicated to you will Qubec Carolina journal radio I Mitch coca with driverless cars on their way toward North Carolina roadways. How is the state preparing Kevin Lacey is state traffic engineer with the North Carolina Department of Transportation. He recently offered state lawmakers a status report. I would give this and there's a lot of certainties uncertainties, and we start talking about from a Department of Transportation perspective we start doing things different. We think about risk. If we go out and say well you know what the autonomous vehicles and reduce BMPs by 20% and were wrong and we don't build for. We built 4-20%. The world is going to hurt. And if we say well you know Tom's vehicles is an increase in fees by 20%, and we built for that and we got a lot of waste infrastructure rebuild, but there are some certainties car will change is going go smarter. The passenger originally had the driver will not be a driver won't be a passenger roadways yell until Embraer and other air units in the play yellow though the roads and bridges are still to be needed still need to be maintained and then the role of EMTs and devotees will change.

We don't know is how and when Lacey identifies other uncertainties about driverless cars also known as autonomous vehicles rate of acceptance where people ready to get on these vehicles when no one is driving some people say never. Some people, ready to do it yesterday infrastructure requirements referred connected vehicles. It would cost us billions of dollars a year for the asphalt and concrete. We start put in high tech stuff on the side road that changes every six months. That's the voice of Kevin Lacey, state traffic engineer with the North Carolina Department of Transportation East discussing the many questions surrounding driverless cars on North Carolina roadways.

Another key question involves network management was really folks out there managing mother's fleet management or so for transportation funding model as the question that we look for for you guys.

How does all this in a course vehicle ownership is going to change. We've heard yes no maybe possibly well today with current ownership is as we generally probably own one or more vehicles a park at our house and we drive to work or where were going and there's a possibility that single ownership will continue in the future.

I mean Tess was looking out $35,000 price point. We all love that incident. Gratification of driver walking out to the car get in the car and driving somewhere like we willing to give that up in some areas we might what about group ownership.

We have a group of people owning multiple vehicles from that standpoint how do we collect the taxes and so forth. From that, who's responsible who owns it as you keep it up and then the other corporate ownership. GM will start about owning a fleet of vehicles over owns a fleet of vehicles is going to be the predominant way. My belief is, is got me all the above will always be somebody owning their own vehicle is what they want to do, but it's you know when we start looking at which of these other models are gonna be predominant in the transportation industry is to come down to individuals making was best and that's was available. Driverless cars percent plenty of questions for the state DOT itself. How about the typical model that you see in North Carolina is that we have a lot of folks live in the suburban areas driving in the cotton call centers or job centers that might be another trip scenario. How many people given up their single ridership vehicle for the shared ride called transit we've invested a lot of money in transit across the country was to have relatively low ridership entrance design was is going to do for design, whether it's how we communicate to the drivers with a sign on the machine because we will have a period of time where we will still drive and there will be some of Tom's vehicles on roadway but will we start looking at in that future date when there is an opportunity where there is predominantly autonomous vehicles out there that can drive closer together, both literally and laterally they can drive at higher speeds closer together and a lot more capacity out of the existing roadway. That's a good thing when we start doing it back to that risk. Personally, we are not ready start doing that yet, but we need to start planning on how to lead.

How we deal with that. What about highway construction construction zone. No, until we go to the third dimension we will be dealing with construction zones and we just avoid them altogether.

What about how we operate the system as a whole. Right now we do have a bunch of individual people operate their vehicles. They know what system and what roads that they typically drive on you know the route that you take the work every day and go home every day. Sometimes you wonder how did you go home because I don't remember passing sex because we drive in a tonic way already, but Boutwell about controlling these fleets from an aviation standpoint we have traffic controllers. We look at that well in urban areas. We have traffic operations centers that try to help God motorist around events such as Wrexham and other things of that nature. Lacey says the changes also will impact DOT's bottom line is not a single portion of this really touched just about the entire dollars, touch, and somewhere another motor fuel tax gasoline and diesel are no longer the predominant mode of living vehicles around then that's Western from highway use tax. How do you collect that back to if it's if it shared ownership that can reduce the number of vehicles if it's fleet ownership that the reduced number of of vehicles after likely but you get better utilization of those is referred between 90 and 95%. The cars parked all the time. These demos fees are driver license fees if you don't need a driver license to operate a ride in the autonomous vehicle, then you will be collecting that titles and so forth. Using those as well. So we start talking about our revenues or may not call the gas jacket taxes, trickle charge, don't get one great big bill at the beginning of the year, or act in a year and say well Kevin you bought 500 gallons of gas is here. Here's your bill for gasoline tax we pay a little bit of time and used to pay electrical charge is that nobody from the electric vehicle standpoint how do you how do you share that across state lines. What about from a federal perspective. When we look at the predominant transportation system. It is asphalt and concrete stuff moves very slow. It does not change very rapidly third technology in the world it changes every other day. At least every six months or looking at newer, better, faster, quicker, all that stuff come out there. Is that something that a Department of Transportation or we gonna be able to afford to maintain and keep that technology up or do we let a third-party handle that.

That's Kevin Lacey, state traffic engineer with the North Carolina Department of Transportation East discussing the many questions surrounding driverless cars in North Carolina's future will return with more Carolina journal radio in a moment. Full color throughout every issue more visual storytelling. We've revamped Carolina journal to make it easier to read a new look and a new feel. But one thing hasn't changed and it never well that is our commitment to truth and transparency in government, you can still count on Carolina journal for investigations into government spending revelations about boondoggles and vetting of corruption.

No permission to shine the light on what North Carolina government and the bureaucrats who run it are doing in your name and with your money will never wane and because of that our reach and influence are growing through all of our distribution outlets we reach more than 1 million N. Carolinians every month so make sure you stay informed. Read the monthly print edition of Carolina journal. Then check in several times a day, Carolina that's where you'll find fresh stories, opinion pieces and updates on government politics and your money.

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We hold government accountable to you. Welcome back to Carolina journal radio Donna Martinez president Trump has announced that he intends to place heavy tariffs on two brands of imported washing machines, LG and Samsung and unimportant solar panels and other solar power related hardware that is bad news for US consumers says our next guest, Dr. Roy Coronado's Senior economist for the John Locke foundation.

He's writing that this tariff policy is in direct conflict with the present stated goal of putting America first Roy welcome back to the program been bedecked on a first of all, explain for us what is the tariff while tariff is nothing but a tax so it's it's just like if you were going to tax cigarettes or alcohol or anything like that.

It's that what we call an excise tax, but it's it's a tax on the purchase of a particular product. In this case, washing machines made. I believe the meeting created by LG and Samsung Samsung. Thank you so it's a specific tax on those products and on solar panels. How would that then make the product more expensive and he does it to simply just raise the price testing amount just like any tax does right you get more expensive cigarettes. In fact, I guess we need a more expensive gasoline.

So it's the same way that it also raises the prices in other ways because it restricts competition for all washing machines right which just raises what raises the washing washed price of washing machines and solar panels for that matter across the board because you just can have less supply of of the good in the United States, which means higher prices president though says that this is about fairness and about protecting Americans what he make this argument. Well, it certainly doesn't protect American consumers right they have to pay the pay the tax. So you know it put it, it does protect some Americans write those producing those particular products but it hurts the vast majority of Americans.

All the consumers. Those products, but of related products, so it to say it. It helps Americans. It is certainly not the case. If I go to my washing machine.

After this tariff is imposed. Essentially, that means then that those particular brands have the tariff applied to be more expensive than other brands that might actually be the same type of washing machine is seen clearly more expensive than those other brands, but all those other brands will be more expense.

So, relatively speaking, the more expensive but the whole of all, general price of washing machines will be higher for Americans. Let me say as a placing that story less expensive for foreign consumers buying machines that work well with these companies, LG, Samsung will try to sell now more of their product overseas or overseas from the United States and in other countries besides the United States to make up for that. What does that mean it needs a supply of those washing machines in those other countries will be greater be lower in the United States. The greater in those other countries, which means lower prices. So really what were doing with that tariff is subsidizing the price of washing machines for the French, Italians, the Canadians you know whoever whoever so I do not see how that's putting America first.

It is interesting that economics. First, it's interesting that the president and the Congress passed down federal tax cuts, tax reform right just a few weeks ago.

So you have on the one hand, tax cuts, which are designed to make sure that people keep more of the money that they earn fright, but now you have this tariff looming which would make products more expensive so sounds to me like those of competing forces on the pocketbook and they absolutely are. And you know if the present.

Just took the same economic study used, to put through his tax plan and to support his tax plan and thought about it and extended to trade he realized just how bad protections policies like this are the fact is, is that they don't do any good except to protect particularly favored industries and that's what tariffs are always about it's really a form of crony capitalism, what would you say to people though, say looking on the president is right. He's looking out for us and this is putting America first.

Well, he's not looking out for me. I don't produce any washing machine I'm I consume washing machines. I buy washing machine so I'm an American. That's putting me first so I don't understand the language. It's putting some Americans first dose he thinks this should be benefited and get well transfer from American consumers look when he when who's he protecting his protecting these American companies from the decisions of American consumers not to buy the product. The whole problem is that American consumers are American consumers are deciding freely to buy LG's right, washing machines and and that's who the American producer is being protected from the decisions of American consumers never going to penalize American consumers for making those decisions is wrong so it sounds as if they idea of the tariff is that were going to pick particular companies or industries to quote protect. It sounds very similar to the rhetoric that we hear in the state of North Carolina, for example, only talk about well trying to get Amazon to build its second headquarters. It is a form of corporate welfare.

Absolutely it's it's just using a different tool to favor to convey benefits on certain companies over American consumers right in the present state of the Union address, he talked a bit about trade and briefly and he referred to the issue of tracing essentially that he wants as he describes it. Fair trade, and reciprocal trade. What's that mean you know what, that's a great question to me at all. Trade is reciprocal right I think I can imagine free-trade any kind exchange not being the six reciprocal I give you something you want. You give me something I want that's reciprocal and that's the definition of all trades is really kind of a silly a way of looking at it and I to be quite frank just think it shows ignorance of the nature of trade on the part of the president and what could be more fair than something that's mutually beneficial and involuntary in both parts on the rhetoric.

I don't understand, and a lot of people use this kind of rhetoric, but I think it's a from economics perspective.

Really nonsense is really popular writer. You have a lot of people who embrace this type of thing so what do you folks like yourself who are free traders. What do you say to try to explain to people that while the president's words sound comforting working to be protected, etc. that in the long run, these really are positive things to do well first of all I would challenge him to say show me any any situation where any time in our history where protectionism has actually benefited of the American economy where it is help the economy grow. Certainly the Smoot-Hawley tariffs in the 1930s made the recession that the Great Depression much worse than it otherwise would have been theirs.


There is no empirical evidence to suggest besides there's no economic argument to suggest that protectionism of benefits and economy as a whole benefits.

Some at the expense of others. It's a really interesting piece that you've written right and very timely piece as the president is talking more and more about trade and issues of the economy and using some protectionist rhetoric that a lot of people responding to Dr. Roy Coronado's Senior economist for the John Locke foundation right thanks B with my pleasure and that's all the time we have for Carolina journal radio this week. Thank you for listening on behalf of my pelvis Michiko Guy I'm Donna Martinez will join us again next week for more Carolina journal radio Carolina journal radio is a program of the John learn more about the John Locke foundation donations that support programs like Carolina journal radio send email to development John Locke done call 66 GLS 1-866-553-4636 journal radio nation airline is maintained. All opinions expressed on this program nearly commissioned them show or other foundation airline sponsored Carolina radio again

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