« Previous — Next »
Obama’s Economic Plans Are Protectionist, Naive And Dangerous To Our Children’s Economic Future
21 February 2008Flush with manifest destiny Obama has been fleshing out his rhetoric and it’s surprising old. More suited to the 1970’s his flavor of protectionism reads like an old union flyer passed around while Detroit workers sledgehammer a Toyota for the TV cameras.
This version of change has been roundly discredited and offers no hope.
What profit GM had this past quarter was from it’s overseas sales and largely the same with Ford. HP gets a huge 63% of it’s profit from non-USA sales.
HP competes very well on the international marketplace and beats all comers, and we Americans are better off and stronger and wealthier as a nation because they can and do.
Raise the protectionist barriers to free trade and you’ll hurt HP’s ability to compete. Why would we do this? Why would we punish a successful company and prop up a failed business model?
This is real simple, make it tough for US companies to do business with overseas markets and they will become non-USA companies real quick.
Obama has been distributing flyers in Ohio showing a locked factory gate with a large closed sign on it. In speech, “We’re here because there are workers in Youngstown, Ohio, who’ve watched job after job after job disappear because of bad trade deals like NAFTA, who’ve worked in factories- who’ve worked in factories for 20 years, and then one day they come in and literally see the equipment unbolted from the floor and sent to China.”
Toyota, Honda and Nissan can make competitive cars in the US, so it’s not a China thing, it is a Youngstown Ohio thing. The NA in NAFTA stands for North American not Far Eastern Free Trade Agreement. Setting up barriers won’t help, it’ll just delay the pain of fixing the problem longer.
Free trade is a good thing, setting up protectionist barriers to free trade will just impoverish us as a nation. Why should I pay more for an item when it can be made cheaper elsewhere? If you take money out of my pocket to enable a Youngstown worker to stay at his factory job of 20 years you are diminishing my wealth. It is a transfer of wealth from my pocket to his. This only diminishes us both.
The market is telling him that his labor/mental capital could be used better elsewhere. The days of putting in 30 or 40 years at the factory are LONG LONG GONE. Somebody else in the world (like Tennessee or Alabama or Georgia) wants to do his job cheaper and be very happy doing it. It is a losers bet to try and hold on to those halcyon days of the 40s, and 50s where Jr could expect to retire from Dad’s plant.
To artificially maintain those jobs requires the government introduce anti-market rules and centralized planning and that does not work we know that. No one has a right to the same job all his life. That is plain DUMB.
Unemployment is really low in the US, so it is not a lack of jobs in the US problem, its a Youngstown, Ohio problem.
This graph from the federal government sums it up nicely. “Over the long run, there is little connection between increased imports of goods and services and the strength of the labor market.” Meaning it’s not a labor problem it is a skill set problem.
Global trade is not going away. We will have to become quicker on our feet and learn new skills.
Obama’s solution will not work and in the long run hurt us and our children.
Why will he hurt our children? Because protectionism is a dead end economic theory, it has never worked and it’ll just weaken our ability to compete and when we drop the protectionist barriers it’ll be all the harder to makeup for lost time. Look at the former Soviet Union, their malise is proving real hard to shake off.
We must compete and we are and have been.
And we do it best when the Politicos get out of the way.
Obama is running as a uniter, meanwhile telling American workers their jobs went to Mexico and China and only because their government gave their jobs way through unfair trade agreements and it is just not fair.
Contrast that with McCain who makes the point, while some jobs were lost overall the American economy gained jobs and that it would be better to help displaced workers retrain for better more stable jobs rather than try to prop up a business model that has failed.
Now, who is being realistic?
No comments yet