Sunday, September 20, 2009
A president who doesn't understand how protectionism kills jobs!
The NY Times has an interesting article about BO, protectionism and the politically motivated reason to slash those Chinese tires:
"The decision is a major victory for the United Steelworkers, the union that represents American tire workers.
And Mr. Obama cannot afford to jeopardize his relationship with major unions as he pushes Congress to overhaul the nation’s health care system." (NYT)
The same NY Times has an interesting editorial: Tired Protectionism
Here is the question: Should a US president put unions ahead of our national security?
Unions represent less than 20% of US private sector workers. Also, there is a lot of manufacturing in the South, such as Texas, without the burdening influence of unions.
Again, should keeping unions happy be a major priority?
Pres Clinton, the last Democrat, did not do that.
He went against the unions over NAFTA and The China trade deal.
Protectionism is bad, as we learned with the very negative consequences of the Smoot-Hawley Tariff Act of 1930.
Again, we understand that domestic politics is a factor. However, when does a concern for unions override the world economy?
We repeat that the US president should lead the way and temper pressures for trade barriers.
If we don't show leadership.....then we can't expect our industrial partners to beat back their protectionist tendencies. They will crack to domestic pressures just like Pres BO has!
Unfortunately, President BO has decided that getting into a trade war with China is OK to please the unions who mobilized to elect the most protectionist candidate in US history.
Again, we don't think that it makes sense because China is also a major consumer of US treasuries, specially the US$ 1.6 trillion that we will need to sell to close the federal budget deficit.
We understand that China is a tough competitor. However, the US can compete with anybody, specially if we have a president who does not want to saddle producers with "cap and trade", another entitlement known as "health care reform" and the high taxes that come with it all of these Dem campaign promises!
You can't do "protectionism" without consequences.
Again, it'd be nice if we had a president who understood economics....and the importance of free trade in the real world economy! We could use such a president now when exporter states like Michigan have double digit unemployment!