Drearily predictable, really. It starts with “Buy America” provisions in the economic recovery act, operating under the assumption that economic decisions can be made unilaterally in a global economy.
Canadian municipal leaders threatened to retaliate against the “Buy America” movement in the United States on Saturday, warning trade restrictions will hurt both countries’ economies.
The Federation of Canadian Municipalities endorsed a controversial proposal to support communities that refuse to buy products from countries that put trade restrictions on products and services from Canada.
The measure is a response to a provision in the U.S. economic stimulus package passed by Congress in February that says public works projects should use iron, steel and other goods made in the United States.
It’s only a little thing, right now. A municipal protest along our longest border, with our largest trading partner, that trade supporting millions of jobs on both sides of the border. But it took three years for the Smoot-Hawley Tariff Act of 1930 to drive down US exports by 66%, while the temptation to keep churning at the engines of the economy will only grow if the recession endures until the election cycle begins. And you can’t help but feel that, having brought the rest of the world to the brink of economic chaos, we really do owe our partners better than this.
Protectionism didn’t help GM survive lower cost, higher quality competition. It probably accelerated the company’s downfall by isolating unions and management from the effects of their decisions.
We used to know that. We used to be unafraid of the rough and tumble. But in their haste to obligate a fresh trillion dollars to the economic recovery, Congress let each and every enthusiast of obscure and disproven theories have a turn at the tiller.
Like Talleyrand’s Bourbons, our political class has learned nothing and forgotten nothing.
I hope they can come to their senses before more damage is done.
Hope ain’t a strategy.
In three years a lot of damage can be done…
You know, labeling oneself a conservative and picking and choosing at a political buffet ain’t gonna stop the tide. Political parties win elections. Folks gotta quit ignoring the Republican brand and get back into it. If not- hello 1930′s..and we know where that led. Just like my other lifelong institution I’ve been associated with- the US Navy, the Republican Party has had it’s ups and its downs. I never quit is my point.
The fix is simple but the “sheeple-cats” continue to do their own thing and resist reality. Perhaps it is better to be ignorant. Blissful anyways.
b2
    “Folks gotta quit ignoring the Republican brand and get back into it. If not- hello 1930’s..and we know where that led.”
B-2 – I’m confused. Wasn’t it the Republicans under President Hoover that got us into the Great Depression?
And wasn’t it two Republicans – Smoot and Hawley – who drafted the infamous and disastrous trade and tariff bill that plunged us much deeper into the depression?
In no way can a small Canadian/US kerfuffle be compared to the extensive high tariffs on foreign products as Smoot-Hawley. It is an extreme exaggeration that distorts.
Nevertheless our international trade is hardly free trade. Currency manipulation, foreign government subsidies, and certain other trade restrictions amount to an uneven trade playing field for the US.
While trade wars, tariffs, and protectionism are to be avoided, what is wrong with “buy American?” I sometimes wonder about those who are most strongly for our national defense are ironically the weakest when it comes to defending American jobs.
And as an aside, we should have already nationalized our banks, just as Sweden did successfully a few years ago. Our economy and the taxpayer would be much better off. And for anyone thinking that statement makes me a “Socialist”, I am happy to counter that I am not one, thank you.
Smoot and Hawley were Republicans, and John C. Calhoun was a Democrat, so it is as fair to say Republicans are wishy-washy on trade as to say Democrats are wishy-washy on the rights of southern farmers to own human beings.
More the point.
Republicans should stand by their modern tradition of defending trade unfettered by government interference, which has nothing to do with ‘buy American’. When spending one’s own money to purchase goods and services, one should be free to pay more to purchase from a favored supplier, perhaps a US one, perhaps not, if one wishes. One should not have this foisted upon him by tariffs which restrict freedom and prosperity.
Protecting the jobs of union button pushers and product liability litigators has nothing to do with defense of the nation. Buying a Boeing might, but Obama’s spending package has no benefits for the defense of the nation, precious few for the nation in general, and certainly not enough to warrant the alienation of the neighbors upon whom our recovery will largely depend.
“I hope they can come to their senses before more damage is done.”
THAT seems to be one of the most often repeated and unfortunate legacies of the Obama-Democrat administration. There is money and graft in the wind in massive amounts. Lex, you hinted at it and I think it is true: only the next election cycle has a chance to stop the madness… assuming there is enough left to save.
Come to their senses?
This conglomerate of thieving political class?
Elections do have consequences, and we have not even begun paying for this one yet.
They are deliberately attempting to change the US into the EU. Nothing else matters to them, beyond their own special status and insulation from the damage they are inflicting on the rest of the population.
High taxes, inflation and the nanny-state are definitely in our future.
Come to their senses? That assumes that their intent is not to do damage to the U.S. They have come to their senses; they want to bring down the Republic and replace it with socialism.
They have the rest of this year I believe, to get the country Socialized (Banks-check, Insurance-check, Public Schools-check, University-check, Large Industry (i.e.-Big Auto)-check, Health Care-working, Environment-working). They want to get all the ‘nasty’ bills passed this year while the Halo is still fresh and bright on the Chosen One. Then they can go back home and campaign for more hope and change next year, putting all of this behind them where it the short attention span of the American Public they can try and paint is with the “Bush Did It” brush. Meanwhile, the damage is done because when was the last time ANY government program was reversed (didn’t they just now finally kill the A-12 program, what was that 12 years in the making).
The thing that worries me that this actual Blog Post was about is the historical parallel between when the Smoot-Hawley Bill was debated and then passed and what has happened now with the famous Stimulus Bill (without all that ‘debate’ stuff, don’t need that anyway right!!!). If you read the link it points out how the Credit Markets and the Federal Reserve were more in trouble and the “Buy American” tariffs only served to add momentum to what was coming. We might not be trading with many other countries but how do you motivate a country to buy your bonds (thereby relieving at home credit pressures and monetary woes) if you won’t buy goods and services from them. Tit-for-Tat. Same thing happened in 1929 and the result was disastrous.
Hope and Change, yeah. I keep saying that but it rings hollow.
BT: Jimmy T sends.
One of the events which has gone practically unnoticed by the mainstream news media is the takeover by Obama’s minions at the White House of the next census-taking. This is truly ominous. If some Republicans in Congress don’t at least protest this, we are going to have radically skewed results of the census — skewed from reality, that is. And even if we vote our consciences as we have always done, potentially millions of illegal votes will be cast.
With ACORN’s already proven illegal voting activities, hauling into the voting booths the undead, the newly dead and the illegal, no non-Democratic candidate will have a chance of winning. The aim of the Democrats is to establish a permanent majority of the Democratic party, making the Republican party irrelevant and ineffectual. It’s not a two party system, if one party can never win. It’s something like Venezuela instead.
Marianne
If BHO is allowed to keep the Census under his control, the 2012 elections will be significantly affected due to redistricting.
Just a guess, but it will probably be in favor of the Democrat/Socialist/Fascist Party. (not really sure what to call that Party nowadays)
You know, for a country that is supposedly going socialist, the Obama administration is doing a poor job of it.
The opposition might be more effective if it got its terms of reference right. There may very well be a difference of opinion about what the role of the government is in trying to shape the economy-but the US is hardly, by any objective definition of the word, turning socialist.
Fascist then? Direct ownership not necessary, only the influence to directly affect business.
Also, that graph is highly misleading. First, the asset number is out of date. Secondly, it only refers to direct nationalization, not, say, TARP related control due to forcing conditions on solvent banks. Also not counted is the massive debt load due to such things and the level of control that amounts to.
The president’s comments have cast a black cloud over my industry for the past few months, something that has cost numerous friends their jobs. I would like to see him go to Wichita and apologize.
I’ll let Conor Clarke reply:
But I wasn’t interested in the government spending as a percentage of GDP! The socialism charge that I’ve been hearing for the past week hasn’t had much to do with the size of the federal government. The charge has been that the government now thinks it can run private industry — GM, AIG, whatever — better than, well, private industry. The point of the chart was that, if Rahm Emmanuel and Peter Orszag and Barack Obama really felt deeply in their hearts that they could run Caterpillar or Kraft Foods better than the incumbent management, you wouldn’t see 99.71% of the nation’s business assets remain in the hands of the nation’s businesses.
I don’t have a whole lot to say about this, except (1) I agree that it’s “not pretty” and (2) If you’re going to equate an increase in the deficit or in federal spending as a percentage of GDP with socialism, then every modern American president (with the partial exception of Bill Clinton!) is a socialist. In which case I’m not sure Barack Obama has a lot to worry about.
For something that resembles socialism more closely, you might check out Sarah Palin’s state of Alaska.
You’ll be shocked, I’m sure to hear this but: I agree with the man (though his Bill Clinton comment stems from raw ignorance of everything else in the world at the time, especially technological).
All of them are statists of the highest quality. I am merely suggesting that the current CINC is the worst of the lot. Again, read my post. Fascist would be the most appropriate term, possibly Paternal Autocrat (with a shade of oligarchy mixed in).
Clearly, you’ve never had the experience of seeing an industry die through excessive regulation and hurtful politics, specifically controls for the greater good. What has been done has far reaching affects that will likely, as history shows, have a massive negative affect on the economy particularly due to uncertainty. You now have a government which refuses to recognize contracts. This is a clear breach of the law of the land, yet I hear no outcry, no distain at the extension of power. Something, I believe shows what really lurks in the hearts of Americans.
Skippy, I haven’t looked through your site yet, but have you posted anything relating this current trend in the US with a comparison to the “Lost Decade” of Japan. Would be a good insight.
I think there are some big differences between Japan and the United States and conclusions from Japan do not necessarily transfer over to the US.
1) Japan already has a fairly large program of government spending to stimulate the economy thanks to its cost sharing under the security treaty.
2) At the same time the bubble burst, Japan was de-nationalizing its transportation industry. (Rail and subsidies to JAL).
3) Investment within Japan is different than in the United States. Because of its structure of Japanese retirement and its national health care system-the level of personal investment is less than ours. ( Even since coming to the US, the S.O. has been VERY reluctant to put her money anywhere besides a bank CD.). Their savings rate is higher than ours-but is more in banks because of cultural differences about the risks in investing. You also don’t see the whole 401 K things as much as we do here.
Just my observations-based on a small sample size of Japanese that I know very well. The S.O. does reminisce about the “good old days during the bubble “though. ( A round of Louis Vuitton for everyone!) And she is most unhappy that her apartment in Tokyo has taken a 25% hit in its sales / rental value.
“Clearly, you’ve never had the experience of seeing an industry die through excessive regulation and hurtful politics, specifically controls for the greater good. ”
Who is John Galt anyway?