A Stitch in Haste

Remember the Byrd Amendment, 19 U.S.C. 1671, §754? It's a bizarre anti-free-trade law that not only slaps counterproductive tariffs on goods from countries deemed to be "unfairly competing" with American businesses, but actually gives the money raised from those tariffs to the companies in the affected industries. These companies are in essence collecting their own private tax.

Over a year ago the World Trade Organization ruled that the Byrd Amendment was a violation of international trade rules and authorized retaliatory sanctions by the European Union, Japan, Canada, Mexico and other nations.

So, for American consumers, the Byrd Amendment:

--raised the prices of imported goods in the affected industries as a result of the tariffs;

--raised the prices of domestic goods in the affected industries as a result of reduced competition;

--propped up inefficient industries, to the detriment of the economy as a whole;

--hurt efficient industries that were successfully competing in global markets, as a result of the retaliatory tariffs.

Great going, Senator Byrd.

In any event, the Government Accountability Office has released a study of which industries are receiving all that Byrd Amendment tariff money, totaling $1 billion over four years:

Two-thirds of that money went to three industries — ball bearings, candles and steel. Nearly half of the $1 billion in payments went to just five companies.

The Timken Co. of Canton, Ohio, was the largest recipient, receiving $205 million. The other four big recipients were the Torrington Co., $135 million; Candle-lite, $57 million; MPB Corp., $55 million; and Zenith Electronics Corp., $33 million.

Candles? The candle industry is vital to America's economic vitality or national security?

But wait, there's more:

The former chairman of the board of Timken, William R. Timken Jr., was a major contributor to President Bush's re-election campaign and served as finance co-chairman for his campaign in Ohio, the state that gave Bush his margin of victory over Democratic candidate John Kerry. Bush appointed Timken the U.S. ambassador to Germany in July.

I think the political expression for this is "quid pro ball bearing."

So is this good news or bad news? On the one hand, the deadweight loss and disruption to market dynamism from the Byrd Amendment was "only" $1 billion over four years. On the other hand, the brazen specificity of the awards and the political give-and-take are rather nauseating. As the saying goes: great subsidy if you can get it.

In any event, it appears that support in Congress for repealing the Byrd Amendment is growing, but still inadequate to succeed.

Keep all this in mind the next time you're shopping for candles.

---

Meanwhile, Senator Byrd has announced that he will seek an unprecedented ninth term in the Senate in 2006. Byrd is 87 years old.