OPINIONS

OPINIONS

The perspectives in Opinions represent the viewpoints of the individual authors and should not be interpreted as reflecting University positions or policy.  Authors include SMU faculty, students, staff and board members.  SMU embraces freedom of expression and welcomes opportunities for the exchange of diverse viewpoints, pledging to maintain the University as a home to civil discourse.

Texas should slow production to stop oil and gas waste

April 24, James Coleman, Energy Law Professor at Dedman School of Law, SMU Dallas, for a piece calling on Texas authorities to slow production of Oil & Gas. Published in the Austin-American Statesman: https://bit.ly/2zpNepT

On Monday, the U.S. price for a barrel of oil delivered in May fell to negative $37.63. Companies with oil had to pay almost $40 per barrel to find a company willing to take it off their hands. At the same time, barrels of oil in the rest of the world still traded for $20 to $30 per barrel. And barrels of U.S. oil delivered in June through October were also worth $20 to $30.

In recent years, it has become more and more common to see negative oil and gas prices for stretches of time. North American companies are struggling to keep up with the historic oil boom, unable to find enough storage and pipelines to save and transport oil and gas to when and where it is needed. In these extraordinary times, Texas and the other producing states should band together to carefully slow production. . .

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Forget the Defense Production Act

April 11, Michael Davis, Cox School of Business at SMU Dallas, for a piece critical of the way President Trump and the press have made a political football of the option to use the Defense Production Act. Published in the Detroit News: https://bit.ly/2V2Wad6

Here’s an important question in these days of home confinement: How do we get the kids to pick up their room?

Yelling? Sure, it feels good, but it seldom works. The kids know we’re not going to cancel Disney+ for the duration of the crisis.

Keep that domestic drama in mind as we work on a much more important problem: How do we make sure that health care providers can find enough masks and ventilators?

Some people — including almost all Democrats but many other less partisan commentators as well — want President Donald Trump to start yelling. Specifically, they want him to make greater use of the Defense Production Act. . .

Read more from Michael Davis at https://bit.ly/3e0bvTh

By Michael Davis

Here’s an important question in these days of home confinement: How do we get the kids to pick up their room?

Yelling? Sure, it feels good, but it seldom works. The kids know we’re not going to cancel Disney+ for the duration of the crisis.

Keep that domestic drama in mind as we work on a much more important problem: How do we make sure that health care providers can find enough masks and ventilators?

Some people — including almost all Democrats but many other less partisan commentators as well — want President Donald Trump to start yelling. Specifically, they want him to make greater use of the Defense Production Act.

The DPA gives the president extraordinary powers in time of crisis. By invoking DPA the president can order private firms to accept government contracts, directly control supplies of critical goods and even appropriate private property.

The DPA is the political equivalent of a primal scream.

But will yelling at businesses work? No. In fact — and parents, you know this — yelling usually makes things worse. The DPA is unlikely to get us any more masks and respirators. But even if it does make a tiny difference, it will lead to a whole range of unintended consequences.

We can see that happening already. On March 27, Trump invoked the DPA and ordered GM to produce ventilators. But GM was already eager to get started. By most accounts FEMA was slowing things down by haggling over price. It’s also clear that GM didn’t want to promise more than it could deliver.

GM could have found a thousand reasons why it couldn’t turn a car factory into a ventilator factory. But they said they’d try and then got yelled at for not trying hard enough. We can only imagine how that lesson will affect other companies that might be able to help.

It got worse earlier this month when the president used DPA authority to prevent exports of protective gear. This had a big impact on 3M, one of the only domestic producers of N95 masks, some of which are exported to Canada.

Let’s set aside the question of whether this is any way to treat your friends. Just focus on how much harder this is going to make it for Americans to get what they need.

Personal protective equipment comes from all over the world, including Canada. In fact, Canada is the leading supplier of a special type of wood pulp used in making surgical masks. So far the Canadian mills are working as hard as they can to supply the demand from America. Without this paper, the supply of American made masks would be strained even more than it already is. Maybe Canadians will just ignore our ignorant, selfish embargo and keep working — that legendary Canadian “niceness” is, after all, a real thing. But who can blame them if they don’t.

If we wanted to motivate businesses, we’d use the tools that smart parents everywhere know really work: incentives, public praise and some patriotic persuasion.

How would that work to get more essential equipment?

Start with incentivizing. Tell the companies “We need this stuff right away. Don’t rob us blind, but figure out what it’s going to cost to make, and then tack on a little extra.” (Sure, we’d pay a bit more than in ordinary times, but these are not ordinary times.)

Then go with some public praise. Invite the big shot industrialists to a White House photo op, give them medals and tell them, “You did an unbelievable job. We can’t even count the lives you saved.” (That’s not true, of course. The real heroes are the engineers and workers who got it done. But the CEOs love that sort of thing.)

And don’t forget about a dash of patriotic motivation. Every politician needs to repeat over and over, “Now more than ever, Americans are depending on Americans. We all need to do everything we can.” (I actually don’t think this is necessary. Business people know this already. But it can’t hurt.)

The Democrats have been yelling at Trump to yell at businesses. That didn’t do any good but if all they’d done is make noise, that wouldn’t be a big deal. Politicians need to be seen doing something and we all need to blow off steam. But the yelling creates an atmosphere of sullen resentment. That doesn’t just make us feel worse, it makes it harder to get things done. The politicians should put the DPA back in its cage now.

Michael Davis is an economics professor in the Cox School of Business at SMU Dallas.

Religious Resistance to Quarantine Has a Long History

April 10, Bianca Lopez, professor of Medieval and Renaissance Studies at SMU Dallas, for a piece warning about the perils of religious groups resisting quarantines during pandemics – today and throughout history. Published in the aggregator Inside Sources: https://bit.ly/2VmqLBx

In numerous parts of the United States, certain stripes of Christianity and quarantine orders stand in direct opposition, resulting in deadly outcomes due to the COVID-19 pandemic.

Ignoring or refusing to follow social distancing and stay-at-home guidelines, congregations from California to Florida have continued to assemble for worship services and thereby put themselves and their communities in peril.

Examples include Sacramento County in California where more than 100 of the county’s 314 coronavirus cases are related to churches. Some of the congregations have ceased meeting in church buildings but continued to gather in homes, even though dozens have fallen ill and one has died of COVID-19, public health authorities say. . .

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Uncertainty Is the Biggest Threat to World Economy

 

April 9, Professor Hiroki Takeuchi,  Associate Professor of Political Science and director of the Sun & Star Program on Japan and East Asia at SMU Dallas, for a piece identifying a host of uncertainties hampering world trade due to political shifts and border closings.  Published in Inside Sources: https://bit.ly/3aZHwsC

The global value chains (GVCs) developed all over the world — which allowed multiple nations to produce components and collaborate on assembly of products — have ceased to function because of political uncertainty and closed borders amid the coronavirus pandemic.

Even after things have settled down, the global economy will have to start over and re-invest in rebuilding GVCs.

The development of GVCs in the Asia-Pacific region over the last three decades has brought a new international division of labor between developed and developing countries, as well as between democratic and authoritarian countries. . .

Read more from Hiroki Takeuchi at http://bit.ly/2I3iEUi

 

 

The global value chains (GVCs) developed all over the world — which allowed multiple nations to produce components and collaborate on assembly of products — have ceased to function because of political uncertainty and closed borders amid the coronavirus pandemic.

Even after things have settled down, the global economy will have to start over and re-invest in rebuilding GVCs.

The development of GVCs in the Asia-Pacific region over the last three decades has brought a new international division of labor between developed and developing countries, as well as between democratic and authoritarian countries.

The nations have a strong incentive to establish internationally adopted rules by concluding free trade agreements (FTAs) to manage GVCs based trade.  As more international economic interactions have become GVCs based trade, the focus on trade negotiations has shifted from national border measures into domestic regulations. Countries need to agree on the international rules stipulating domestic regulations.

If a country is involved in the global economy and benefits from GVCs based trade, as many of the Asia-Pacific countries do, then its government would have a strong incentive to use the FTAs as a gaiatsu (literally meaning “foreign pressure”) to advance domestic economic reforms.

In the meantime, domestic reforms undermine the collusive and corrupt rent-seeking scheme — such as the vested interests based on the state-owned enterprise system in China. Therefore, the reformists face backlash from those who benefit from the rent-seeking scheme.  GVCs based trade empowers the reformists in the balance of power of each state’s domestic politics.

This argument has particularly important implications for policy debates over the Trans-Pacific Partnership (TPP) — which was originally a U.S.-backed trade agreement but is now led by Japan, Canada, Australia and Mexico. When the international negotiation of the TPP was concluded in October 2015, then-President Barack Obama said that “we can’t let countries like China write the rules of the global economy.”

Obama showed concern that if the TPP failed to take effect the United States would miss the opportunity to form the basis of the international economic order.  And now that the Donald Trump administration has withdrawn the United States from the TPP, the United States has indeed missed the opportunity to lead the rule-making of international trade.

However, although the U.S. withdrawal prevented the TPP from taking effect immediately, its agreed rules have become an important model for any incoming free trade agreements.

That is why Japan took the initiative to conclude a new agreement with the other 10 states now named the Comprehensive and Progressive Agreement of Trans-Pacific Partnership (CPTPP): that is, almost the same set of rules agreed upon by the original 12 signatories but not requiring the U.S. participation.

Moreover, the NAFTA renegotiation among the United States, Canada and Mexico used the TPP’s agreed rules as a benchmark. As a result, most of the agreed rules for the new NAFTA, called the United States-Mexico-Canada Agreement, are similar to the TPP’s agreed rules, despite Trump’s vehement opposition to the TPP.

The CPTPP should be open for China’s participation in the future. The Chinese economy had already slowed down before the COVID-19 outbreak, as the state-owned enterprise reform has stalled under the Xi Jinping administration. Overall, the productivity of state-owned enterprise systems is lower than that of private firms, but Xi seems to give a priority to political control over economic efficiency.

The state-owned enterprise reform would undermine the vested interests such as the revolving door built between the Chinese Communist Party and SOEs.  The option to opt into the CPTPP would give the reformists sway over the anti-reformists, pushing the Chinese government to commit to the state-owned enterprise reform.

And perhaps most important to note is that this effect would occur even if China is not an immediate signatory of the CPTPP.  If China implements the state-owned enterprise  reform, the CPTPP including China would further deepen regional economic interdependence.

If China does not implement the SOE reform, the CPTPP would give its signatories an advantage to benefit from GVCs based international trade and help them confront China’s challenge to the current rule-based liberal international order. While the CPTPP would serve for this purpose, the Chinese-led trade agreement Regional Comprehensive Economic Partnership would not.

For China to lead the global economy, it is inevitable to be committed to the state-owned enterprise reform and Xi must face the backlash from anti-reformist nationalists.

Now that the United States and China are turning toward nationalism, Japan and Germany — the third- and fourth-largest economies following the United States and China — must take the leading role to maintain the liberal international order.

Hiroki Takeuchi is associate professor of political science and director of the Sun & Star Program on Japan and East Asia in the Tower Center at Southern Methodist University. He wrote this for InsideSources.com.

The shock and impact of instant 11 percent unemployment is just the beginning

April 6, Michael Davis, Cox School of Business at SMU Dallas, for a piece warning about the impact of sudden 11 percent unemployment on the U.S. economy. Published in the Orange County Register and affiliates in the Southern California News Group: https://bit.ly/3e0bvTh

Not sure you’re worried enough about the economy? You’ve come to the right place. As bad as the numbers look right now, I’m about to show you the reality is even worse.

This isn’t going to be pretty but if you think you can handle the truth, stick with me while I take you through the data.

Start with the news that the U.S. unemployment rate has risen to 4.4 percent. Sure, you might think, that’s a huge one-month increase. But, so what? Let’s look on the bright side. The unemployment rate was at an historic low of 3.5 percent. Until recently most economists would tell you that the “natural” rate of unemployment was around 5 percent. The U.S. does fine with a 4.5 percent rate of unemployment. Don’t worry, be happy. . .

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How parents can avoid turning shelter-at-home into Camp Chaos

March 26, George Holden, Professor of Psychology and Chair of the SMU Department of Psychology, for a piece advocating the best parenting strategies during the long days of shelter-in-place. His co-author is wife Anne Cameron. Published in the Dallas Morning News: https://bit.ly/2y5KaOZ

With the order to shelter-in-place, parents find themselves in uncharted child-rearing territory. There are no research studies, no manuals, no time-proven useful nuggets of advice. Instead, parents must rely on their own ingenuity, creativity and sensibility to forge the way forward.

Families are now into the second week of confinement, trying to work at home while managing children and worrying. The following are some tools to help navigate this strange new world we find ourselves in. . .

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Personal branding leads to more opportunities. Here are four ways to elevate yours.

March 20, Liz Navarro, adjunct professor of public speaking at SMU who teaches in the Corporate Communications and Public Affairs Division, for a commentary advocating that students and small business owners take steps to improve their personal branding on social media and other platforms. Published in the Dallas Business Journal: http://bizj.us/1q2uie

Since we’re all at home and have some time on our hands as we play defense against COVID-19, we really ought to take this opportunity to play some offense and sharpen up our personal branding tools.

If someone were to visit your LinkedIn profile, scan your resume, or Google your name, what would they learn about you? There’s a good chance they could read your current job title and see a list of companies you’ve worked for. They can likely figure out your approximate age, your alma mater, and how well you use Microsoft Office. . .

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What’s at stake when newspapers abdicate their duty to endorse candidates? Plenty.

Feb. 27, Rita Kirk, director of the Maguire Center for Ethics & Public Responsibility and professor in Corporate Communication & Public Affairs at SMU Dallas,  for a piece lamenting the de-emphasis of candidate endorsements at a growing number of newspapers. Published at History News Network: https://historynewsnetwork.org/article/174423

There was a time when voters would take a copy of the ballot they clipped out of the newspaper with them to the polls when they voted.  Recommendations of the newspaper editorial staff were often used as a guide to decision making, particularly in down-ballot races where the candidates were less known than the presidential candidates, senate and congressional seats at the top of the ballot. These editorial endorsements prove useful – and often pivotal – when candidates lack name recognition, have limited funds to disseminate a message,  or when voter fatigue sets in during down-ballot choices.

Yet those days are fading for a number of reasons.  Printed sample ballots are old school now that online versions allow voters to enter a zip code and produce a unique ballot specific to  precinct and state elections. Early voting condenses the time available to interview all the candidates. Further, angry voters are ill disposed to trust media opinions.  But another trend is more troubling:  the declining practice of newspapers editorial endorsements of candidates. . .

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