Wednesday, September 16, 2009
Where have you gone (skinny) Al Gore?
Perhaps the most noble thing Al Gore ever did as Vice President was when he kicked H. Ross Perot with a pro-free trade/pro-NAFTA boot on national television back in 1993. Hell, now that I think about it, that might be the only noble thing Al Gore ever did.
Anyone with a rudimentary knowledge of economics knows that protectionism deepened and prolonged the Great Depression. Indeed, the U.S., steeped in a deep recession, erected trade barriers thicker than the Great Wall in 1930, and its global partners followed almost immediately. What followed was a decade of ... well, you know.
Why is it, now that we're in another deep global economic downturn, that the Obama Administration is hell-bent on sparking a trade war pitting America against its closest trading partners?
What am I talking about? Well, the Obama Administration has slapped punitive tariffs on low-cost tires from China. Domestic tire-makers have shunned producing such tires because they're not profitable, but ... President Obama knows that his political fortunes, past and present, are tied to union dollars, so he's done the dolts in the unions a solid by adding $10-20 to the cost of a Chinese-produced tire (not a smart move when folks have fewer pennies to pinch).
What's been the result? Well, China has now slapped tariffs on chickens and auto parts imported from the United States. This comes on the heals of Canadian objections to "buy American" provisions in President Obama's vaunted stimulus program.
If Obama keeps fuckin' our largest trading partners with arbitrary tariffs, who knows what could happen. Wait, we who DO know something about rudimentary economics know exactly what WILL happen, and it ain't pretty. China's gonna stop buying our debt, and most of our domestically-produced products; Canada's gonna slap "buy Canadian" provisions on their domestic stimulus programs; and ...
Stay tuned.
Anyone with a rudimentary knowledge of economics knows that protectionism deepened and prolonged the Great Depression. Indeed, the U.S., steeped in a deep recession, erected trade barriers thicker than the Great Wall in 1930, and its global partners followed almost immediately. What followed was a decade of ... well, you know.
Why is it, now that we're in another deep global economic downturn, that the Obama Administration is hell-bent on sparking a trade war pitting America against its closest trading partners?
What am I talking about? Well, the Obama Administration has slapped punitive tariffs on low-cost tires from China. Domestic tire-makers have shunned producing such tires because they're not profitable, but ... President Obama knows that his political fortunes, past and present, are tied to union dollars, so he's done the dolts in the unions a solid by adding $10-20 to the cost of a Chinese-produced tire (not a smart move when folks have fewer pennies to pinch).
What's been the result? Well, China has now slapped tariffs on chickens and auto parts imported from the United States. This comes on the heals of Canadian objections to "buy American" provisions in President Obama's vaunted stimulus program.
If Obama keeps fuckin' our largest trading partners with arbitrary tariffs, who knows what could happen. Wait, we who DO know something about rudimentary economics know exactly what WILL happen, and it ain't pretty. China's gonna stop buying our debt, and most of our domestically-produced products; Canada's gonna slap "buy Canadian" provisions on their domestic stimulus programs; and ...
Stay tuned.
# posted by Joltin' Django @ Wednesday, September 16, 2009 
