Economic Vandalism

Probably not a lot of folks on this side of the pond read The Economist, one of Britain's premier news and business magazines. That's a shame. The current issue (September 19th-25th 2009) has an article entitled Economic Vandalism, investigating the potential cause and effects of the President's recently enacted 35% tariff on tires imported from China. The Economist calls this "A protectionist move that is bad politics, bad economics, bad diplomacy and hurts America." How about a few teasers before you click the link to read the entire article?

You can be fairly sure that when a government slips an announcement out at nine o’clock on a Friday night, it is not proud of what it is doing.

In every other way the president’s decision to slap a 35% tariff on imported Chinese tyres looks like a colossal blunder, confirming his critics’ worst fears about the president’s inability to stand up to his party’s special interests and stick to the centre ground he promised to occupy in office.

..no one can seriously imagine that any American tyre-making job will be saved; firms will simply import cheap tyres from other low-cost places like India and Brazil.

The tyre decision needs to be set into the context of a string of ominously protectionist policies which started within weeks of the inauguration with a nasty set of "Buy America" provisions for public-works contracts.

Besides these sins of commission sit the sins of omission: the president has done nothing at all to advance the three free-trade packages that are pending in Congress, with Colombia, Panama and South Korea, three solid American allies who deserve much better.

In a section headed "Dumb and Dumber" are these comments:

Evidence of a weak president being pushed leftward might cause investors to worry whether he will prove similarly feeble when it comes to reining in the vast deficits he is now racking up; and that might spook the buyers of bonds that finance all those deficits. Looming large among these, of course, are the Chinese.

Under the relevant trade laws, Mr Obama had the absolute discretion not to impose the recommended tyre tariffs on the grounds of overall economic interest or national security. Given everything that is at stake, his decision not to exercise it amounts to an act of vandalism.

If you think, "well, that's just one tariff. What harm could that do?" Here's another article, this one in the Wall Street Journal today, that talks about a similar tariff enacted in the early 1960's that still causes problems and significant waste as businesses find ways to get around the onerous tax that are still in place long after the situation that brought it about has been made moot.

"What Were You Thinking?"

A Rookie President...

Scholar, author, economist, columnist -- all titles well-earned -- Dr. Thomas Sowell has again hit one out of the park in today's column published at Townhall.com and on the Jewish World Review.  And now, of course, here.

    Someone once said that, for every rookie you have on your starting team in the National Football League, you will lose a game. Somewhere, at some time during the season, a rookie will make a mistake that will cost you a game.

    We now have a rookie President of the United States and, in the dangerous world we live in, with terrorist nations going nuclear, just one rookie mistake can bring disaster down on this generation and generations yet to come.

    Barack Obama is a rookie in a sense that few other Presidents in American history have ever been. It is not just that he has never been President before. He has never had any position of major executive responsibility in any kind of organization where he was personally responsible for the outcome.

    Other first-term Presidents have been governors, generals, cabinet members or others in positions of personal responsibility. A few have been senators, like Barack Obama, but usually for longer than Obama, and had not spent half their few years in the senate running for President.

    What is even worse than making mistakes is having sycophants telling you that you are doing fine when you are not. In addition to all the usual hangers-on and supplicants for government favors that every President has, Barack Obama has a media that will see no evil, hear no evil and certainly speak no evil.

    They will cheer him on, no matter what he does, short of first-degree murder-- and they would make excuses for that. Even former Reagan speech writer Peggy Noonan has gushed over President Obama and even crusty Bill O'Reilly has been impressed by Obama's demeanor.

    There is no sign that President Obama has impressed the Russians, the Iranians or the North Koreans, except by his rookie mistakes-- and that is a dangerous way to impress dangerous people.

    What did his televised overture to the Iranians accomplish, except to reassure them that he was not going to do a damn thing to stop them from getting a nuclear bomb? It is a mistake that can go ringing down the corridors of history.

    Future generations who live in the shadow of that nuclear threat may wonder what we were thinking about, putting our lives-- and theirs-- in the hands of a rookie because we liked his style and symbolism?

    In the name of "change," Barack Obama is following policies so old that this generation has never heard of them-- certainly not in most of our educational institutions, where history has been replaced by "social studies" or other politically correct courses.

    Seeking deals with our adversaries, behind the backs of our allies? France did that at Munich back in 1938. They threw Czechoslovakia to the wolves and, less than two years later, Hitler gobbled up France anyway.

    This year, President Obama's attempt to make a backdoor deal with the Russians, behind the backs of the NATO countries, was not only rejected but made public by the Russians-- a sign of contempt and a warning to our allies not to put too much trust in the United States.

    Barack Obama is following a long practice among those on the left of being hard on our allies and soft on our enemies. One of our few allies in the Middle East, the Shah of Iran, was a whipping boy for many in the American media, who vented their indignation at his regime-- which now, in retrospect, seems almost benign compared to the hate-filled fanatics and international terrorism sponsors who now rule that country.

    However much Barack Obama has proclaimed his support for Israel, his first phone call as President of the United States was to Hamas, to whom he has given hundreds of millions of dollars, which can buy a lot of rockets to fire into Israel.

    Our oldest and staunchest ally, Britain, has been downgraded by President Obama's visibly less impressive reception of British Prime Minister Gordon Brown, compared to the way that previous Presidents over the past two generations have received British Prime Ministers. President Obama's sending the bust of Winston Churchill in the White House back to the British embassy at about the same time was either a rookie mistake or another snub.

    We can lose some very big games with this rookie.

 "What Were You Thinking?"